FEDERAL
AGENCY:
HOUSING,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
AUTHORIZATION:
National
Housing Act, as amended; Housing and Urban-Rural Recovery Act of
1983, Section 251, Public Law 98-181, 12 U.S.C. 1715z-16.
To
provide mortgage insurance for an adjustable rate mortgage which
offers lenders more assurance of long term profitability than a
fixed rate mortgage, while offering consumer protection features.
TYPES
OF ASSISTANCE:
Guaranteed/Insured Loans.
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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. 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.
APPLICATION
AND AWARD PROCESS:
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 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). 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 all items of prepaid expense. As of July 1, 1991, risk-based
mortgage insurance premiums will be collected including 1) an up-front
mortgage insurance premium which may be financed; and 2) a periodic
premium which is paid monthly. If the property is a condominium,
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. The interest
rate adjustments of the mortgage may not increase more than one
percent per year or five percent over the term of the mortgage.
There is no negative amortization. The mortgagor must receive a
disclosure statement explaining the adjustable rate features of
their mortgage.
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
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: 86-4587-0-3-371.
Obligations:
(Mortgages insured) Reported under program 14.117.
Range
and Average of Financial Assistance:
See Uses
and Use Restrictions.
PROGRAM
ACCOMPLISHMENTS:
HUD insured 34,554 loans in fiscal year 2001. HUD estimates insuring
37,000 in 2002.
REGULATIONS,
GUIDELINES, AND LITERATURE:
24 CFR 203.49; 234.79.
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/251--df.cfm
EXAMPLES
OF FUNDED PROJECTS:
Not applicable.
CRITERIA
FOR SELECTING PROPOSALS:
Not applicable.
