4550.3

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TABLE OF CONTENTS

Paragraph Page

CHAPTER 1. ADMINISTRATION

1-1. Introduction 1-1

1-2. Eligibility 1-1

1-3. Appraisal of Property 1-2

1-4. Percentage of Rehabilitation 1-2

1-5. Prevailing Wage Requirements 1-2

1-6. Cost Certification 1-3

1-7. Determination of Feasibility 1-3

1-8. Consumer Safeguards 1-4

1-9. Tenants 1-5

1-10. Credit Approval 1-5

1-11. Initiating the Project and Sponsorship of the

Acquiring Cooperative

1-12. Presale Requirements 1-6

1-13. Model Forms, Documents and Procedures used in

Section 213(i) Cases 1-6

1-14. Principal Differences in Documents, Forms and

Procedures for 213(i) 1-7

1-15. Rehabilitation Loans 1-8

CHAPTER 2. VALUATION INSTRUCTIONS

2-1. Rehabilitation 2-1

2-2. Finding of Value 2-1

2-3. Value for Continued Use as a Cooperative 2-1

2-4. Valuation as a Rental Project 2-1

2-5. Processing as A Cooperative 2-2

CHAPTER 3. MORTGAGE CREDIT REQUIREMENTS UNDER SECTION 213(i)

3-1. Existing Construction Without Rehabilitation 3-1

3-2. Existing Construction With Rehabilitation 3-1

3-3. Existing Construction Resulting From an

Investor-Sponsor Transaction 3-2

3-4. Amortization Period of Loan 3-2

3-5. Miscellaneous Type Mortgages 3-3

3-6. Refinancing Transactions 3-4

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4550.3

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FORMS APPENDIX III - EXISTING PROPERTIES

Appendices FHA Forms

3-1 3201 Application for Mortgage Insurance (with instructions)

\*3203 Cooperative Membership Exhibit

\*HM-93211 Monthly Report of Cooperative Housing Corporations

3-2 3212-B Mortgagor\'s Certificate

\*3213 Off-site Bond

3-3 3218-A Mortgagor\'s Certificate (not Involving Repairs)

\*3219 Permission to Occupy

3-4 3220-A Mortgagee\'s Certificate (Involving Repairs)

3-5 3224-A Mortgagee\'s Certificate

\*3225 Regulatory Agreement

\*3227 Sponsor\'s Certification

\*3232 Model Form of Subscription Agreement

\*3232-A Supplement to Subscription Agreement

\*3232-B Model Form of Additional Down Payment Agreement

\*3232-C Model Form of Additional Payment Agreement

\*3234-B Model Form of Certificate of Incorporation

(When Regulatory Agreement Used)

\*3235 Model Form of Certificate of Incorporation

\*3237 Model Form of Occupancy Agreement

\*3237-A Model Form of Sublease

\*3238 Model Form of Management Agreement

\*HM-93240 Annual Operating Budget for Cooperative Housing

Corporations

3-6 3241-A Model Form of Information Bulletin

\*3245 Model Form of By-Laws

3-7 3248 Commitment to Insure Mortgage (Not Involving

Repairs)

3-8 3248-A Commitment for Insurance of Advances (Involving

Improvements and Sec. 213 Rehabilitation

Projects)

3-9 3255-B Model Form of Sales Agreement

3-10 3257-B FHA Required Closing Instruments (Involving

Improvements)

3-11 3257-E FHA Required Closing Instruments (Not Involving

Improvements)

\*3258 Model Form of Ground Lease

\*3259 Surety Bond Against Defects, etc.

\*3261 Model Form of Sales Price Certification (Section

221(d)(3), Transfers of Membership)

\*Copy of form included in Forms Appendix Reference (3) of

the Foreword.

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4550.3

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FOREWORD

Existing structures may become management type cooperatives. Procedures,

including underwriting procedures, necessary to effect conversion of an

existing building to a management type cooperative in accordance with

the provisions of Section 213(i) of the National Housing Act are set

forth in this third handbook of the cooperative housing series.

Rehabilitation loans, where at least 25 percent of the mortgage proceeds

cover the cost of new physical improvements, provided by Section 213(i)

and Section 221(d)(3) Market Interest Rate, are included.

Advice regarding prevailing wage requirements, determination of

feasibility, precautionary measures to protect consumers\' interests and
the

interests of tenants, may be found in the first few pages of this
handbook.

An appendix of model forms and a numerical reference to applicable HUD/

FHA Regulations are included for ready reference and convenience.

Applicable instructions contained in preceding handbooks of the
cooperative

housing series as well as in the basic project mortgage handbooks

are incorporated by reference in this handbook.

Copies of this handbook should be made available to the prospective

sponsors who have read the basic handbook (Reference 2 of this Foreword)

in which the sponsorship criteria is set forth.

Legal Authority:

Subchapter E - Cooperative Housing Insurance

Existing Construction

Subpart A - Eligibility Requirements for Projects - 213.1(a),(b),

(c),(d),(f),(i),(j),(k); 213.2 through .6; 213.7(a),

(d),(e),(f),(g),(h),(i)-(l)(3),(j); 213.8 through

213.23(b); 213.24 through 213.27(except (f); 213.28

through .30(g); 213.31(except (c)(h)(i); 213.32

through .46.

Subpart B - Contract Rights and Obligations - Projects - 213.251

(except (c),(d)); 213.252; 213.253(c); 213.254(c);

213.255(c); 213.256(c); 213.257(a); 213.258(a);

213.259 and .260; 213.265(a); 213.266 through .268;

213.275 through .280 and 207 except as provided in

213.251.

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References:

\(1\) 4420.1 - Pre-Application Handbook for Project Mortgage

Insurance

\(2\) 4550.1 - Basic Cooperative Housing Insurance Handbook

\(3\) 4550.2 - Pre-Sale-Management Type Cooperative Handbook (For

instruction of Commitment Form 3248 see Chapter 6

Final Endorsement)

\(4\) HPMC-FHA 4200.15 (4480.1)\* - Multifamily Reports and Forms

Catalog

\(5\) 4550.5 - Investor-Sponsor and Non-profit Sponsorship of Housing

Cooperative Handbook

\(6\) 4470.1 - Mortgage Credit Analysis for Project Mortgage Insurance

\*The information in parentheses indicates the location of the
referenced

material in the new classification system.

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