Mortgage Insurance Cooperative Projects

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.

Agency - Department of Housing and Urban Development

The Department of Housing and Urban Development's mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. HUD fulfills this mission through high ethical standards, management and accountability, and by forming partnerships with community organizations.

Office - See Regional Agency Offices.

Persons are encouraged to communicate with the Multifamily Hub or Program Center with jurisdiction for the proposed property.

HUD Multifamily Hubs and Program Centers are listed on the web at

Program Accomplishments

Not Applicable.

Uses and Use Restrictions

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.

Eligibility Requirements

Applicant Eligibility

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).

Beneficiary Eligibility

Members of the cooperative are eligible to occupy a dwelling in the structure whose mortgage is insured under the program.


Documentation regarding the characteristics of the property and the qualifications of the mortgagor are assembled by the mortgagee and submitted with the application. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.

Aplication and Award Process

Preapplication Coordination

Preapplication coordination is required.

An environmental impact assessment is required for this program.

This program is eligible for coverage under E.O.

12372, 'Intergovernmental Review of Federal Programs.' An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.

Application Procedures

This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The sponsor submits the SAMA application or feasibility letter to the local Hub or Program Center. Following HUD's approval and issuance of a SAMA or feasibility letter, the sponsor submits a firm commitment application through a HUD-approved mortgagee to the local Multifamily Hub or Program Center for processing.

Award Procedures

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.


Not Applicable.


National Housing Act, as amended, Section 213; Housing Act of 1950, Public Law 81-475; Housing Act of 1956, Public Law 84-1020, 12 U.S.C. 1715(e); Public Law 91-152, 83 Stat. 379, 383; Public Law 84-345, 69 Stat. 635; Public Law 87-70, 75 Stat. 149, 179; Public Law 86-372, 73 Stat. 654, 656; Public Law 89-117, 79 Stat. 451, 469; Public Law 89-754, 80 Stat. 1255-66. , Title 24, Part 213.

Range of Approval/Disapproval Time

Processing times will depend upon the degree of preparation by the sponsor and HUD Multifamily Hub or Program Center workload.


If any application for mortgage insurance is denied, HUD will state the reasons for the denial. If reapplication is desired, the applicant may modify the application and reapply.


The term of a commitment to insure may be extended when more time is required.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula. This program has no matching requirements. MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

The maximum mortgage term is 40 years, or not in excess of three-fourths of the remaining economic life, whichever is less, except for sales type cooperatives where the maximum term is 35 years or not in excess of three-fourths of the remaining economic life, whichever is less. See the following for information on how assistance is awarded/released: Mortgage Insurance provided over the life of the loan.

Post Assistance Requirements


No reports are required.


In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor in order to determine their compliance and conformance with the regulations and standards.


Mortgagees are required to service and maintain records in accordance with acceptable lending practices of prudent lending institutions and HUD regulations.

Financial Information

Account Identification



(Guaranteed/Insured Loans) FY 15 Not Separately Identifiable(Exp: Reported under 14.117); FY 16 Not Separately Identifiable(Exp: Reported under 14.117); and FY 17 Not Separately Identifiable(Exp: Reported under 14.117)

Range and Average of Financial Assistance

No Data Available.

Regulations, Guidelines, and Literature

HUD Handbooks 4550.1 and 4550.2 'Basic Cooperative Housing Insurance, and Pre-sale Management Type Co-ops', no charge; HUD Handbook 4550.3, 'Converting an Existing Project to a Cooperative', no charge; HUD Handbook 4240.3, Section 203 (n), Application Through Insurance (Single Family), no charge; HUD Handbook 4550.4, Supplementary Loan-Cooperative Housing', no charge; HUD Handbook 4550.5, 'Investor-Sponsor and Nonprofit Sponsorship of Housing Cooperatives', no charge; HUD Handbook 4550.6, 'Sales Type Cooperatives', no charge available on

Information Contacts

Regional or Local Office

See Regional Agency Offices. Persons are encouraged to communicate with the Multifamily Hub or Program Center with jurisdiction for the proposed property. HUD Multifamily Hubs and Program Centers are listed on the web at

Headquarters Office

Carmelita James 451 Seventh Street SW, Washington, District of Columbia 20410 Email: Phone: (202) 402-2579

Criteria for Selecting Proposals

Not Applicable.

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Edited by: Michael Saunders

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