Mortgage Insurance Rental Housing
Program Objective
HUD insures mortgage loans to finance the construction or rehabilitation of a broad range of multifamily rental housing through a variety of programs linked in the Related Federal Assistance section. Though Section 207 itself is no longer active, this assistance listing is used to provide total FHA multifamily mortgage commitments across those programs. Due to challenges in breaking out projected commitments by each listing, the activity is summed and reported here.
Eligibility
Eligible Applicants
- For-Profit Organization
Eligible mortgagors include investors, builders, developers, and others who meet HUD requirements for mortgagors.
Beneficiaries
- For-Profit Organization
- U.S. Citizen
All families eligible to occupy dwellings in a structure whose mortgage is insured under the program, subject to normal tenant selection.
How to Apply
Award Procedure
If the project meets program requirements, the local HUD Multifamily Hub or Satellite Office issues a commitment to the lender to insure the mortgage.
Processing timelines goals are for a 60-day processing of a Firm Application excluding time the lender is responding to HUD requests for clarification or information.
Program details & compliance
Description
Section 207 insures lenders against loss on mortgage defaults. The intent of the program is to increase the supply of quality and reasonably priced rental housing for middle-income families.
Mission Categories
Primary: Multifamily
Other categories:
Property and Mortgage Insurance
Use of Funds
Allowed Uses
Section 207 insures lenders against the loss on mortgage defaults. Section 207 mortgage insurance, although still authorized, is no longer used for new construction and substantial rehabilitation. It is however, the primary vehicle for the Section 223(f) refinancing program. Multifamily new construction and substantial rehabilitation projects are currently insured under Section 221(d)(3) and Section 221(d)(4) programs. Insured mortgages may be used to finance the construction or rehabilitation of rental detached, semidetached, row, walk-up, or elevator type structures with 5 or more units. 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.
Required Documentation
A borrower, also called a 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 Satellite Office issues a commitment to the lender for mortgage insurance.
Reporting & Compliance
Applicable 2 CFR 200 Subparts
- Subpart F — Audit Requirements
Formula
24 CFR part 200 and part 207.