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Mortgage Insurance Programs

Mortgage Insurance for Rental Housing: Section 207
Mortgage Insurance for Rental Housing for the Elderly: Section 231
Construction or Substantial Rehabilitation of Condominium Projects: Section 234(d)
FHA Manufactured Home Parks: Section 207(m)
Cooperative Housing Units: Section 213
Rental Housing for Urban Renewal and Concentrated Development Areas: Section 220
Rental & Cooperative Housing: Section 221(d)(3) and (4)
Single Room Occupancy Projects: Section 221(d)(3) and (4)
Two-Year Operating Loss Loans: Section 223(d)
Purchase or Refinancing of Existing Multifamily Housing Projects: Section 207/223(f)
Nursing Homes, Board and Care and Assisted-Living Facilities: Section 232 and 232/223(f)
Supplemental Loan Insurance for Multifamily Rental Housing: Section 241(a)
Qualified Participating Entities Risk-Sharing Program: Section 542(b)
Housing Finance Agency Risk-Sharing Program: Section 542(c)

Mortgage Insurance for Rental Housing: Section 207

Summary
Section 207 Program insures mortgage loans to finance the construction or rehabilitation of a broad range of rental housing. Section 207 mortgage insurance, although still authorized, is no longer used for new construction and substantial rehabilitation. It is however, the primary insurance vehicle for the Section 223(f) refinancing program. Multifamily new construction and substantial rehabilitation projects are currently insured under the Section 221(d)(3) and Section 221(d)(4) programs.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders..

Eligible Activities
Section 207 mortgage insurance may be used to finance the construction or substantial rehabilitation of detached, semidetached, row, walk-up, or elevator type structures with 5 or more units. A project is eligible for mortgage insurance if:

• the sponsor can demonstrate that there is a definite market demand,
• that the project is economically self-sufficient,
• and that financing is secure.

The program has statutory per unit 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-value and debt service limitations. The mortgage is limited to 90 percent of HUD appraised value.

Eligible Applicants
Eligible mortgagors include investors, builders, developers, and others who meet HUD requirements for mortgagors. All families are eligible to occupy dwellings in a structure whose mortgage is insured under this program, subject to normal tenant selections.

Application
The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to determine preliminary feasibility of the project. The sponsor must then submit a site appraisal and market analysis application (SAMA) (for new construction projects), or feasibility application (for substantial rehabilitation projects). Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. Considerations include market need, zoning, architectural merits, capabilities of the borrower, availability of community resources, etc. If the proposed project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For specific questions about multifamily housing programs, contact the Region X office at (206) 220-5228, or visit the program website at: http://www.hud.gov/offices/hsg/mfh/progdesc/homepark207.cfm.

For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990.

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Mortgage Insurance for Rental Housing for the Elderly: Section 231

Summary
The Section 231 insures mortgage loans to facilitate the construction and substantial rehabilitation of multifamily rental housing for elderly persons (62 or older) and/or persons with disabilities.

Section 231 insures lenders against loss on mortgages. Section 231 was designed to increase the supply of rental housing specifically for the use and occupancy of elderly persons, and/or persons with disabilities. However, few projects have been insured under Section 231 in recent years; non-profits have opted to use Section 221(d)(3), while profit motivated developers have used Section 221(d)(4).

Type of Assistance
FHA mortgage insurance for HUD-approved lenders..

Eligible Activities
Insured mortgages may be used to finance the construction and substantial rehabilitation of detached, semidetached, walk-up, or elevator type rental housing designed specifically for elderly or handicapped individuals consisting of eight or more dwelling units. For nonprofit sponsors, the maximum loan amount is 100 percent of the estimated replacement cost of the building (or 100 percent of project value for rehabilitation projects). For all other sponsors, the maximum loan is 90 percent of the replacement cost (or 90 percent of project value for rehabilitation projects). Contractors for new construction or substantial rehabilitation projects are required to comply with prevailing wage standards under the Davis-Bacon Act.

Eligible Applicants
Mortgagors include private profit-motivated developers, and non-profit sponsors. All elderly or persons with disabilities are eligible to occupy apartments in a project whose mortgage is insured under the program.

Application

1. The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to determine the feasibility of the project.
2. The sponsor must then submit a site appraisal and market analysis (SAMA) application (new construction projects), or a feasibility application (substantial rehabilitation projects).
3. Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. Considerations include market need, zoning, architectural merits, capabilities of the borrower, and availability of community resources.
4. If the project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For specific questions about multifamily housing programs, contact the Region X office at (206) 220-5228 or visit the program website at: http://www.hud.gov/offices/hsg/mfh/progdesc/renthsgeld231.cfm.

For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990.

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Construction or Substantial Rehabilitation of Condominium Projects: Section 234(d)

Summary
Section 234(d) insures blanket mortgages for the construction or substantial rehabilitation of multifamily projects to be sold upon completion as individual condominium units.
Section 234(d) insures lenders against the loss on mortgage defaults. The program enables sponsors to develop condominium projects in which individual units will be sold to home buyers.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Insured mortgages may be used to finance construction and substantial rehabilitation of multifamily housing structures where the individual units will be sold as condominiums under Section 234(c). The program has statutory per unit 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 pre-sale limitations. Contractors for new construction or substantial rehabilitation projects must comply with prevailing wage requirements under the Davis-Bacon Act.

Eligible Applicants
Private profit-motivated developers and other sponsors who meet FHA requirements for mortgagors. Families or individuals who are eligible to purchase condominium units. Mortgages for individual units may be insured under Section 234(c).

Application

1. The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to provide general application guidance and to determine the feasibility of the project.
2. The sponsor must then submit a site appraisal and market analysis (SAMA) application (for new construction projects) or feasibility application (for substantial rehabilitation projects).
3. Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. Considerations include, market need, zoning, architectural merits, capabilities of the borrower, and availability of community resources.
4. If the project meets program requirements, the local HUD Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For specific questions about multifamily housing programs, contact the Region X office at (206) 220-5228 or visit the program website at: http://www.hud.gov/offices/hsg/mfh/progdesc/subrehabcondo234d.cfm

For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990.

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FHA Manufactured Home Parks: Section 207(m)

Summary
Section 207 Program insures mortgage loans to facilitate the construction or substantial rehabilitation of multifamily manufactured home parks.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
The program insures lenders against loss on mortgage defaults. Insured mortgages may be used to finance the construction or rehabilitation of manufactured home parks. Home parks must consist of 5 or more spaces. Contractors for new construction and substantial rehabilitation projects must comply with prevailing wage requirements under the Davis-Bacon Act.

Eligible Applicants
Eligible mortgagors include investors, builders, developers and others who meet
HUD requirements for mortgagors. Families, individuals, or elderly persons owning manufactured homes or desiring to lease spaces in a manufactured park are eligible.

Application

1. The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to determine the preliminary feasibility of the project.
2. The sponsor must then submit a site appraisal and market analysis (SAMA) (for new construction projects) or a feasibility application (for substantial rehabilitation projects).
3. Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. Considerations include market need, zoning, capabilities of the borrower, and availability of community resources.
4. If the project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at: http://www.hud.gov/offices/hsg/mfh/progdesc/homepark207.cfm.

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Cooperative Housing Units: Section 213

Summary
Section 213 insures mortgage loans to facilitate the construction, substantial rehabilitation, and purchase of cooperative housing projects. Each member shares in the ownership of the whole project with the exclusive right to occupy a specific unit and to participate in project operations through the purchase of stock.

Section 213 insures lenders against loss on mortgage defaults. Section 213 enables nonprofit cooperative housing corporations or trusts to develop or sponsor the development of housing projects to be operated as cooperatives. Section 213 also allows investors to provide good quality multifamily housing to be sold to non-profit corporations or trusts upon completion of construction or rehabilitation. Alternatively, cooperatives may use Section 221(d)(3) to insure construction or substantial rehabilitation of cooperative projects.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Funds may be used to finance construction, acquisition of existing or rehabilitated detached, semidetached, row, walk-up, or elevator type housing projects consisting of five or more units. The program has statutory per unit mortgage limits which may 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 limitations. Contractors for new construction and substantial rehabilitation housing projects must comply with prevailing wage requirements under the Davis-Bacon Act.

Eligible Applicants
Non-profit cooperative ownership housing corporations or trusts are eligible to use
Section 213. They may either sponsor projects directly, sell individual units to
cooperative members, or purchase projects from investor-sponsors. HUD imposes no restrictions on the income or characteristics of individual shareholders/residents in an insured cooperative.

Application

1. The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to provide general application guidance and to determine the feasibility of the project.
2. The sponsor must then submit a site appraisal and market analysis (SAMA) application (for new construction projects) or feasibility application (for substantial rehabilitation projects), arranges for an environmental assessment, and check with the State to determine its requirements.
3. Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. Considerations include, market need, zoning, architectural merits, capabilities of the borrower, and availability of community resources.
4. If the project meets program requirements, the local HUD Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/coop213.cfm.

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Rental Housing for Urban Renewal and Concentrated Development Areas: Section 220

Summary
Section 220 insures loans for multifamily housing projects in urban renewal areas, code enforcement areas, and other areas where local governments have undertaken designated revitalization activities.

Section 220 insures lenders against loss on mortgage defaults. Section 220 provides good quality rental housing in urban areas that have been targeted for overall revitalization. Section 220 insures mortgages on new or rehabilitated housing located in designated urban renewal areas, and in areas with concentrated programs of code enforcement, and neighborhood development.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Insured mortgages may be used to finance construction or rehabilitation of detached, semi-detached, row, walk-up, or elevator type rental housing or to finance the purchase of properties which have been rehabilitated by a local public agency. Properties must consist of two or more units and must be located in an urban renewal area, in an urban development project, code enforcement program area, urban area receiving rehabilitation assistance as a result of natural disaster, or area where concentrated housing, physical development, or public service activities are being carried out in a coordinated manner.

The program has statutory mortgage limits, which may 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. The maximum amount of the mortgage loan may not exceed 90 percent of the estimated replacement cost for new construction. For substantial rehabilitation projects, the maximum mortgage amount is 90 percent of the estimated cost of repair and rehabilitation and the estimated value of the property before the repair and rehabilitation project. The maximum mortgage term is 40 years, or not in excess of three-fourths of the remaining economic life of the project, whichever is less. Contractors for new construction or substantial rehabilitation projects must comply with prevailing wage standards under the Davis-Bacon Act.

Eligible Applicants
Eligible mortgagors include private profit motivated entities, public bodies, and others who meet HUD requirements for mortgagors. All families are eligible to occupy a dwelling in a structure where the mortgage is insured under the program, subject to normal tenant selection.

Application
Section 220 is eligible for Multifamily Accelerated Processing (MAP). For new construction and substantial rehabilitation loans, the sponsor works with the MAP-approved lender who submits required exhibits for the pre-application stage. HUD reviews the lender's exhibits and will either invite the lender to apply for a Firm Commitment for mortgage insurance, or decline to consider the application further. If HUD determines that the exhibits are acceptable, the lender then submits the Firm Commitment application, including a full underwriting package, to the local Multifamily Hub or Program Center for review. The application is reviewed to determine whether the proposed loan is an acceptable risk. Considerations include market need, zoning, architectural merits, capabilities of the borrower, availability of community resources, etc. If the project meets program requirements, the Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Applications submitted by non-MAP lenders must be processed by HUD field office staff under Traditional Application Processing (TAP). The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to determine preliminary feasibility of the project. The sponsor must then submit a site appraisal and market analysis application (SAMA) (for new construction projects), or feasibility application (for substantial rehabilitation projects). Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a Firm Commitment application through a HUD-approved lender for processing. If the proposed project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/renturbanhsg220.cfm.

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Rental & Cooperative Housing: Section 221(d)(3) and (4)

Summary
Section 221(d)(3) (nonprofit sponsors) and 221(d)(4) (profit-motivated sponsors) insures mortgage loans to facilitate the new construction or substantial rehabilitation of multifamily rental or cooperative housing for moderate-income families, elderly, and the handicapped. Single Room Occupancy (SRO) projects may also be insured under this section. Section 221(d)(3) and Section 221(d)(4) insures lenders against loss on mortgage defaults. Both programs assist private industry in the construction or rehabilitation of rental and cooperative housing for moderate-income and displaced families by making capital more readily available. The program allows for long-term mortgages (up to 40 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage Backed Securities.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Insured mortgages may be used to finance the 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. The principal difference between the (d)(3) and (d)(4) programs is the amount of insured mortgage available to non-profit and profit motivated sponsors. Under Section 221(d)(3), nonprofit sponsors or cooperatives may receive an insured mortgage up to 100 percent of HUD/FHA estimated replacement cost of the project. Profit motivated sponsors using Section 221(d)(4) and all types of sponsors under Section 221(d)(4) can receive a maximum mortgage of 90 percent of the HUD/FHA replacement cost estimate. Contractors for new construction and substantial rehabilitation projects must comply with prevailing wage standards under the Davis-Bacon Act. Section 221(d)(3) mortgages require appropriated credit subsidy, which is limited.

Eligible Applicants
Eligible mortgagors include public, profit-motivated sponsors, limited distribution, nonprofit cooperatives, builder-seller, investor-sponsor, and general mortgagors. All families are eligible to occupy dwellings in a structure whose mortgage is insured under this program, subject to normal tenant selection. There are no income limits. Projects may be designed specifically for the elderly or handicapped.

Application
Sections 221(d)(3) and 221(d)(4) are eligible for Multifamily Accelerated Processing (MAP). The sponsor works with the MAP-approved lender who submits required exhibits for the pre-application stage. HUD reviews the lender's exhibits and will either invite the lender to apply for a Firm Commitment for mortgage insurance, or decline to consider the application further. If HUD determines that the exhibits are acceptable, the lender then submits the Firm Commitment application, including a full underwriting package, to the local Multifamily Hub or Program Center for review. The application is reviewed to determine whether the proposed loan is an acceptable risk. Considerations include market need, zoning, architectural merits, capabilities of the borrower, availability of community resources, etc. If the proposed project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Applications submitted by non-MAP lenders must be processed by HUD field office staff under Traditional Application Processing (TAP). The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to determine preliminary feasibility of the project. The sponsor must then submit a site appraisal and market analysis (SAMA) application (for new construction projects), or feasibility application (for substantial rehabilitation projects). Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. If the proposed project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/rentcoophsg221d3n4.cfm

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Single Room Occupancy Projects: Section 221(d)(3) and (4)

Summary
Section 221(d)(3) and 221(d)(4) program insures mortgage loans for multifamily properties consisting of single-room occupancy (SRO) apartments. There are no Federal rental subsidies involved with this SRO program. It is aimed at those tenants who have a source of income but are priced out of the rental apartment market. SRO projects generally require assistance from local governing bodies or charitable organizations in order to reduce the rents to affordable levels. Although SRO housing is intended for very low-income persons, the program does not impose income limits for admission.
Section 221(d)(3)(nonprofit borrowers) and Section 221(d)(4)(profit motivated borrowers) insure lenders against loss on mortgages. The program encourages construction or substantial rehabilitation of single-room apartment buildings with financing insured by HUD, thus enabling people with very limited incomes to find clean and safe housing.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Insured mortgages may be used finance construction or substantial rehabilitation of projects consisting of five or more one room SRO units, with no more than 10 percent of the total gross floor space dedicated to commercial use (20 percent for substantial rehabilitation projects). Each SRO apartment can have its own kitchen or bathroom facilities, or these facilities may be shared by several apartments. Apartments can be designed to allow for more than one occupant, but the number of people living in a unit cannot exceed the number permitted by occupancy requirements in State and local codes and the Fair Housing Act. The maximum amount of a Section 221(d)(3) nonprofit loan is 100 percent of the estimated replacement cost. The maximum amount of a Section 221(d)(4) profit motivated loan is 90 percent of the estimated replacement cost. The maximum mortgage term is 40 years or up to three-fourths of the building's remaining economic life, whichever is less. Contractors for new construction and substantial rehabilitation projects must comply with prevailing wage standards under the Davis-Bacon Act.

Eligible Applicants
The program is used by nonprofit organizations, builders or sellers teamed with a nonprofit purchaser, limited-distribution entities, profit-motivated firms, or public agencies. Cooperative lenders or investors are not eligible. Residents are subject to normal tenant selection procedures. There are no income limits for admission. This program cannot be used with project-based subsidies.

Application
Applicants must document: (A) a clear need for the proposed SRO, (B) its experience operating SROs, (C) local government support of the project; and a relocation plan, if needed.

1. The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to determine preliminary feasibility of the project.
2. The sponsor then must submit a site appraisal and market analysis application (SAMA) (for new construction projects), or feasibility application (for substantial rehabilitation projects).
3. Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. Considerations include market need, zoning, architectural merits, capabilities of the borrower, availability of community resources, etc.
4. If the proposed project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/sro221d3n4.cfm.

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Two-Year Operating Loss Loans: Section 223(d)

Summary
Section 223(d) insures two-year operating loss loans that covers operating losses during the first 2 years after completion (or any other 2-year period within the first 10 years after completion) of multifamily projects with a HUD-insured first mortgage. Section 223(d) helps avoid insurance claims on HUD-insured multifamily mortgages by insuring separate loans to cover operating losses.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
This program offers insurance for operating loss loans on projects whose first mortgage is insured by HUD. HUD insures loans to cover excess expenses over project gross income incurred during the first two years following the date of project completion. The loan amount, terms, and conditions are prescribed by HUD. HUD may also provide an operating loss loan during any period of consecutive months (not exceeding 24 months) in the first 10 years after the date of project completion. A project can receive both loans but not for same two year period. HUD insures the loan under the same section as the original mortgage in an amount not exceeding the excess of operating expenses over project income. The loan term is limited to the unexpired term of the original mortgage. This program requires appropriated credit subsidy, which is limited.

Eligible Applicants
Owners of multifamily projects or facilities subject to a mortgage insured by HUD
are eligible to apply.

Application
The sponsor has a pre-application conference with the local HUD Multifamily Hub or Program Center to determine preliminary feasibility. The sponsor submits a formal application through a HUD-approved lender to the Multifamily Hub or Program Center where the loan will be processed. Information submitted by the applicant will be reviewed and a determination will be made as to the maximum insurable loan amount. Applications must be made within 3 years after the end of the 2-year operating loss period for the 2-year loan. If program requirements are met, the Multifamily Hub or Program Center will issue a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/oplossloans223d.cfm.

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Purchase or Refinancing of Existing Multifamily Housing Projects: Section 207/223(f)

Summary
Section 207/223(f) insures mortgage loans to facilitate the purchase or refinancing of existing multifamily rental housing. These projects may have been financed originally with conventional or FHA insured mortgages. Properties requiring substantial rehabilitation are not eligible for mortgage insurance under this program. HUD permits the completion of non-critical repairs after endorsement for mortgage insurance.
Section 223(f) insures lenders against loss on mortgage defaults. The program allows for long- term mortgages (up to 35 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage-Backed Securities. This eligibility for purchase in the secondary mortgage market improves the availability of loan funds and permits more favorable interest rates.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
The property must contain at least 5 residential units with complete kitchens and baths and have been completed or substantially rehabilitated for at least 3 years prior to the date of the application for mortgage insurance. The program allows for non-critical repairs that must be completed within 12 months of loan closing. Projects requiring substantial rehabilitation are not acceptable under this section and may not involve the replacement of more than one major system. The remaining economic life of the project must be long enough to permit a ten-year mortgage. The mortgage term cannot exceed 35 years or 75 percent of the estimated life of the physical improvements, whichever is less. Davis Bacon prevailing wage requirements do not apply to this program.

The maximum mortgage limitation for a purchase transaction is the lesser of:

1. 85 percent of HUD appraised value;
2. 85 percent of the acquisition cost;
3. Section 207 statutory per unit limits, adjusted by the local Field Office high cost percentage for the locality; or
4. a mortgage amount supported by 85 percent of net income.

The maximum mortgage limitation for a refinance transaction is the lesser of:

1. 85 percent of HUD appraised value;
2. Section 207 statutory per unit limits, adjusted by the local field Office high cost percentage for the locality;
3. the mortgage amount supported by 85 percent of net income; or
4. the greater of the cost to refinance or 80 percent of HUD appraised value.

Eligible Applicants
Owners or prospective purchasers of eligible multifamily properties may apply for insured mortgages through HUD-approved lenders. All persons are eligible to occupy such projects subject to normal occupancy restrictions.

Application
Section 223(f) is eligible for Multifamily Accelerated Processing (MAP). The sponsor works with the MAP-approved lender who submits required exhibits for Firm Commitment application, including a full underwriting package to the local Multifamily Hub or Program Center for review. The Multifamily Hub or Program Center reviews the application to determine whether the proposed loan is an acceptable risk. Considerations include market need and the capabilities of the borrower. FHA underwriting analysis must determine that there is enough project income to repay the loan, taking into account all necessary project expenses. If the proposed project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Applications submitted by non-MAP lenders must be processed by HUD field office staff under Traditional Application Processing (TAP). Under TAP, there are only two processing stages: the conditional commitment stage and the firm commitment stage. The sponsor is required to have a pre-application conference during the conditional commitment stage to determine the appraised value and maximum mortgage amount. At the firm commitment stage the local HUD Multifamily Hub or Program Center determines the amount of the mortgage available to the purchaser or refinancing borrower in the proposed transaction. If the proposal meets FHA program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/purchrefi223f.cfm.

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Nursing Homes, Board and Care and Assisted-Living Facilities: Section 232 and 232/223(f)

Summary
Section 232 insures mortgage loans to facilitate the construction and substantial rehabilitation of nursing homes, intermediate care facilities, board and care homes, and assisted-living facilities. Section 232/223(f) allows for the purchase or refinancing with or without repairs of existing projects not requiring substantial rehabilitation. Section 232 insures lenders against the loss on mortgage defaults. Section 232 insures mortgages that cover the construction and rehabilitation of nursing homes and assisted living facilities for people who need long-term care or medical attention. The program allows for long-term, fixed rate financing (up to 40 years) for new and rehabilitated properties and (up to 35 years) for existing properties without rehabilitation that can be financed with Government National Mortgage Association (GNMA) Mortgage Backed Securities.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Insured mortgages may be used to:

1. finance the construction and rehabilitation of nursing homes, intermediate care facilities, board and care homes, and assisted living facilities;
2. enable borrowers to buy or refinance (with or without repairs) projects that do not need substantial rehabilitation;
3. install fire safety equipment.

Facilities must accommodate 20 or more residents who require skilled nursing care and related medical services, or those who while not in need of nursing home care, are in need of minimum but continuous care provided by licensed or trained personnel. Assisted living facilities, nursing homes, intermediate care facilities, and board and care homes may be combined in the same facility covered by an insured mortgage or may be in separate facilities. Insured mortgages may include the cost of major movable equipment, daycare facilities, and the installation of fire safety equipment. Assisted living facilities, nursing homes, intermediate care homes, and board and care homes must be licensed or regulated by the appropriate state agency, municipality, or other political subdivision where located. The maximum amount of the loan for new construction and substantial rehabilitation is equal to 90 percent (95 percent for nonprofit sponsors) of the estimated value of physical improvements and major movable equipment. For existing projects, the maximum is 85 percent (90 percent for nonprofit sponsors) of the estimated value of the physical improvements and major movable equipment.

Eligible Applicants
Eligible mortgagors include investors, builders, developers, public entities (nursing homes) and private nonprofit corporation and associations. For nursing homes only, applicants may be public agencies that are licensed or regulated by a State to care for convalescents and people who need nursing or intermediate care. A potential applicant must submit a Certificate of Need from the State agency designated by the Public Health Service Act. (If no State agency exists, an alternative study is required.) No Certificate of Need is required for board and care homes or assisted living facilities; instead, the applicant needs a statement from the appropriate State agency. The applicant must also provide documents that demonstrate the appropriateness of the property and the qualifications of the lender. Residents requiring skill nursing, custodial care, and assistance with activities of daily living are eligible to live in facilities insured under this program.

Application
Section 232 is eligible for Multifamily Accelerated Processing (MAP). For new construction and substantial rehabilitation loans, the sponsor works with the MAP-approved lender who submits required exhibits for the pre-application stage. For refinance or purchase of an existing health care facility, under Section 232/223(f), there is no pre-application stage. HUD reviews the lender's exhibits and will either invite the lender to apply for a Firm Commitment for mortgage insurance, or decline to consider the application further. If HUD determines that the exhibits are acceptable, the lender then submits an application for Firm Commitment, including a full underwriting package to the Multifamily Hub or Program Center for processing. The local Multifamily Hub or Program Center reviews the application to determine whether the proposal is an acceptable risk. Considerations include market need, zoning, architectural merits, capabilities of the borrower, availability of community resources, etc. If the proposed health care facility meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Applications submitted by non-MAP lenders must be processed by HUD field office staff under Traditional Application Processing (TAP). Under TAP the sponsor will have a pre-application conference with the local HUD Multifamily Hub or Program Center to determine preliminary feasibility of the project. The sponsor must then submit a site appraisal and market analysis application (SAMA) (for new construction projects), or a feasibility application (for substantial rehabilitation projects). Following HUD's issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved lender for processing. If the proposed health care project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/nursingalcp232.cfm.

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Supplemental Loan Insurance for Multifamily Rental Housing: Section 241(a)

Summary
Section 241(a) insures mortgage loans to finance repairs, additions, and improvements to multifamily rental housing and health care facilities with FHA insured first mortgages or HUD-held mortgages. Section 241(a) insures lenders against loss on mortgage defaults. The program is intended to keep the project competitive, extend its economic life, and to finance the replacement of obsolete equipment. Insured mortgages finance repairs, additions, and improvements to multifamily projects, group practice facilities, hospitals, or nursing homes already insured by HUD or held by HUD. Major movable equipment for insured nursing homes, group practice facilities, or hospitals may be covered by a mortgage under this program.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Insured mortgages may finance either:

1. additions and improvements of multifamily housing projects, nursing homes, hospitals, and assisted living facilities already subject to HUD/FHA insured mortgages or mortgages held by HUD;
2. finance energy conservation improvements. The proceeds of a loan involving an insured nursing home, hospital, or assisted living facility may also be used to purchase equipment to be used in the operation of the facility.

The maximum insurable loan is 90 percent of the value of the addition or improvement, or an amount which, when added to the outstanding balance of the existing insured mortgage, does not exceed the amount insurable under the program pursuant to the mortgage covering such project of facility that is insured. Where the project is covered by a mortgage held by HUD the principal amount of the loan shall be in an amount acceptable to the Secretary. Contractors must comply with prevailing wage requirements under the Davis-Bacon Act. 241(a) for apartments requires appropriated credit subsidy, which is limited.

Eligible Applicants
Owners of a multifamily project or facility already subject to a mortgage insured
or held by HUD. Individuals, families, and owners of multifamily projects are also eligible.

Application
The sponsor will have a pre-application conference with the local HUD Multifamily Hub or Program Center to determine the feasibility of the proposed improvements before submitting a firm commitment application. The sponsor must then submit a firm commitment application to the local Multifamily Hub or Program Center through a HUD-approved lender for processing. If the project meets program requirements, the local Multifamily Hub or Program Center issues a commitment to the lender for mortgage insurance.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/supplement241a.cfm.

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Qualified Participating Entities Risk-Sharing Program: Section 542(b)

Summary
The Department of Housing and Urban Development (HUD) provides reinsurance on multifamily housing projects whose mortgage loans are originated, underwritten, serviced, and disposed of by Qualified Participating Entities (QPEs) and/or their approved lenders. Section 542(b) encourages the development and preservation of affordable housing. The program was developed as a demonstration program to test innovative mortgage insurance and reinsurance products to provide affordable multifamily housing through a partnership between the QPEs and HUD. HUD's mortgage credit enhancements are used to support the underwriting and production strengths of Fannie Mae, Freddie Mac, and other qualified Federal, State, and local public financial and housing institutions. The program provides a new insurance authority independent of the National Housing Act. The purpose of the program is to support and encourage the production and preservation of affordable Housing. The program provides insurance and reinsurance for multifamily housing projects whose loans are originated, underwritten, serviced, and disposed of by a QPE and/or its approved lenders.

Type of Assistance
Guaranteed/Insured Loans. A QPE and/or its approved lenders may originate and underwrite affordable housing loans. If there is a default, the QPE will pay all costs associated with loan disposition and will seek reimbursement from HUD. The HUD risk share will be 50 percent pro rata. The program enables HUD to provide alternative forms of Federal credit enhancement to increase affordable multifamily housing lending.

Eligible Activities
HUD selectively invites QPEs to participate in a variety of mortgage options to assess the effectiveness of the various credit enhancements. The QPE and HUD enter into Risk-Sharing agreements to implement the program. A QPE or its lender, in turn, makes loans to investors, builders, developers, public entities, and private nonprofit corporations or associations.

Eligible Applicants
Eligible mortgagors include investors, builders, developers, public entities, and private non-profit corporations or associations may apply to a qualified QPE and/or its lender. Individuals, families, and property owners are also eligible.

Application
To obtain mortgage insurance, a potential lender should consult with a HUD-approved QPE to obtain mortgage insurance. The potential lender then submits an application directly to the QPE. If the QPE refuses the application, the applicant may modify the application and reapply. While QPEs are vested with a large amount of responsibility for projects, HUD has the authority to adjust the mortgage amount and endorse the note.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/riskshare542b.cfm.

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Housing Finance Agency Risk-Sharing Program: Section 542(c)

Summary
Section 542(c) enables the U.S. Department of Housing and Urban Development (HUD) and State and local housing finance agencies (HFAs) to provide new risk-sharing arrangements to help those agencies provide more insurance and credit for multifamily loans. The Program provides new insurance authority independent of the National Housing Act. Section 542(c) provides credit enhancement for mortgages of multifamily housing projects whose loans are underwritten, processed, serviced, and disposed of by HFAs. HUD and HFAs share in the risk of the mortgage. The program was originally designed as a pilot to assess the feasibility of risk-sharing partnerships between HUD and qualified State and local HFAs in providing affordable housing.

Type of Assistance
FHA mortgage insurance for HUD-approved lenders.

Eligible Activities
Participating qualified State and local HFAs may originate and underwrite affordable housing loans including new construction, substantial rehabilitation, refinancing, and housing for the elderly. The program provides full FHA mortgage insurance to enhance HFA bonds to investment grade. HFAs may elect to share from 10 to 90 percent of the loss on a loan with HUD. The HFA reimburses HUD in the event of a claim pursuant to terms of the risk sharing agreement.

An HFA must be approved by HUD to participate in this program. To be eligible
the HFA must: (1) carry the designation of "top tier" or its equivalent as evaluated by Standard & Poor's or another nationally recognized rating agency; or (2) receive an overall rating of "A" for the HFA for its general obligation bonds from a nationally recognized rating agency; and (3) otherwise demonstrate its capacity as a sound, well-managed agency that is experienced in financing multifamily housing; and (4) have at least 5 years experience in multifamily underwriting; and (5) be a HUD-approved multifamily mortgagee in good standing.

Eligible Applicants
Eligible mortgagors include investors, builders, developers, public entities, and private non-profit corporations or associations may apply to a qualified HFA.
Eligible customers for affordable housing include individuals, families, and property owners.

Application
To obtain mortgage insurance, a potential borrower should consult a HUD-approved HFA as the single point of contact for additional information regarding the process. The lender on behalf of the borrower then submits an application directly to the HFA.
The HFA obtains specific approvals from the local HUD Multifamily Hub or Program Center on previous participation and environmental assessments.

Contact Information
For general questions about HUD and its programs, please contact William Jolley, Boise Field Office Director at (208) 334-1990 or visit the program website at http://www.hud.gov/offices/hsg/mfh/progdesc/riskshare542c.cfm.

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