Housing - Federal Public Housing Programs - § 231 Housing Mortgage Insurance For The Elderly

The § 231 program provides low-interest, fixed-rate mortgage loans to housing developers for either construction or rehabilitation of rental units occupied by the elderly or the handicapped. Through this program, lenders are insured against losses on mortgages given to build or substantially rehabilitate housing for the elderly and handicapped. Certain requirements must be met regarding the size and type of units, and only certain individuals and families are eligible to live in units developed under § 231.How Is Assistance Is Provided And What Are The Terms Of Assistance?

Under § 231, the Department of Housing and Urban Development (HUD) provides mortgage loans to enable developers to renovate or construct housing for use by the elderly or handicapped. Nonprofit, public, or private sponsors are eligible to receive the assistance as long as there are at least eight units in the housing.

Nonprofit and public sponsors may receive up to 100 percent of the building’s replacement cost, while others may only receive assistance at 90 percent. The length of the loan is the lesser of 40 years or 75 percent of the remaining economic life of the building.

Three charges are associated with obtaining § 231 assistance: (1) an annual mortgage premium, which is .5 percent of the mortgage amount; (2) an application fee, which is $ 3 per $ 1,000 financed; and (3) an inspection fee, which is $ 5 per $ 1,000 financed.

There is an extensive application process that developers must follow, starting with determining the feasibility of the project and compiling a full-fledged appraisal or feasibility application. Some of the considerations are the architectural merit of the project, the market’s need for the housing, the developer’s ability to repay the loan, the availability of community resources, and the zoning of the property.

Who Is Eligible To Live In § 231 Housing?

Only those at least 62 years of age and those with disabilities are eligible to live in § 231 housing.

Copyright 2008 LexisNexis, a division of Reed Elsevier Inc.

Thursday, April 17th, 2008 at 2:00 pm and is filed under Elder Law Newsletter. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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