Section 245 Graduated Payment Mortgage Program

 

To facilitate early home ownership for households that expect their incomes to rise. Program allows homeowners to make smaller monthly payments initially and to increase their size gradually over time.

Deleted 04/02/2020 (Archived.) 14.159 Agency: Department of Housing and Urban Development
Office: Office of Housing-Federal Housing Commissioner GUARANTEED/INSURED LOANS Not Applicable. National Housing Act. All persons intending to occupy the property are eligible to apply for Section 245(a). Individuals/families. Documentation regarding the characteristics of the property and the qualifications of the applicant are assembled by the mortgagee and submitted with the application. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles. Preapplication coordination is required. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372. This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Applications are submitted for review and approval or disapproval to the local HUD Field Office through a HUD-approved lending institution. See Application Procedure. Not Applicable. Varies. The lender will state the reasons for refusing an application. The applicant may reapply to other lenders. Not Applicable. Not Applicable. HUD insures lenders against loss on mortgage loans. These mortgage loans may be used by owner-occupant mortgagors to finance the purchase of proposed, under construction, or existing single family housing, and condominiums. The mortgage calculation requires consideration of three limits, the least of which determines the maximum mortgage: 1) the statutory limit for the area; 2) the maximum mortgage as if the loan were to be insured under Section 203(b) using outstanding instructions, and, 3) a separate calculation specific to Sec. 245(a). This final calculation will almost always result in a lower amount than would be available under Section 203(b). The Section 245(a) calculation is to make certain that the loan amount with all deferred interest added does not exceed 97 percent of the appraised value including closing costs at the time the loan was made. Not Applicable. Not Applicable. Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the HUD regulations. Statutory formulas are not applicable to this program.
Matching requirements are not applicable to this program.
MOE requirements are not applicable to this program. The term of the mortgage is limited to 30 years. Method of awarding/releasing assistance: quarterly. None. Persons are encouraged to contact the Homeownership Center serving their State, or the nearest local HUD Office. Visit www.hud.gov for a list of offices. Wanda L. Sampedro 451 7th Street, SW, Washington, District of Columbia 20410 Email: answers@hud.gov Phone: (800) 225-5342 http://portal.hud.gov/hudportal/HUD?src=/hudprograms/gpm 86-4587-0-3-371. (Sale, Exchange, or Donation of Property and Goods) FY 14 Not Separately Identifiable(Exp: Reported under 14.117); FY 15 Not Separately Identifiable(Exp: Reported under 14.117); and FY 16 Not Separately Identifiable(Exp: Reported under 14.117) - Reported under 14.117 for Fiscal Years 2009 through present. No Data Available. Not Applicable. Not Applicable.