To
provide good quality rental housing in urban renewal areas, code
enforcement areas, and other areas designated for overall revitalization.
TYPES
OF ASSISTANCE:
Guaranteed/Insured Loans. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
HUD,
through the Federal Housing Administration (FHA) insures lenders
against loss on mortgage defaults. Insured mortgages may be used
to finance the construction or substantial rehabilitation of detached,
semi-detached, row, walk-up, or elevator type rental housing or
to finance the purchase of properties which have been rehabilitated
by a local public agency. Properties must consist of two or more
units and must be located in an urban renewal area, urban redevelopment
project, or code enforcement program area, urban area receiving
rehabilitation assistance as a result of natural disaster, or area
where concentrated housing, physical development and public service
activities are being carried out in a coordinated manner. The program
has statutory mortgage limits which vary according to the size of
the unit, the type of structure, and the location of the project.
There are also loan-to-replacement cost and debt service limitations.
Contractors for new construction and substantial rehabilitation
projects must comply with prevailing wage standards under the Davis-Bacon
Act.
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: Eligible mortgagors include private
profit motivated entities, public bodies, and others who meet HUD
requirements for mortgagors.
Beneficiary
Eligibility: All families are eligible to
occupy a dwelling in a structure whose mortgage is insured under
the program, subject to normal tenant selection.
Credentials/Documentation:
Documentation regarding the characteristics of the property and
the qualifications of the mortgagor must be submitted with the
application. This program is excluded from coverage under OMB
Circular No. A-87.
Pre-application
Coordination: For Traditional Application Process
(TAP) of a mortgage insurance application, the sponsor has an preapplication
conference with the local HUD Multifamily Hub or Program Center
to determine the preliminary feasibility of the project before a
Site Appraisal and Market Analysis Application (SAMA) application
(for new construction projects) or a feasibility letter (for substantial
rehabilitation projects) is submitted. For Multifamily Accelerated
Processing (MAP) for new construction or substantial rehabilitation
loans, the sponsor works with a MAP-approved lender who submits
certain required exhibits for the preapplication stage. This program
is excluded from coverage under OMB Circular No. A-102. An environmental
assessment is required for this program. This program is eligible
for coverage under E.O. 12372, "Intergovernmental Review of Federal
programs." An applicant should consult the office or official designated
as the single point of contact in his or her State for more information
on the process the State requires to be followed in applying for
assistance, if the State has selected the program for review.
Application
Procedure: For TAP, the application for a
Firm Commitment is submitted by the sponsor through a HUD-approved
mortgagee, and the application is processed by the Multifamily
Hub or Program Center. For MAP, the application for a Firm Commitment,
including a full underwriting package, is submitted by the MAP
lender to the Multifamily Hub or Program Center for review. This
program is excluded from coverage under OMB Circular No. A-110.
Award
Procedure: The local Multifamily Hub or Program
Center reviews the application to determine whether the proposal
is feasible. Considerations include market need, zoning, architectural
merits, capabilities of sponsors, availability of community resources,
etc. If the project meets program requirements, the Multifamily
Hub or Program Center issues the lender a commitment to insure
the project mortgage.
Deadlines:
Deadlines are established on a case by case basis by the Multifamily
Hub or Program Center.
Range
of Approval/Disapproval Time: Processing time,
depends upon the degree of preparation by the sponsor and whether
or not Multifamily Accelerated Processing (MAP) or Traditional
Application Processing (TAP) is used.
Appeals:
If an application for mortgage insurance is denied, HUD will state
the reasons for the denial. If reapplication is desired, the applicant
may modify the application and reapply.
Renewals:
The term of a commitment to insure may be extended under certain
circumstances when more time is required to close the loan.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: For most mortgagors,
the maximum amount of the loan may not exceed 90 percent of the
estimated replacement cost. The mortgage insurance premium is based
on the mortgage amount. The HUD application processing fee is $3
per $1,000 of the mortgage amount. The HUD inspection fee may not
exceed $5 per $1,000 of the mortgage amount.
Length
and Time Phasing of Assistance: The maximum
mortgage term is 40 years, or not in excess of three-fourths of
the remaining economic life, whichever is less.
POST
ASSISTANCE REQUIREMENTS:
Reports:
Any change of the mortgagor during the period of mortgage insurance
must be approved by HUD. Defaults in meeting the mortgage terms
must be reported. All mortgagors are required to submit annual financial
statements to HUD. All approved mortgagees must furnish copies of
their latest financial statements at any time upon request by HUD.
Audits:
The Department of Housing and Urban Development reserves the right
to audit the accounts of either the mortgagee or mortgagor in
order to determine their 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:
Reported under program 14.135.
Range
and Average of Financial Assistance:
For most mortgagors, the maximum amount of the loan may not exceed
90 percent of the estimated replacement cost.
In fiscal year 2001, HUD insured two projects with 214 units, totaling
$18 million. The Department expects to insure similar number of
loans in fiscal year 2002.
REGULATIONS,
GUIDELINES, AND LITERATURE:
24 CFR 220.1 et seq.; Fact Sheet: Urban Renewal Housing (Mortgage
Insurance), no charge; Rental Housing in Urban Renewal Areas for
Project Mortgage Insurance, HUD Handbook 4555.1, no charge.
INFORMATION
CONTACTS:
Regional
or Local Office: Persons are encouraged to communicate
with the nearest local HUD Multifamily Field Office listed at http://www.hud.gov/offices/hsg/mfh/mfbroch/hubs_pcs.cfm
or contact the nearest HUD Field Office listed in the Catalog Address
Appendix IV.
Headquarters
Office: Office of Multifamily Development,
Department of Housing and Urban Development, 451 7th Street, S.W.,
Washington, DC 20410. Telephone: (202) 708-1142. Use the same
number for FTS.
Web
Site Address: http://www.hud.gov/fha/mfh/fhamfbus.html
