Mortgage Insurance-Purchase of Units in Condominiums (14.133)

 

Program

14.133 Mortgage Insurance-Purchase of Units in Condominiums

 

Federal Agency

HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

Authorization

National Housing Act, as amended, Section 234(c), Public Law 87-70, 75 Stat. 149, 1968, Public Law 90-448, 82 Stat. 476, 507, 1969, Public Law 91-152, 83 Stat. 379, 384.

 

Program Number

14.133

 

Last Known Status

Active

 

Objectives

To enable families to purchase units in condominium projects.

 

Types of Assistance

Guaranteed/Insured Loans.

 

Uses and Use Restrictions

HUD insures lenders against loss on mortgage loans. These loans may be used to finance the acquisition of individual units in proposed or existing condominium projects containing four or more units. The maximum insurable loan for an occupant mortgagor is the same as Section 203(b) - Program 14.117. With respect to a unit in any project which was converted from rental housing, no insurance may be provided under this section unless: (1) The conversion occurred more than 1 year prior to the application for insurance; (2) the mortgagor or co-mortgagor was a tenant of that rental housing; or (3) the conversion of the property is sponsored by a bona fide tenant's organization representing a majority of the households in the project.

 

Eligibility Requirements

Applicant Eligibility

All families are eligible to apply.

Beneficiary Eligibility

Individuals/families.

Credentials/Documentation

Documentation regarding the function and characteristics of the project and 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

Preapplication Coordination

An environmental assessment is required for a proposed project under this program. Owner-occupancy requirements apply as do requirements for transfer of rights to the homeowner association. Eighty percent of HUD-insured mortgages in the project must be made to owner-occupants. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372.

Application Procedure

Application is submitted for review and approval to the local HUD Field Office through a HUD-approved lending institution. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure

See Application Procedure.

Deadlines

None.

 

Range of Approval/Disapproval Time

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 203(b) - Program 14.117. The downpayment is equal to the difference between the maximum loan amount and the purchase price of the unit. The loan origination charge by the mortgagee varies, but may not exceed one percent of the total mortgage amount. This program has maintenance of effort (MOE) requirements, see funding agency for further details.

Length and Time Phasing of Assistance

The mortgage term may extend for 30 years, except 35 years if the mortgagor is unacceptable under a 30-year term.

 

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.

 

Program Accomplishments

Insured 79,757 loans in fiscal year 2002. The Department projects it will insure approximately 82,000 in fiscal year 2003.

 

Financial Information

Account Identification

86-4077-0-3-371.

Obligations

(Mortgages insured) FY 02 $12,981,976,679; FY 03 est $13,700,000,000; and FY 04 est $13,900,000,000.

Range and Average of Financial Assistance

The maximum amount of the loan is the same as under 203(b) - Program 14.117.

 

Regulations, Guidelines and Literature

"Guide To Single Family Home Mortgage Insurance," no charge; Questions about Condominiums, HUD 365-H(7), no charge; 24 CFR 234.

 

Related Programs

14.112, Mortgage Insurance for Construction or Substantial Rehabilitation of Condominium Projects; 14.159, Section 245 Graduated Payment Mortgage Program; 14.172, Mortgage Insurance_Growing Equity Mortgages.

 

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/234c--df.cfm

 

Examples of Funded Projects

Not applicable.

 

Criteria for Selecting Proposals

Not applicable.