Mortgage Insurance Cooperative Projects
Program Funding
Annual program obligations reported to SAM.gov.
Program Objective
Enables nonprofit cooperative ownership housing corporations or trusts to develop or sponsor the development of housing projects to be operated as cooperatives. Section 213 allows investors to provide good quality multifamily housing to be sold to such nonprofit corporations or trusts upon completion of construction or rehabilitation.
Eligibility
Eligible Applicants
- Not-for-Profit Organization
Eligible mortgagors are nonprofit cooperatives, ownership housing corporations or trusts which may either sponsor projects directly, sell individual units to cooperative members, or purchase projects from investor-sponsors (builders, developers, or others who meet HUD requirements).
How to Apply
Award Procedure
The local HUD field office decides whether to approve, or reject individual applications and whether to issue a commitment to the lender to insure the mortgage.
Processing times will vary though processing goals are 90 days less any time the lender spends responding to HUD requests for additional information, documentation, etc.
Program details & compliance
Description
Mortgage insurance to finance new construction, substantial rehabilitation, and purchase of cooperative housing projects.
Mission Categories
Primary: Cooperatives, Rental
Use of Funds
Allowed Uses
Section 213 insures lenders against loss on mortgages. Insured mortgages may be used to finance construction, acquisition of existing, or rehabilitation of detached, semidetached, row, walk-up, or elevator type housing consisting of five 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-replacement cost and debt service limitations. Contractors for new construction and substantial rehabilitation housing projects must comply with prevailing wage requirements under the Davis-Bacon Act.
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