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14.108 Rehabilitation Mortgage Insurance
HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
National Housing Act, as amended, Section 203(k), Public Law 95-557, 12 U.S.C. 1709, 1715(k).
To help families repair or improve, purchase and improve, or refinance and improve existing residential structures more than one year old.
TYPES OF ASSISTANCE:
USES AND USE RESTRICTIONS:
HUD insures lenders against loss on loans. These loans may be used to rehabilitate an existing 1 to 4 unit dwelling in one of four ways: (1) Purchase a structure and the land on which the structure is located and rehabilitate it; (2) purchase a structure on another site, move it onto a new foundation on the mortgaged property and rehabilitate it; (3) refinance the existing indebtedness and rehabilitate such a structure; or (4) rehabilitate such a structure. Maximum insurable mortgage loans for an occupant mortgagor are the same as prescribed for Section 203(b) - Program 14.117. Rehabilitation cost must be at least $5,000.
Applicant Eligibility: Individual purchasers are eligible to apply.
Pre-application Coordination: None. This program is excluded from coverage under E.O. 12372.
Formula and Matching Requirements: The maximum loan amount is the same as Section 203(b) - Program 14.117. Value is determined by either (a) the value of the property before rehabilitation plus the cost of rehabilitation, or (b) 110 percent of the appraised value of the property after rehabilitation, whichever is less. The loan may be subordinated to an existing first mortgage, or there may be insured advances during the rehabilitation period if the loan is a first lien. The lender may charge the greater of $350 or an additional 1-1/2 percent supplemental loan origination fee for the portion of the loan which is allocated to rehabilitation when there are insured advances. Also, the lender may charge the mortgagor fees in the nature of discounts.
POST ASSISTANCE REQUIREMENTS:
Reports: Defaults in meeting the mortgage terms must be reported. All approved mortgagees at any time upon request by FHA must furnish a copy of their latest financial statement.
Account Identification: 86-0148-0-1-604; 86-4077-0-3-371.
The Department expects to endorse an estimated 9000 loans in 2002.
REGULATIONS, GUIDELINES, AND LITERATURE:
HUD Residential Rehabilitation Program, no charge; Fact Sheet: Rehabilitation Mortgage Insurance, no charge. 24 CFR 203.50.
Regional or Local Office: None. For additional information, individuals are encouraged to contact the FHA Resource Center by phone at 1-800-CALLFHA (1-800-225-5342), by email at firstname.lastname@example.org or visit the FHA Resource Center site at http://portal.hud.gov/hudportal/HUD?src=/FHAFAQ
EXAMPLES OF FUNDED PROJECTS:
CRITERIA FOR SELECTING PROPOSALS: