Guaranteed/Insured Loans. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
HUD
insures lenders against loss on mortgage loans. These loans may
be used to finance the purchase of proposed, under construction,
or existing one-to four-family housing, as well as to refinance
indebtedness on existing housing. Maximum insurable loans are as
follows: one-family $144.336; two family $184,752; three-family
$223,296; and four-family $277,512; except that the Secretary may
increase the preceding maximum dollar amounts on an area-by-area
basis to the extent the Secretary deems necessary, after taking
into consideration the extent to which moderate and middle income
persons have limited housing opportunities in the area due to high
prevailing housing sales prices, but in no case may such limits,
as so increased, exceed the lesser of (A) 87 percent of the Federal
National Mortgage Association's Conforming Loan Limit, or (B) in
the case of a one-family residence, 95 percent of the median one-family
house price in the area, as determined by the Secretary; in the
case of a two-family residence, 107 percent of such median price;
in the case of a three-family residence, 130 percent of such median
price; or in the case of a four-family residence, 150 percent of
such median price. Designated areas of limited housing opportunities
and maximum mortgage amounts may be obtained from local HUD Offices.
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: All persons intending to occupy
the property are eligible to apply.
Beneficiary
Eligibility: Individuals/families.
Credentials/Documentation:
Documentation regarding the characteristics of the property and
the qualifications of the mortgagor are assembled by the mortgage
and submitted with the application. This program is excluded from
coverage under OMB Circular No. A-87.
Pre-application
Coordination: This program is excluded from
coverage under OMB Circular No. A-102. This program is excluded
from coverage under E.O. 12372.
Application
Procedure: Application is submitted for review
and approval or disapproval to the local HUD Field Office through
a HUD approved lending institution. In addition, certain lending
institutions have been approved to review applications and issue
an approval or rejection, without additional HUD intervention.
This program is referred to as Direct Endorsement. This program
is excluded from coverage under OMB Circular No. A-110.
Award
Procedure: Application is submitted for review
and approval or disapproval to the local HUD Field Office through
a HUD approved lending institution. In addition, certain lending
institutions have been approved to review applications and issue
an approval or rejection, without additional HUD intervention.
This program is referred to as Direct Endorsement. This program
is excluded from coverage under OMB Circular No. A-110.
Deadlines:
None.
Range
of Approval/Disapproval Time: Varies.
Appeals:
The lender or HUD will state the reason for refusing an application.
The applicant may reapply subject to concurrence of the lender.
Renewals:
Not applicable.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: For most families,
the maximum amount of the loan is the property's sales price (or
appraised value, if less) exclusive of any borrower paid closing
costs multiplied by a percent that is determined by the sales price
or value if less and the average closing cost for the State. This
determines the maximum mortgage that FHA will ensure, provided the
mortgagor makes a cash investment of at least 3 percent into the
property which may include closing costs. The downpayment is the
difference between the maximum loan amount and the purchase price
of the home. In addition to the downpayment, the purchaser must
pay for all items of prepaid expense. Risk-based mortgage insurance
premiums are collected including: 1) an up-front premium which may
be financed and 2) a periodic premium which is paid monthly. The
loan origination charge by the mortgage varies, but may not exceed
one percent of the total mortgage (minus the mortgage insurance
premium, if being financed). Mortgagors may be charged appraisal
and inspection fees in accordance with fee schedules established
by HUD. This program has maintenance of effort (MOE) requirements,
see funding agency for further details.
Length
and Time Phasing of Assistance: The mortgage
term may extend for 30 years.
POST
ASSISTANCE REQUIREMENTS:
Reports:
Defaults in meeting the mortgage terms must be reported. All approved
mortgages at any time upon request by FHA must furnish a copy of
their latest financial statement.
Audits:
The Department of Housing and Urban Development reserves the right
to audit the account of the mortgage to determine its compliance
and conformance with FHA regulations and standards.
Records:
Mortgages are required to service and maintain records in accordance
with acceptable mortgage practices of prudent lending institutions
and the FHA regulations.
FINANCIAL
INFORMATION:
Account
Identification: 86-4587-0-3-371.
Obligations:
(Mortgages insured) FY 01 $107,448,635,000; FY 02 est $133,557,024,000;
and FY 03 est $121,673,546,000.
Range
and Average of Financial Assistance:
Maximum insurable loans are as follows: one-family $144,336; two-family
$184,752; three- family $223,296; and four-family $277,512; except
that the Secretary may increase the preceding maximum dollar amounts
on an area-by-area basis to the extent the Secretary deems necessary,
after taking into consideration the extent to which moderate and
middle income persons have limited housing opportunities in the
area due to high prevailing housing sales prices, but in no case
may such limits, as so increased, exceed the lesser of (A) 87
percent of the Federal National Mortgage Association's Conforming
Loan Limit, or (B) in the case of a one-family residence, 95 percent
of the median one-family house price in the area, as determined
by the Secretary; in the case of a two-family residence, 107 percent
of such median price; in the case of a three-family residence,
130 percent of such median price; or in the case of a four-family
residence, 150 percent of such median price.
In fiscal year 2001, FHA insured 1,066,883 loans. The Department
expects to insure 1,100,000 loans in 2002.
REGULATIONS,
GUIDELINES, AND LITERATURE:
HUD Residential Rehabilitation Program, no charge; Fact Sheet: Rehabilitation
Mortgage Insurance, no charge. 24 CFR 203.50.
INFORMATION
CONTACTS:
Regional
or Local Office: Persons are encouraged to contact
the Homeownership Center serving their State, or the nearest local
HUD Office. See Catalog Address Appendix IV for a list of offices.
Headquarters
Office: None.
Web
Site Address: http://www.hud.gov/progdesc/203b--df.cfm
