FEDERAL AGENCY:

HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

AUTHORIZATION:

National Housing Act, as amended, Section 203(b), Public Law 73-479, 12 U.S.C. 1709, 1715(b).

OBJECTIVES:

To help people undertake home ownership.

TYPES OF ASSISTANCE:

Guaranteed/Insured Loans. Place Cursor Here for Definition

USES AND USE RESTRICTIONS:

HUD insures lenders against loss on mortgage loans. These loans may be used to finance the purchase of proposed, under construction, or existing one-to four-family housing, as well as to refinance indebtedness on existing housing. Maximum insurable loans are as follows: one-family $144.336; two family $184,752; three-family $223,296; and four-family $277,512; except that the Secretary may increase the preceding maximum dollar amounts on an area-by-area basis to the extent the Secretary deems necessary, after taking into consideration the extent to which moderate and middle income persons have limited housing opportunities in the area due to high prevailing housing sales prices, but in no case may such limits, as so increased, exceed the lesser of (A) 87 percent of the Federal National Mortgage Association's Conforming Loan Limit, or (B) in the case of a one-family residence, 95 percent of the median one-family house price in the area, as determined by the Secretary; in the case of a two-family residence, 107 percent of such median price; in the case of a three-family residence, 130 percent of such median price; or in the case of a four-family residence, 150 percent of such median price. Designated areas of limited housing opportunities and maximum mortgage amounts may be obtained from local HUD Offices.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   All persons intending to occupy the property are eligible to apply.

Beneficiary Eligibility:   Individuals/families.

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

Pre-application Coordination:   This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372.

Application Procedure:   Application is submitted for review and approval or disapproval to the local HUD Field Office through a HUD approved lending institution. In addition, certain lending institutions have been approved to review applications and issue an approval or rejection, without additional HUD intervention. This program is referred to as Direct Endorsement. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure:   Application is submitted for review and approval or disapproval to the local HUD Field Office through a HUD approved lending institution. In addition, certain lending institutions have been approved to review applications and issue an approval or rejection, without additional HUD intervention. This program is referred to as Direct Endorsement. This program is excluded from coverage under OMB Circular No. A-110.

Deadlines:   None.

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:   For most families, the maximum amount of the loan is the property's sales price (or appraised value, if less) exclusive of any borrower paid closing costs multiplied by a percent that is determined by the sales price or value if less and the average closing cost for the State. This determines the maximum mortgage that FHA will ensure, provided the mortgagor makes a cash investment of at least 3 percent into the property which may include closing costs. The downpayment is the difference between the maximum loan amount and the purchase price of the home. In addition to the downpayment, the purchaser must pay for all items of prepaid expense. Risk-based mortgage insurance premiums are collected including: 1) an up-front premium which may be financed and 2) a periodic premium which is paid monthly. The loan origination charge by the mortgage varies, but may not exceed one percent of the total mortgage (minus the mortgage insurance premium, if being financed). Mortgagors may be charged appraisal and inspection fees in accordance with fee schedules established by HUD. This program has maintenance of effort (MOE) requirements, see funding agency for further details.

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 mortgages 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 mortgage to determine its compliance and conformance with FHA regulations and standards.

Records:   Mortgages 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:   86-4587-0-3-371.

Obligations:   (Mortgages insured) FY 01 $107,448,635,000; FY 02 est $133,557,024,000; and FY 03 est $121,673,546,000.

Range and Average of Financial Assistance:  
Maximum insurable loans are as follows: In areas where 125 percent of the median house price is less than 65 percent of the National Conforming Loan Limit ($417,000), FHA “floor” limits are set at the 65 percent limit as follows: one-family $271,050; two-family $347,000; three-family $419,425; and four-family $521,250. Any area where the limits exceed the floor is known as a “high cost” area. In areas where 115 percent of the median house price exceeds 150 percent of the National Conforming Loan Limit for a one unit property, the mortgage limits are set at the 150 percent amount (ceiling)as follows: one-unit $625,500; two-unit $800,775; three-unit $967,950; and four-unit $1,202,925.

In fiscal year 2001, FHA insured 1,066,883 loans. The Department expects to insure 1,100,000 loans in 2002.

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:   None. For additional information, individuals are encouraged to contact the FHA Resource Center by phone at 1-800-CALLFHA (1-800-225-5342), by email at answers@hud.gov or visit the FHA Resource Center site at http://portal.hud.gov/hudportal/HUD?src=/FHAFAQ.

Headquarters Office:  Wanda L. Sampedro 451 7th Street, SW, Washington, District of Columbia 20410 Email: answers@hud.gov Phone: (800) 225-5342

Web Site Address:  
https://portal.hud.gov/hudportal/HUD

EXAMPLES OF FUNDED PROJECTS:

Not applicable.

CRITERIA FOR SELECTING PROPOSALS:

Not applicable.