Nonprofit borrowers may not have a financial interest, regardless of the ownership or financing type in more than seven dwelling units within a two block radius. In determining the number of dwelling units owned by the borrower, the mortgagee must count each dwelling unit in a two-, three-, and four-family property.
If the borrower owns six or more units in the same general area, a map must be provided disclosing the locations of the units, as evidence of compliance with FHA’s seven unit limitation.
For additional information see Handbook 4000.1 II.A.5.d.xii.(C) available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh