Mortgage Insurance_Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate
To provide good quality rental or cooperative housing for moderate income families, the elderly, and handicapped. Single Room Occupancy (SRO) may also be insured under this section (see program 14.184).
General information about this opportunity
Last Known Status
Agency: Department of Housing and Urban Development
Office: Office of Housing-Federal Housing Commissioner
Type(s) of Assistance Offered
National Housing Act, as amended, Section 221, Public Law 86-372, 12 U.S.C. 1715(1).
Who is eligible to apply/benefit from this assistance?
Public, profit-motivated sponsors, limited distribution, nonprofit cooperative, builder-seller, investor-sponsor, and general mortgagors.
All families are eligible to occupy dwellings in a structure whose mortgage is insured under the program, subject to normal tenant selection. There are no income limits. Projects may be designed specifically for the elderly and handicapped.
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?
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.
This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. For Traditional Application Process (TAP) following HUD's issuance of a SAMA letter (new construction) or Feasibility Letter (substantial rehabilitation) the sponsor submits a formal mortgage insurance application through a HUD-approved mortgagee to the local HUD Multifamily Hub and Program Center for processing. For Multifamily Accelerated Processing (MAP), the lender submits the required exhibits, including a full underwriting package, which are then reviewed by the Multifamily Hub and Program Center before a Firm Commitment is issued.
The local HUD Multifamily Hub and Program Center reviews the application to determine whether the proposal is feasible. Considerations include market need, zoning, architectural merits, capabilities of sponsors, availability of community resources, etc. If the project meets program requirements, the HUD Multifamily Hub and Program Center issues the lender a commitment to insure the project mortgage.
Approval/Disapproval Decision Time
Processing time depends upon the degree of preparation by the sponsor and whether or not TAP or MAP is used.
If an application for mortgage insurance is refused, HUD will state the reasons for the refusal. If reapplication is desired, the applicant may modify the application and reapply.
The term of a commitment to insure may be extended under certain circumstances when more time is required.
How are proposals selected?
How may assistance be used?
Section 221(d)(3) and Section 221(d)(4) insures lenders against loss on mortgage defaults for market rate rental projects. Insured mortgages may be used to finance construction or rehabilitation of detached, semidetached, row, walkup, or elevator-type rental or cooperative housing containing 5 or more units. The program has statutory mortgage limits which vary according to the size of the unit, the type of structure, and the location of the project. There are also loan-to- replacement cost and debt service limitations. Contractors for new construction and substantial rehabilitation projects must comply with prevailing wage requirements under the Davis-Bacon Act. Section 221(d)(3) mortgages require appropriated credit subsidy, which is limited.
What are the requirements after being awarded this opportunity?
No reports are required.
In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor in order to determine their 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
Statutory Formula: Title 24 cfr, Part 207.
This program has no matching requirements.
MOE requirements are not applicable to this program.
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.
Who do I contact about this opportunity?
Regional or Local Office
See Regional Agency Offices. Persons are encouraged to contact the Multifamily Hub or Program Center with jurisdiction for the proposed project. HUD Multifamily Hubs or Program Centers are listed at http://www.hud.gov/offices/hsg/mfh/mfbroch/hubs_pcs.cfm or in the Catalog Address Appendix IV.
Carmelita James 451 Seventh Street SW, washington, District of Columbia 20410 Email: email@example.com
Phone: (202) 402-2579
(Guaranteed/Insured Loans) FY 11 $2,395,376,100; FY 12 est $2,535,000,000; and FY 13 est $2,525,080,000
Range and Average of Financial Assistance
No Data Available.
Regulations, Guidelines and Literature
24 CFR 221 et seq.; Fact Sheet: Rental Housing for Moderate Income Families, no charge; HUD Handbook 4560.2, Mortgage Insurance for Moderate-Income Housing Projects, Section 221 (d)(4), no charge; HUD Handbook 4560.1, Section 221(d)(3) Market Interest Rate for Project Mortgage Insurance, no charge; HUD Handbook 4560.3, Mortgage Insurance for Single Room Occupancy Projects; no charge; HUD Handbook 4550.3; Basic Cooperative Housing Insurance Handbook, no charge. Handbooks are on HUDCLIPS at http://www.hudclips.org. The Multifamily Accelerated Processing (MAP) Guide is on the web. Refer to HUD's MAP page at http://www.hud.gov/offices/hsg/mfh/map/maphome.cfm.
Examples of Funded Projects