Rehabilitation Mortgage Insurance

To help families repair or improve, purchase and improve, or refinance and improve existing residential structures more than one year old.


Agency - Department of Housing and Urban Development

The Department of Housing and Urban Development's mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. HUD fulfills this mission through high ethical standards, management and accountability, and by forming partnerships with community organizations.

Office - Persons are encouraged to contact the Homeownership Center serving their State (see http://www.hud.gov/offices/hsg/sfh/hoc/hsghocs.cfm), or the nearest local HUD Office.

See Catalog Appendix IV for a list of offices.


Program Accomplishments

The Department insured 3,383 loans in FY 07.

Uses and Use Restrictions

HUD insures lenders against loss on loans.

These loans may be used to rehabilitate an existing 1 to 4 unit dwelling in one of four ways: (1) Purchase a structure and the land on which the structure is located and rehabilitate it; (2) purchase a structure on another site, move it onto a new foundation on the mortgaged property and rehabilitate it; (3) refinance the existing indebtedness and rehabilitate such a structure; or (4) rehabilitate such a structure.

Maximum insurable mortgage loans for an occupant mortgagor are the same as prescribed for Section 203(b) - Program 14.117.

Rehabilitation cost must be at least $5,000.



Eligibility Requirements

Applicant Eligibility

Individual and families.

Beneficiary Eligibility

Individuals and families.

Credentials/Documentation

Documentation regarding the characteristics of the property and the qualifications of the borrower are assembled by the lender and submitted with the application. This program is excluded from coverage under OMB Circular No. A-87.

Aplication and Award Process

Preapplication Coordination

This program is excluded from coverage under E.O.12372.

Application Procedures

Application is submitted through a HUD-approved lending institution. This program is excluded from coverage under OMB Circular Nos. A-102 and A-110.

Award Procedures

See Application Procedure.

Deadlines

None.

Authorization

National Housing Act, as amended, Section 203(k), Public Law 95-557, 12 U.S.C. 1709, 1715(k).

Range of Approval/Disapproval Time

Varies.

Appeals

The lender or HUD will state the reason 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 loan amount is the same as Section 203(b) - Program 14.117. Value is determined by either (a) the value of the property before rehabilitation plus the cost of rehabilitation, or (b) 110 percent of the appraised value of the property after rehabilitation, whichever is less. The loan may be subordinated to an existing first mortgage, or there may be insured advances during the rehabilitation period if the loan is a first lien. The lender may charge the greater of $350 or an additional 1-1/2 percent supplemental loan origination fee for the portion of the loan which is allocated to rehabilitation when there are insured advances. Also, the lender may charge the mortgagor fees in the nature of discounts.

Length and Time Phasing of Assistance

The mortgage term may extend for 30 years.

Post Assistance Requirements

Reports

Defaults in meeting the mortgage terms must be reported.

All approved mortgagees at any time upon request by FHA 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 FHA regulations and standards.

Records

Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the FHA regulations.

Financial Information

Account Identification

86-4077-0-3-371.

Obigations

(Loans insured) FY 07 $441,844,837; FY 08 est $583,421,000; and FY 09 est reported under program 14.117.

Range and Average of Financial Assistance

Maximum insurable mortgage loans for an occupant mortgagor are the same as prescribed for Section 203(b) - Program 14.117. Rehabilitation cost must be at least $5,000.

Regulations, Guidelines, and Literature

HUD Residential Rehabilitation Program, no charge Fact Sheet: Rehabilitation Mortgage Insurance, no charge. 24 CFR 203.50.

Information Contacts

Regional or Local Office

Persons are encouraged to contact the Homeownership Center serving their State (see http://www.hud.gov/offices/hsg/sfh/hoc/hsghocs.cfm), or the nearest local HUD Office. See Catalog Appendix IV for a list of offices.

Headquarters Office

None.

Criteria for Selecting Proposals

Not applicable.



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