Section 245 Graduated Payment Mortgage Program (14.159)

Program

14.159 Section 245 Graduated Payment Mortgage Program

Federal Agency

Agency: Department of Housing and Urban Development
Office: Office of Housing-Federal Housing Commissioner

Authorization

National Housing Act.

Program Number

14.159

Last Known Status

Active

Objectives

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.

Types of Assistance

GUARANTEED/INSURED LOANS

Uses and Use Restrictions

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. Maximum insurable mortgage is the property's sales price (or appraised value, if less)exclusive of any borrower paid closing cost multiplied by a percent that is determined by the sales price or value if less and the average closing cost for the State or 97 percent of the appraised value and closing costs of the property, minus all of the deferred interest which would accrue during the graduated term. This determines the maximum mortgage that FHA will insure, provided the mortgagor makes a cash investment of at least 3 percent into the property which may include closing costs.

Eligibility Requirements

Applicant Eligibility

All persons intending to occupy the property are eligible to apply for Section 245(a).

Beneficiary Eligibility

Individuals/families.

Credentials/Documentation

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 OMB Circular No. A-87.

Application and Award Process

Preapplication Coordination

Preapplication coordination is required. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.

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. Applications are submitted for review and approval or disapproval to the local HUD Field Office through a HUD-approved lending institution.

Award Procedure

See Application Procedure.

Deadlines

Not Applicable.

Range of Approval/Disapproval Time

Varies.

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

Statutory formulas are not applicable to this program.
Matching requirements are not applicable to this program.
MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

The term of the mortgage is limited to 30 years. Method of awarding/releasing assistance: quarterly.

Post Assistance Requirements

Reports

Audits

Not Applicable.

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

Not Applicable.

Financial Information

Account Identification

86-4587-0-3-371.

Obligations

(Sale, Exchange, or Donation of Property and Goods) FY 08 $0; FY 09 est $0; FY 10 est $0 - Reported under 14.117 for FY 08, FY 09, FY 10.

Range and Average of Financial Assistance

No Data Available.

Regulations, Guidelines and Literature

Not Applicable.

Related Programs

Not Applicable.

Information Contacts

Regional or Local Office

None. 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

Wanda L. Sampedro, 451 7th Street, SW , Washington, District of Columbia 20410 Email: wanda.sampedro@hud.gov Phone: (202) 402-2324

Web Site Address

http://www.hud.gov/offices/hsg/sfh/ins/singlefamily.cfm.

Examples of Funded Projects

Not Applicable.

Criteria for Selecting Proposals

Not Applicable.