Supplemental Loan Insurance Multifamily Rental Housing
Program Funding
Annual program obligations reported to SAM.gov.
Program Objective
Section 241(a) insures lenders against loss on mortgage defaults on projects already insured by HUD or held by HUD. 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.
Eligibility
Eligible Applicants
- For-Profit Organization
Owners of a multifamily project or facility already subject to a mortgage insured by HUD or held by HUD.
Beneficiaries
- For-Profit Organization
Individuals, families, and owners of multifamily projects.
How to Apply
Award Procedure
If the proposed improvements meet program requirements, the local HUD Multifamily Hub and Satellite Office issues a commitment to the lender to insure the mortgage.
Processing time goal is 90 days less any time the lender spends responding to follow up questions or documentation requests from HUD.
Program details & compliance
Description
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.
Mission Categories
Primary: Property and Mortgage Insurance
Use of Funds
Allowed Uses
Section 241(a) insures lenders against loss on loans made either (1) to finance additions and improvements of multifamily housing projects, nursing homes, hospitals and group practice facilities already subject to HUD/FHA insured mortgages or mortgages held by HUD, or (2) to finance energy conservation improvements. The proceeds of a loan involving an insured nursing home, hospital or a group practice facility may also be used to purchase equipment to be used in the operation of such nursing home or facility. The maximum insurable loan for an insured project is 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 which the mortgage covering such project or facility is insured. Where the project is covered by a mortgage held by the Secretary the principal amount of the loan shall be in an amount acceptable to the Secretary. Contractors of substantial rehabilitation projects must comply with prevailing wage requirements under the Davis-Bacon Act. Section 241(a) for apartments requires appropriated credit subsidy, which is limited.
Required Documentation
Documentation regarding the characteristics of the property and the qualifications of the mortgagor are assembled by the mortgagee and submitted with the application.
Reporting & Compliance
Applicable 2 CFR 200 Subparts
- Subpart F — Audit Requirements
Formula
This program is authorized under the National Housing Act, as amended,
Section 241, Public Law 90-448 (12 U.S.C. 1715) and Public Law 94-375
(12 U.S.C. 1715Z-6). The program regulations are found in 24 CFR 241. The program is administered by the Office of Multifamily Housing Programs, Office of Production, Program Administration Division.