Content provided by the Catalog of Federal Domestic Assistance
14.184 Mortgages Insurance for Single Room Occupancy (SRO) Projects
HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
National Housing Act, Section 221(d), 12 U.S.C. 1751(d); Section 223(g), 12 U.S.C. 1715 (g).
The Single Room Occupancy (SRO) Program provides mortgage insurance for multifamily properties consisting of single-room units. There are no Federal rent subsidies involved with this SRO Program. It is aimed at those tenants who have a source of income but are priced out of the rental apartment market. SRO projects will generally require assistance from local governing bodies or charitable organizations in order to reduce the rents to affordable levels.
TYPES OF ASSISTANCE:
USES AND USE RESTRICTIONS:
HUD, through the Federal Housing Administration (FHA) insures lenders against loss on mortgages used to finance construction or substantial rehabilitation projects consisting of five or more units comprised primarily of one room residential units, with no more than 10 percent of the total gross floor space dedicated to commercial use (20 percent for substantial rehabilitation projects). Contractors for new construction and substantial rehabilitation projects must comply with prevailing wage requirements under the Davis- Bacon Act.
Applicant Eligibility: Eligible applicants may be nonprofit entities; builder/sellers teamed with a nonprofit purchaser, a limited distribution entity, profit-motivated entities or public entities. Cooperative lenders or inventors are not eligible.
Pre-application Coordination: The sponsor has an initial conference with the local HUD Multifamily Hub and Program Center to determine the preliminary feasibility of the project before a Site Appraisal and Market Analysis (SAMA) Application (for new construction projects or feasibility application (for substantial rehabilitation projects) is submitted. 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.
Formula and Matching Requirements: The maximum amount of a Section 221 (d)(4) profit motivated loan may not exceed 90 percent of the estimated replacement cost. The maximum amount of a Section 221(d)(3) non-profit loan is 100 percent of the estimated replacement cost. The mortgage insurance premium is one-half percent of the mortgage amount. The HUD fees for application processing and commitment are $3 per $1,000 of the mortgage amount. The HUD-inspection fee may not exceed $5 per $1,000 of the mortgage amount.
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 an annual financial statement to HUD. All approved mortgagees at any time upon request by HUD must furnish copies of their latest financial statements.
Account Identification: 86-4077-0-3-371.
The department did not insure any loans under this program for FY2001 and does not anticipate any loans to be insured for FY2002.
REGULATIONS, GUIDELINES, AND LITERATURE:
24 CFR 221.565; HUD Handbook 4560.3.
Regional or Local Office: See Regional Agency Offices. Persons are encouraged to communicate with the nearest local HUD Multifamily Hub and Program Center listed in http://www.hud.gov/offices/hsg/mfh/mfbroch/hubs_pcs.cfm or the nearestHUD Office listed in the Catalog Address Appendix IV.
EXAMPLES OF FUNDED PROJECTS:
CRITERIA FOR SELECTING PROPOSALS: