Mortgage insurance for housing in urban renewal areas, areas in which concentrated
revitalization or code enforcement activities have been undertaken by local government, or to
alter, repair, or improve housing in those areas.
Nature of Program
: FHA insures mortgages on new or rehabilitated homes or multifamily
structures located in designated urban renewal areas and areas with concentrated programs of
code enforcement and neighborhood development. Insured mortgages may be used to finance
construction or rehabilitation of detached, semidetached, row, walk-up, or elevator-type rental
housing or to finance the purchase of properties that have been rehabilitated by a local public
agency. Properties must consist of two or more units and be located in an urban renewal area,
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
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.
: Investors, builders, developers, individual homeowners, and apartment
: Section 220 of the National Housing Act (12 U.S.C. 1715k).
Regulations are at 24 CFR part 200, subpart A, and part 220.
: Information Sources: Assistant Secretary for Housing-Federal
Housing Commissioner; HUD Multifamily Hubs, Regional Centers, Satellite Offices, and
On the Web
: The Multifamily program is active. The Single Family program,Supplemental
Loan program, and 221(d)(3) program are not active.