Mortgage Insurance for Construction or Substantial Rehabilitation of Condominium Projects

 

To enable sponsors to develop condominium projects in which individual units will be sold to home buyers.

Deleted 01/15/2013 (Archived.) 14.112 Agency: Department of Housing and Urban Development
Office: Office of Housing-Federal Housing Commissioner GUARANTEED/INSURED LOANS Not Applicable. National Housing Act, as amended; Housing Act of 1964, as amended, Section 234(d), Public Law 88-560; Section 234(c), Public Law 90-448, 82 Stat. 476, 507, 1969; Section 234(c), Public Law 91-152, 83 Stat. 379, 384, 12 U.S.C. 1715(y). Private profit-motivated developers, public bodies, and other sponsors who meet FHA requirements for mortgagors. All families are eligible to purchase condominium units. Mortgages for individual units may be insured under Section 234(c). See program 14.133. 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. Preapplication coordination is required. Environmental impact information is not 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. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. The sponsor submits a formal mortgage insurance application through a HUD approved mortgagee to the local HUD Multifamily Hub or Program Center. The local HUD 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, HUD issues the lender a commitment to insure the project mortgage. Not Applicable. Processing time will depend upon the degree of preparation by the sponsor and the workload of field office. If an application for mortgage insurance is refused, HUD will state the reasons for the refusal. If reapplication is desired, the applicant may modify the application and reapply. The term of a commitment to insure may be extended under certain circumstances when more time is required. Not Applicable. HUD insures lenders against loss on mortgage loans. These loans may be used to finance the construction or rehabilitation of multifamily housing structures by a sponsor intending to sell individual units as condominiums, which also would be eligible for the benefits of mortgage insurance under Section 234(c). The program has statutory per unit 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. No reports are required. This program is excluded from coverage under OMB Circular No. A-133. 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 FHA regulations and standards. Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the FHA regulations. This program has no statutory formula.
This program has no matching requirements.
This program does not have MOE requirements. The maximum mortgage term is 40 years, or not in excess of three-quarters of the remaining economic life, whichever is less, if the project remains a rental. See the following for information on how assistance is awarded/released: Mortgage Insurance provided over 40 year term. See Regional Agency Offices. All projects are processed in local HUD Multifamily Hubs or Program Centers. Persons are encouraged to communicate with the nearest local HUD Office. HUD Multifamily Hubs and Program Centers are listed at: http://www.hud.gov/offices/hsg/mfh/mfbroch/hubs_pcs.cfm. Joyce Allen, 451 Seventh Street SW, washington, District of Columbia 20410 Email: joyce.allen@hud.gov Phone: (202) 708-1142. http://www.hud.gov/offices/hsg/hsgmulti.cfm. 86-4077-0-3-371. (Loan Guarantees/Grants) FY 09 $0; FY 10 $0; FY 11 $0 - Reported under 14.135 for FY 09,
FY 10, and FY 11. No Data Available. "HUD Mortgage Insurance Handbook No. 4580.1 For Condominium Housing Insured under Section 234 (d) of the National Housing Act, 24 CFR234; "HUD Mortgage Insurance Handbook No. 4265.1, Home Mortgage Insurance- Condominium Units, Section 234(c)", available on http://www.hudclips.org. Not Applicable.