FEDERAL AGENCY:

HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

AUTHORIZATION:

National Housing Act, as amended, Section 245(a).

To provide a rapid principal reduction and shorter mortgage term by increasing payments over a 10-year period, thereby expanding housing opportunities to the homebuying public.

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 purchase of proposed, under construction, or existing single family housing, as well as to refinance indebtedness on existing housing, provided certain conditions are met. The maximum insurable mortgage loan for an occupant mortgagor is the same as prescribed for Section 203(b) - Program 14.117.

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 mortgagee and submitted with the application. This program is excluded from coverage under OMB Circular No. A-87.

Pre-application Coordination:   None. 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 mortgagee lending institution. This program is excluded from coverage under OMB Circular Nos. A-102 and 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 Section 203(b) - Program 14.117. The down payment is the difference between the maximum loan amount and the purchase price of the home. In addition to the down payment, the purchaser must pay for all items of prepaid expense. As of July 1, 1991, risk-based mortgage insurance premiums will be collected including: 1) an up-front premium which may be financed and 2) a periodic premium which is paid monthly. If property is a condominium unit; the mortgage insurance premium is one-half percent paid monthly. The loan origination charge by the mortgagee varies, but may not exceed one percent of the total mortgage (minus the mortgage insurance premium, if financed). Mortgagors may be charged appraisal and inspection fees in accordance with fee schedules established by HUD.

Length and Time Phasing of Assistance:   The Mortgage terms vary according to the plan chosen.

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 instructions and the HUD regulations.

FINANCIAL INFORMATION:

Account Identification:   86-4587-0-3-371.

Obligations:   (Mortgages insured) Reported under program 14.117.

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.

The Department insured 1 loan in Fiscal Year 2001 and expects no new loans in Fiscal Year 2002.

REGULATIONS, GUIDELINES, AND LITERATURE:

Departmental memorandums dated June 4 and July 15, 1982.

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/245a--df.cfm

EXAMPLES OF FUNDED PROJECTS:

Not applicable.

CRITERIA FOR SELECTING PROPOSALS:

Not applicable.