Mortgage Insurance-Purchase of Sales-Type Cooperative Housing Units
To make available, good quality, new housing for purchase by individual members of a housing cooperative.
General information about this opportunity
Last Known Status
Deleted 08/20/2009 (Archived.)
HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Type(s) of Assistance Offered
Because of the small number of loans in any given year, the data is included in the number of loans insured under Section 203(b), 14.117.
National Housing Act, as amended, Section 213; Housing Act of 1950; Public Law 81-475; 12 U.S.C. 1715(e).
Who is eligible to apply/benefit from this assistance?
Eligible mortgagors include members of nonprofit cooperative ownership housing corporations or trusts which sponsor such housing.
Individuals/families and nonprofit organizations.
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.
What is the process for applying and being award this assistance?
None. This program is excluded from coverage under E.O. 12372.
Application is submitted for review and approval to the local HUD field office through a HUD-approved mortgagee. This program is excluded from coverage under OMB Circular Nos. A-102 and A-110.
See Application Procedure.
Approval/Disapproval Decision Time
HUD will state the reasons for refusing an application. The applicant may reapply subject to concurrence of the lender.
The term of a commitment to insure may be extended when more time is desired.
How are proposals selected?
How may assistance be used?
HUD insures lenders against loss on mortgages. Insured mortgages may be used to finance purchase by a cooperative member under the sponsorship of a nonprofit cooperative with five or more units. The unit mortgage limit is the same as Section 203(b).
What are the requirements after being awarded this opportunity?
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.
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.
Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the HUD regulations.
Other Assistance Considerations
Formula and Matching Requirements
The maximum amount of the loan is the same as under Section 203(b) - program 14.117, except that the mortgage shall not exceed an amount equal to the portion of the unpaid balance of the blanket mortgage covering the cooperative which is attributable to the dwelling unit. The downpayment is the difference between the maximum loan amount and the purchase price of the home, but in no case less than $200. The mortgage insurance premium is one-half percent of the mortgage amount.
Length and Time Phasing of Assistance
The mortgage term is 30 years, except 35 years if the mortgagor is unacceptable under a 30-year term.
Who do I contact about this opportunity?
Regional or Local Office
Persons are encouraged to contact the Homeownership Center serving their State, the nearest local HUD Office. See Catalog Address Appendix IV for a list of Offices.
(Mortgages insured) Reported under program 14.135.
Range and Average of Financial Assistance
See Uses and Use Restrictions.
Regulations, Guidelines and Literature
HUD-17-F(3) "Let's Consider Cooperatives," no charge; 24 CFR 213, subpart C; HUD Handbook No. 4550.6, "Sales Type Cooperatives."
Examples of Funded Projects