Mortgages Insurance for Single Room Occupancy (SRO) Projects (14.184)

Program

14.184 Mortgages Insurance for Single Room Occupancy (SRO) Projects

Federal Agency

Agency: Department of Housing and Urban Development
Office: Office Of Housing-federal Housing Commissioner

Authorization

National Housing Act, Section 221(d), 12 U.S.C. 1751(d); Section 223(g), 12 U.S.C. 1715 (g).

Program Number

14.184

Last Known Status

Active

Objectives

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

GUARANTEED/INSURED LOANS

Uses and Use Restrictions

The SRO Program insures lenders against loss on mortgages used to finance construction or substantial rehabilitation of projects consisting of five or more units comprised primarily of one room residential units. Projects must be designed primarily for residential use. Any commercial activity must be compatible with the use of the project and primarily for the benefit of the residents. Commercial space is limited to 10 percent of the total gross floor area (20 percent in substantial rehabilitation projects), and 15 percent of gross rental income in a project. Contractors for new construction and substantial rehabilitation projects must comply with prevailing wage requirements under the Davis-Bacon Act.

Eligibility Requirements

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 investors are not eligible.

Beneficiary Eligibility

Residents are subject to normal tenant selection procedures. There are no income limits for admission.

Credentials/Documentation

Along with the Application for Mortgage Insurance, the applicant must provide a market profile demonstrating a clear need for the proposed SRO, experience profiles as to SRO operation, a certification from the local government assuring support of the project, and a relocation plan if needed. This program is excluded from coverage under OMB Circular No. A-87.

Application and Award Process

Preapplication Coordination

Preapplication coordination is required. An environmental impact 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.

Application Procedure

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 an application for a SAMA or feasibility application to the local HUD office for review. Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved mortgagee to the local HUD Multifamily Hub and Program Center for processing. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure

The project is reviewed to determine its feasibility. If the project meets program requirements, the HUD Multifamily Hub or Program Center issues a commitment to insure the mortgage.

Deadlines

Not Applicable.

Range of Approval/Disapproval Time

Processing time depends upon the degree of preparation by the sponsor and the workload of the HUD Multifamily Hub or Program Center.

Appeals

If an application for mortgage insurance is denied, HUD will state the reasons for the denial. If reapplication is desired, the applicant may reapply subject to concurrence of the lender.

Renewals

The term of a commitment to insure may be extended when more time is required to close the loan.

Assistance Considerations

Formula and Matching Requirements

Statutory Formula: Title 24 cfr, Part 221.

This program has no matching requirements.

This program does not have MOE requirements.

Length and Time Phasing of Assistance

The maximum mortgage term is 40 years, or not in excess of three-fourths of the remaining economic life, whichever is less. See the following for information on how assistance is awarded/released: Over the life of the mortgage.

Post Assistance Requirements

Reports

Audits

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 to determine their 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 HUD regulations.

Program Accomplishments

Not Applicable.

Financial Information

Account Identification

86-4077-0-3-371.

Obligations

(Guaranteed/Insured Loans) FY 08 $0; FY 09 est $0; FY 10 est $0 - Reported Under 14.133 for FY 08,
FY 09, and FY 10.

Range and Average of Financial Assistance

No Data Available.

Regulations, Guidelines and Literature

24 CFR 221.565; HUD Handbook 4560.3, Mortgage Insurance for Single Room Occupancy (SRO) Projects available on www.hudclips.org.

Related Programs

Not Applicable.

Information Contacts

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.

Headquarters Office

Joyce Allen 451 Seventh Street SW, washington, District of Columbia 20410 Email: joyce.allen@hud.gov Phone: 2027081142

Web Site Address

http://www.hud.gov/offices/hsg/hsgmulti.cfm.

Examples of Funded Projects

Not Applicable.

Criteria for Selecting Proposals

Not Applicable.