FEDERAL AGENCY:

HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

AUTHORIZATION:

National Housing Act, as amended, Section 234(c), Public Law 87-70, 75 Stat. 149, 1968, Public Law 90-448, 82 Stat. 476, 507, 1969, Public Law 91-152, 83 Stat. 379, 384.

To enable families to purchase units in condominium projects.

TYPES OF ASSISTANCE:

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 acquisition of individual units in proposed or existing condominium projects containing four or more units. The maximum insurable loan for an occupant mortgagor is the same as Section 203(b) - Program 14.117. With respect to a unit in any project which was converted from rental housing, no insurance may be provided under this section unless: (1) The conversion occurred more than 1 year prior to the application for insurance; (2) the mortgagor or co-mortgagor was a tenant of that rental housing; or (3) the conversion of the property is sponsored by a bona fide tenant's organization representing a majority of the households in the project.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   All families are eligible to apply.

Beneficiary Eligibility:   Individuals/families.

Credentials/Documentation:   Documentation regarding the function and characteristics of the project and the property and the qualifications of the mortgagor are assembled by the mortgagee and submitted with the application. This program is excluded from coverage under OMB Circular No. A-87.

Pre-application Coordination:   An environmental assessment is required for a proposed project under this program. Owner-occupancy requirements apply as do requirements for transfer of rights to the homeowner association. Eighty percent of HUD-insured mortgages in the project must be made to owner-occupants. 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 to the local HUD Field Office through a HUD-approved lending institution. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure:   See Application Procedure.

Deadlines:   None.

Range of Approval/Disapproval Time:   Varies.

Appeals:   HUD will state the reasons for refusing an application. The applicant may reapply subject to concurrence of the lender.

Renewals:   Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   The maximum amount of the loan is the same as under 203(b) - Program 14.117. The downpayment is equal to the difference between the maximum loan amount and the purchase price of the unit. The loan origination charge by the mortgagee varies, but may not exceed one percent of the total mortgage amount. 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, except 35 years if the mortgagor is unacceptable under a 30-year term.

POST ASSISTANCE REQUIREMENTS:

Reports:   Defaults in meeting the mortgage terms must be reported. All approved mortgagees at any time upon request by HUD 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 mortgagee to determine its compliance and conformance with HUD regulations and standards.

Records:   Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the HUD regulations.

FINANCIAL INFORMATION:

Account Identification:   86-4077-0-3-371.

Obligations:   (Mortgages insured) FY 01 $9,152,961,049; FY 02 est $8,482,000,000; and FY 03 est $8,482,000,000.

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.

Insured 81,336 loans in fiscal year 2001. The Department projects it will insure approximately 82,000 in fiscal year 2002.

REGULATIONS, GUIDELINES, AND LITERATURE:

"Guide To Single Family Home Mortgage Insurance," no charge; Questions about Condominiums, HUD 365-H(7), no charge; 24 CFR 234.

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/234c--df.cfm

EXAMPLES OF FUNDED PROJECTS:

Not applicable.

CRITERIA FOR SELECTING PROPOSALS:

Not applicable.