FHA Info Messages

FHA INFO 2025-30 - FHA Slashes Red Tape in Push to Make Housing More Affordable and Accessible

June 27, 2025 - Today, the Federal Housing Administration (FHA) published a sweeping set of policy retractions for its Single Family mortgage insurance program, spanning the loan origination process from loan application through endorsement. With this set of policy retractions, FHA is cutting red tape to more effectively deliver on President Trump’s priorities to reduce the costs of homeownership for American families by removing policies that have increased regulatory and financial burdens.

Today’s policy retractions, executed through a series of Mortgagee Letters (ML), are aimed at eliminating policies that directly or indirectly increase the cost of home ownership for aspiring first-time homebuyers. In the spirit of National Homeownership Month, these changes are another direct response to President Trump’s January 20, 2025 Executive Orders aimed at reversing policies that have adversely affected key sectors of the economy, including the housing market.

Today, FHA issued:

• Rescission of Outdated and Costly FHA Appraisal Protocols. This ML eliminates several antiquated and burdensome procedural steps an FHA appraiser must complete during each assignment, better aligning FHA with industry standards and reducing unnecessary costs and delays that are passed through to homebuyers. During the first Trump Administration, HUD made targeted technology investments through FHA Catalyst that have substantially improved FHA’s collateral valuation analytics. As a result, FHA is now able to extend the benefit of these investments to borrowers, lenders, and taxpayers in the form of streamlined appraisal procedures, lower costs, and quicker turn times.
• Rescission of Full-Time Direct Endorsement Underwriter Requirements. This ML rescinds the full-time employment requirement for Direct Endorsement (DE) underwriter eligibility to allow part-time employment with an FHA-approved mortgagee. This update provides mortgagees with increased flexibility to more effectively manage their staffing needs, reduce origination costs, and encourage greater participation in FHA programs.
• Rescission of the Supplemental Consumer Information Form Requirement. The Supplemental Consumer Information Form (SCIF) (Fannie Mae/Freddie Mac Form 1103) is used to collect information about the borrower’s language preferences. Due to its limited benefit and additional collection burden, the SCIF is no longer required to be submitted in the FHA case binder as part of the Uniform Residential Loan Application.
• Rescission of Federal Flood Risk Management Standard (FFRMS) for New Construction Eligibility. FHA has rescinded ML 2024-20, which required that the lowest floor in newly constructed properties located within the one-percent-annual-chance (100-year) floodplain be built at least two feet above the Base Flood Elevation (BFE). This standard would have limited the land available for development and increased the cost of construction for FHA-insured single-family properties, thereby exacerbating the insufficient supply of affordable housing for the next generation of homebuyers. This change is necessary to restore the previously established policy and provide clarity on the current applicable standards for new construction property eligibility and documentation requirements.
• Rescission of Mandatory Pre-Endorsement Inspection Requirements for Properties Located in Presidentially-Declared Major Disaster Areas (PDMDAs). This ML modifies FHA disaster inspection requirements for forward mortgages to align with the industry standard, allowing mortgagees the discretion to assess property condition and determine appropriate risk-based actions prior to endorsement. This update reduces costly and unnecessary delays and will improve the bandwidth of home property inspectors that are often overwhelmed following a natural disaster. Mortgagees remain responsible for ensuring a subject property is eligible for FHA insurance.

FHA strongly believes that the removal of these requirements will strengthen the housing market, reduce unnecessary regulations, increase America’s affordable housing supply, reduce financing costs, and save taxpayer dollars by creating a more efficient FHA lending process.

The provisions of these MLs are effective immediately and will be incorporated into a future version of the FHA’s Single Family Housing Policy Handbook 4000.1.

Mortgagees and other interested parties are encouraged to review these MLs and contact the FHA Resource Center (referenced below) with any questions.

For more information, read today’s press release.

FHA INFO 2025-29 - FHA Seeks Public Input to Better Understand the Implications of Buy Now, Pay Later Lending on Housing Affordability and Stability

June 24, 2025 - Today, the Federal Housing Administration (FHA) published a Request for Information Regarding Buy Now Pay Later Unsecured Debt (Docket No. FR-6547-N01) in the Federal Register.

FHA is committed to its goal of modernizing the way it does business, promoting responsible and sustainable homeownership, and providing sound lending practices to achieve long-term economic stability and a healthy housing market. Consistent with these goals, FHA is looking to its business partners to better understand how the increased prevalence of Buy Now, Pay Later (BNPL) consumer loans may impact the industry’s ability to fully evaluate borrowers’ overall financial profiles and their capacity for long-term homeownership.

The Request for Information (RFI) seeks input to better understand how BNPL obligations may affect lenders’ ability to accurately assess risk and the impact of BNPL lending on housing affordability, which will inform whether policy changes are needed to preserve sound underwriting standards.

FHA welcomes all comments relevant to BNPL loans and their impact on housing stability; however, we are particularly interested in receiving input on the following topics referenced in the RFI:

• BNPL use and FHA borrower risk profiles;
• BNPL impact on financial health and housing stability;
• Visibility in mortgage underwriting;
• Eligibility for FHA programs;
• Data and research needs; and
• FHA policy recommendations.

Interested stakeholders are encouraged to review and provide comments following the methods outlined in the RFI through August 25, 2025.

Refer to the RFI for additional information and details.

FHA INFO 2025-28 - FHA Further Modernizes Default Servicing by Streamlining Engagement with Borrowers in Default and Clarifying Requirements for Future Loss Mitigation

June 3, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-14, Updates to Modernization of Engagement with Borrowers in Default and Loss Mitigation. This ML revises and streamlines policy established in ML 2024-24, Modernization of Engagement with Borrowers in Default, published on December 4, 2024, and provides clarifications to ML 2025-12,Tightening and Expediting Implementation of the New Permanent Loss Mitigation Options, published on April 15, 2025.

With the implementation of the provisions in ML 2025-14, FHA is further aligning its borrower engagement policies with the Trump Administration’s goals of reducing unnecessary regulatory and financial burdens on the industry and fostering long-term economic stability and viability for all Americans. These targeted policy updates expand the options available for mortgagees to reasonably engage with borrowers in default and are designed to help them achieve significant savings when compared to the considerable operational costs of fully implementing ML 2024-24 and ML 2025-12.

Today’s ML 2025-14:

• Updates the requirements for a reasonable effort to arrange an interview with borrowers in default;
• Removes unnecessarily burdensome requirements associated with the interview with borrowers in default;
• Clarifies the transition to the new home retention options for borrowers who are currently required to complete a trial payment plan (TPP);
• Updates the requirement for borrowers in imminent default to complete a four-month TPP; and
• Updates the disaster forbearance requirements.

See ML 2025-14 for the full scope of the changes. The provisions in Attachment 1 of this ML may be implemented immediately but must be implemented no later than July 1, 2025. The provisions in Attachment 2 must be implemented on October 1, 2025.

Additionally, the updated Single Family Default Monitoring System (SFDMS) Reporting Codes and Reporting Elements is available on the supplemental documents webpage

All updates will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1

FHA INFO 2025-24 - FHA Single Family Housing Deactivates Nearly 600 Mortgagee Letters to Improve Clarity for Business Partners

May 13, 2025 - The Federal Housing Administration’s (FHA) Office of Single Family Housing (OSFH) is announcing that it has officially archived nearly 600 policy documents that are no longer active, and whose web location and availability have caused confusion and challenges for lenders and others trying to obtain accurate FHA Single Family policy information. This effort supports the Trump Administration’s goal of increasing government efficiency.

This streamlining effort follows a recently completed review of Single Family policy artifacts posted on HUD’s Client Information Policy System (HUDCLIPS) webpages. Some Mortgagee Letters (MLs) - including several dating back to 1978 - were still listed in the Single Family online active policy directory. These MLs were expired and/or superseded by the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) or other policy documents but not moved to the archives for various reasons.

With that review completed, those MLs have been archived in the inactive or superseded MLs webpages on HUDCLIPS.

Today’s artificial intelligence (AI) tools are more efficient at locating and extracting information from vast sources of web content, including information from HUD’s active ML policy directory and its Handbook 4000.1. This streamlining effort will help improve the accuracy of information received from manual and AI-generated web searches about FHA Single Family policy, programs, and technology modernization efforts.

FHA INFO 2025-23 - FHA Implements Mandatory Phishing Resistant Multi-Factor Authentication

May 1, 2025 - The Federal Housing Administration (FHA) has implemented a new phishing-resistant multi-factor authentication (MFA) for its FHA Connection (FHAC) system. Users must implement the phishing-resistant MFA before July 28, 2025, to be able to continue accessing FHAC.

Phishing scams are cybercrimes which are intended to gain access to online accounts or install malware to damage or steal data from a computer or network. It can take many forms, like emails, text messages, phone calls and social media posts. These messages often contain links to bogus websites but are instead designed to steal your personal and/or business information.

This new phishing-resistant MFA security feature is part of FHA’s ongoing commitment to maintaining secure lender, borrower, and stakeholder data while advancing identity management and access control capabilities. This enhancement also helps ensure that login credentials are not shared or exposed to attacks.

The phishing-resistant MFA is available now to all FHAC users and becomes mandatory beginning July 28, 2025. It is recommended that users set up and begin using this enhanced security feature as soon as possible. Users who do not implement this new security feature by July 28th will not be able to access FHAC. This requirement does not impact users who connect to FHAC through the Business-to-Government interface.

FHAC users have two options for setting up the phishing-resistant MFA: 1) OKTA FastPass Installation (recommended), and 2) FIDO2 Installation. Details are provided in the instructions below. Installation assistance from your IT group may be required.

If you have questions about FHA’s new FHAC phishing-resistant MFA, contact the FHA Resource Center for more information.

Instructions for Phishing-Resistant MFA OKTA FASTPASS and FID02 Installation

I - STEPS FOR OKTA FASTPASS INSTALLATION (Recommended):

1. Download OKTA Verify to your workstation. Several options are below:
   • The installation routine for Windows can be found at: https://apps.hud.gov/pub/chums/OktaVerifySetup-5.1.3.0-4b0cd42.exe
   • The installation routine for MAC OS can be found in the MAC App Store.
   • The installation routine for iOS can be found in the Apple App Store.
   • The installation routine for Android can be found in Google Play.
2. Run the installer, select the checkbox to agree to the License terms and conditions and then click the Install button.
3. Once the installation is complete, click the Finish button.
4. From the Windows Start menu, open OKTA Verify.
5. Click Get Started.
6. Select Next at "How it works" screen.
7. In New Account, enter “production-icam-hud.okta.com” and choose Next.
8. Log into OKTA with your user ID, password, and code. Set OKTA Fast Pass as your default in the new OKTA Verify browser.

You are now set up with OKTA Fast Pass. Next, take the following steps:

1. Log into FHA Connection.
2. Sign in using OKTA FastPass.
3. OKTA Verify will ask you if you are trying to sign in.
4. Select "Yes, it's me".
5. You have now successfully entered FHA Connection using Phishing Resistant MFA (OKTA FastPass).

II - STEPS FOR FIDO2 AUTHENTICATION FACTOR INSTALLATION WITHIN THE OKTA PORTAL (Requires Windows Hello or MAC/Linux equivalent):

1. Go to the FHA Connection home page (https://entp.hud.gov/clas/index.cfm) and click OKTA Setup.
2. Log into OKTA using the same user ID/Password/Factor used when logging into FHA Connection.
3. Click on your name at the top left corner of the screen and then select “Settings” (located on right side of the screen).
4. Once in Settings select Set Up for “Security Key or Biometric Authenticator”.
5. Following Set Up selection you will be prompted to log into FHA Connection.
6. Once you log in, you will be prompted to enter your FIDO2 PIN. This will have been established when you set up FIDO2 on your workstation.
7. You have now successfully entered FHA Connection using Phishing Resistant MFA (FIDO2).

Please note you will need to allow FIDO2, an industry standard, to be turned on to your workstation. The Windows implementation of FIDO2 is Windows Hello. MAC and Linux also have implementations of FIDO2. If you choose FIDO2, your organization will be responsible for any configuration changes to your workstation to allow FIDO2.

FHA INFO 2025-22 - FHA Expands Access to Foreclosed Property Sales to All Buyers

April 28, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-13, Updates to Claims without Conveyance of Title (CWCOT) Post-Foreclosure Sales Period and HUD Real Estate-Owned Properties (REO) Exclusive Listing Period. This ML rescinds policies established in MLs 2022-01 and 2022-08, dated January 13, 2022, and May 5, 2022, respectively, which were later incorporated into FHA’s Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). Specifically, FHA is:

• Removing the exclusive 30-day sales period for owner-occupants, HUD-approved nonprofits, and government entities as part of the CWCOT post-foreclosure sale process; and
• Reverting the exclusive listing period on the HUD HomeStore website for REO properties from 30 days to the previous exclusive listing period of 15 days for owner-occupants, HUD-approved nonprofits, and government entities.

Removing these requirements aligns with the Trump Administration’s goals of reducing unnecessary burdens and saving taxpayer funds. FHA’s evaluation of these policies has revealed the efforts were generally not successful in meeting their intended goals. Instead, they have delayed sales of foreclosed properties, increased the deterioration of these properties leading to lower sales prices, and increased costs for the Department of Housing and Urban Development (HUD).

Additionally, the Single Family Default Monitoring System (SFDMS) Reporting Codes and Reporting Elements was updated and is available on the supplemental documents webpage.

FHA systems will be updated concurrently with the effective date of the ML.

These provisions will also be incorporated into a future version of Handbook 4000.1.

Mortgagees and other interested parties are encouraged to review ML 2025-13 and contact the FHA Resource Center with any questions.

FHA INFO 2025-21 - FHA Ends the Biden-era COVID-19 Loss Mitigation Waterfall

April 15, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-12, Tightening and Expediting Implementation of the New Permanent Loss Mitigation Options, which modifies and replaces certain provisions in ML 2025-06, Updates to Servicing Loss Mitigation, and Claims, published January 16, 2025, and provides revised and updated loss mitigation guidance.

Through ML 2025-12, the Trump Administration is definitively announcing the end of the relaxed COVID-19 era loss mitigation waterfall administered in FHA’s Single Family Housing program. Additionally, the Administration is announcing that it will continue its review of the entire FHA permanent loss mitigation waterfall to ensure the policy protects taxpayers while mitigating financial risks to the Mutual Mortgage Insurance Fund (MMIF).

The Department of Housing and Urban Development (HUD) will be conducting an overall evaluation of the Payment Supplement tool as well - including an assessment of its performance and function - to determine if it should remain a part of HUD’s loss mitigation program.

Many of the emergency loss mitigation policies implemented by FHA at the onset of the COVID-19 National Emergency - which were intended to be temporary - have instead been extended for years and remain in place today.

FHA’s prior failure to definitively sunset the COVID-19 emergency loss mitigation “waterfall” has increased risk in the MMIF, hurt taxpayers, set up many FHA borrowers for failure, and enabled other FHA borrowers to abuse the current process.

To address the elevated taxpayer risk to the MMIF and improve borrower outcomes, the FHA, through today's ML, is limiting borrower eligibility for receipt of any permanent home retention loss mitigation option to once every 24 months. This important safeguard aligns with the FHA-HAMP standard and represents a return to the prudent risk management approach FHA observed prior to the outbreak of COVID-19.

Highlights of ML 2025-12 include:

• Permanently sunsetting the COVID-19 Loss Mitigation Options on September 30, 2025;
• Moving up the effective date of the new permanent loss mitigation options to October 1, 2025 from February 2, 2026;
• Continuing the suspension of FHA-HAMP and sunsetting the program effective September 30, 2025;
• Extending the time on the eligibility of a borrower for a subsequent permanent loss mitigation option to once every 24 months, from once every 18 months; and
• Canceling the scheduled increases in borrower compensation under FHA’s Pre-foreclosure Sale Program, Deed-in-Lieu of Foreclosure disposition options, and Cash for Keys incentives, maintaining the current amounts.

The Single Family Default Monitoring System (SFDMS) Reporting Codes and Reporting Elements, and the FHA Single Family Housing Claim Filing Technical Guide (Claim Filing Guide) are available on the supplemental documents webpage, with the following effective dates:

• the updates to the SFDMS Delinquency/Default Status (DDS) Codes, Delinquency/Default Reason (DDR) Codes, and Occupancy Status Codes will be effective October 1, 2025;
• the updates to the SFDMS Default Reporting Elements will be effective February 2, 2026; and
• updates to the Claim Filing Guide will be effective October 1, 2025.

FHA systems will be updated concurrently with the effective date of the ML.

Mortgagees and other stakeholders in FHA transactions are encouraged to review today’s ML 2025-12 and contact the FHA Resource Center with questions.

FHA INFO 2025-20 - FHA Further Extends Foreclosure Moratoriums for Borrowers Impacted by Hurricanes Helene and Milton

April 8, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-10, Second Extension of the Foreclosure Moratoriums in Connection with Hurricanes Helene and Milton. This ML further extends the foreclosure moratoriums for areas impacted by Hurricanes Helene and Milton through July 10, 2025.

This second extension provides homeowners with FHA-insured mortgages in Presidentially-Declared Major Disaster Areas (PDMDAs) additional time to access federal, state, or local housing resources; consult with HUD-approved housing counselors; and/or rebuild their homes. FHA believes that further extending the foreclosure moratoriums is warranted due to the devastation caused by Hurricanes Helene and Milton, the extensive property damage sustained, and the reduced capacity for those impacted to access needed resources. Many areas in Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia were deemed PDMDAs because of Hurricanes Helene and Milton.

Borrowers with FHA-insured mortgages located in Hurricanes Helen and Milton PDMDAs should contact their mortgage or loan servicer immediately for assistance.

Borrowers can also obtain additional assistance in the following ways:

• Review disaster recovery resources from HUD and other Federal and state agencies available on HUD’s Disaster Resources web page or contact the FHA Resource Center referenced below to learn more about disaster relief options.
• Contact a HUD-approved housing counseling agency. These agencies have counselors available to assist those impacted by natural disasters in determining assistance needs and identifying available resources. Homeowners can find a HUD-approved housing counseling agency online or use HUD’s telephone look-up tool by calling (800) 569-4287. There is never a fee for foreclosure prevention counseling.
• For borrowers and renters whose homes are destroyed or damaged to an extent that requires reconstruction or complete replacement, contact an FHA-approved lender about FHA’s Section 203(h) program. This program provides 100 percent financing for eligible homeowners to rebuild their home or purchase a new one.
• For borrowers seeking to purchase and/or repair a home that has been damaged, contact an FHA-approved lender about FHA's Section 203(k) loan program. This program allows individuals to finance the purchase or refinance of a property, as well as the costs of repair or renovation, through a single mortgage.

The provisions of ML 2025-10 apply to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (HECM) programs.

Mortgagees and other interested parties are encouraged to review ML 2025-10 and contact the FHA Resource Center (referenced below) if they have questions.

FHA INFO 2025-18 - FHA Issues Disaster-Related Policy Waiver for Early Payment Default Quality Control Review Requirements

April 1, 2025 - Today, the Federal Housing Administration (FHA) issued a limited waiver of its policy regarding Early Payment Default (EPD) review requirements found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Sections V.A.3.a.i.(C) and V.A.3.a.iv.(B)(2). This waiver applies to FHA-insured mortgages located in the Presidentially-Declared Major Disaster Area (PDMDA) for the recent California Wildfires.

FHA policy requires that mortgagees select all EPDs for review each month and perform a quality control review to ensure compliance with FHA Single Family origination and underwriting requirements. FHA is waiving the requirement for mortgagees to conduct certain quality control reviews on EPDs in this disaster area because it believes EPDs on loans closed prior to the disaster could most likely be a result of unforeseen circumstances associated with the disaster, such as loss of employment and/or income, property damage and repairs, forced relocation, and other contributing factors.

The current policy is being waived for FHA-insured mortgages that:

• are in the PDMDA for California Wildfires and Straight-Line Winds (DR-4856-CA),
• have a mortgage closing date before the Incident Period start date of January 7, 2025, and
• become EPDs between February 1, 2025, and July 31, 2025.

Mortgagees must continue to provide borrowers in the affected areas with appropriate FHA Loss Mitigation options, report delinquencies in the Single Family Default Monitoring System (SFDMS), and meet all other servicing and loss mitigation requirements in Section III of Handbook 4000.1.

Mortgagees and other interested parties are encouraged to review the waiver and contact the FHA Resource Center (referenced below) if they have questions.

FHA INFO 2025-15 - FHA Rescinds Multiple Appraisal Related Policies

March 19, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-08, Rescinding Multiple Appraisal Policy Related Mortgagee Letters, to immediately rescind the policy guidance published in the following MLs:

• ML 2024-16, Extension to the Effective Date of Appraisal Review and Reconsideration of Value (ROV) Updates, dated August 6, 2024;
• ML 2024-07, Appraisal Review and Reconsideration of Value, dated May 1, 2024; and
• ML 2021-27, Appraisal Fair Housing Compliance and Updated General Appraiser Requirements, dated November 17, 2021.

The provisions of this ML are effective immediately and will be incorporated into a future version of Handbook 4000.1.

Additionally, all other prior supporting communications related to the three rescinded MLs — such as FHA INFOs and training — have been removed from hud.gov.

Stakeholders are encouraged to thoroughly review these revisions and contact the FHA Resource Center with questions.

FHA INFO 2025-12 - FHA Extends Foreclosure Moratorium for Borrowers Impacted by Los Angeles County, California Wildfires

March 6, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-07, Extension of the Foreclosure Moratorium in Connection with Presidentially-Declared Major Disaster Areas in Los Angeles County, California. FHA is extending the automatic foreclosure moratorium that was set to expire on April 8, 2025, by 90 days. The moratorium will now remain in effect through July 7, 2025. The provisions of ML 2025-07 apply to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (HECM) programs.

This extension provides homeowners with FHA-insured mortgages in the Los Angeles County Presidentially-Declared Major Disaster Areas (PDMDAs) additional time to access federal, state, or local housing resources; consult with HUD-certified housing counselors; and/or rebuild their homes. FHA believes this foreclosure moratorium extension is warranted due to the significant economic and property damage across the county. Mortgagees are required to implement this policy immediately.

Borrowers with FHA-insured single family mortgages located in the Los Angeles County PDMDAs should contact their mortgage or loan servicer immediately for assistance.
Borrowers can also obtain additional assistance in the following ways:

• Review disaster recovery resources from HUD and other Federal and state agencies available on HUD’s Disaster Resources web page or contact the FHA Resource Center to learn more about disaster relief options.
• Contact a HUD-approved housing counseling agency. These agencies have counselors available to assist those impacted by natural disasters in determining assistance needs and identifying available resources. Homeowners can find a HUD- approved housing counseling agency online or use HUD’s telephone look-up tool by calling (800) 569-4287. There is never a fee for foreclosure prevention counseling.
• For borrowers whose homes are destroyed or damaged to an extent that requires reconstruction or complete replacement, contact an FHA-approved lender about FHA’s Section 203(h) program. This program provides 100 percent financing for eligible homeowners to rebuild their home or purchase a new one.
• For borrowers seeking to purchase and/or repair a home that has been damaged, contact an FHA-approved lender about FHA's Section 203(k) loan program. This program allows individuals to finance the purchase or refinance of a house, as well as the costs of repair or renovation, through a single mortgage.

Mortgagees and other interested parties are encouraged to review ML 2025-07 and contact the FHA Resource Center with questions.

For more information, read today's press release.

FHA INFO 2025-10 - FHA Issues Waivers of its New Construction Flood Elevation Requirements Amended in its Minimum Property Standards

February 21, 2025 - Consistent with President Trump’s January 20, 2025, Executive Order: Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis, which includes pursuing appropriate actions to lower the cost of housing and expand the housing supply, today the Federal Housing Administration (FHA) issued a temporary partial regulatory waiver and related Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) waiver to its minimum property standards (MPS) requirements. Without this partial waiver, the new MPS required elevation standard would have limited the land available for development and increased the cost of construction for FHA-insured single family properties, thereby contributing to the insufficient supply of new construction housing and rising home prices.

Specifically, FHA program participants should note:

• The partial regulatory waiver is limited to HUD MPS guidance at 24 CFR § 200.926d(c)(4), Drainage and flood hazard exposure, which addresses new construction flood elevation requirements for residential structures under HUD’s mortgage insurance programs; and
• The Handbook 4000.1 wavier applies to the eligibility criteria for New Construction in Sections II.A.1.b.iv(A)(1)(b) and II.B.2.b.iii(A)(4)(b).

Interested stakeholders should review these waivers and contact the FHA Resource Center with questions.

FHA INFO 2025-09 - Federal Housing Administration Single Family Programs Remain Operational

January 28, 2025 - The U.S. Department of Housing and Urban Development (HUD) has confirmed with the Office of Management and Budget (OMB) that all Federal Housing Administration (FHA) Single Family Title I and Title II mortgage insurance programs remain operational and are not subject to the pause in federal grants and loans outlined in OMB’s memo to federal agencies today.

FHA INFO 2025-08 - FHA Announces Updated Loss Mitigation Options to Assist Homeowners at Risk of Foreclosure Keep Their Homes

January 16, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-06, Updates to Servicing, Loss Mitigation, and Claims, and Appendix 4.0 of its Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). FHA is also updating its Single Family Default Monitoring System (SFDMS) Reporting Codes and Reporting Data Elements and Claim Filing Technical Guide supplemental documents.

The revisions announced today include updates to FHA’s permanent loss mitigation options based on learnings from its temporary COVID-19 policies and feedback received on the draft policies posted on the Single Family Housing Drafting Table and announced via FHA INFO 2024-81, dated November 25, 2024.

Today’s ML also extends existing COVID-19 Recovery Options to February 1, 2026, giving stakeholders time to implement the new loss mitigation, claims, and reporting requirements.

The provisions in this ML include, but are not limited to:

• Updates FHA’s repayment plan and forbearance policies;
• Changes to FHA’s Home Retention Options:
  • For borrowers who can resume their previous monthly payments:
    • Mortgagees would offer a standalone partial claim or a 30-year standalone loan modification for borrowers who can receive a payment reduction;
  • For borrowers who cannot afford their existing monthly payments:
    • Mortgagees would continue to target a 25 percent reduction in the monthly principal and interest (P&I) payment by evaluating the borrower for home retention options in the following order:
      • 30- or 40-year standalone loan modification;
      • 30- or 40-year combination loan modification and partial claim; or
      • If the borrower cannot obtain at least 15 percent P&I reduction from a modification, Payment Supplement, which provides a temporary three-year reduction in monthly payments.
    • Revises FHA’s loan modification for unresponsive borrowers (the Outside of the Waterfall Loan Modification (OWL));
    • Updates the allowable loan modification interest rate pricing;
    • Updates FHA’s Presidentially-Declared Major Disaster Area policies; and
    • Adds guardrails to mitigate the risk of redefault and ensure that borrowers receive the most appropriate loss mitigation option, including:
      • Requiring that the borrower has made at least four loan payments;
      • Borrower attesting that the home retention option is affordable;
      • Borrower successfully completing a three-month trial payment plan (TPP) before receiving a home retention option;
      • Providing one additional retention attempt for borrowers who attested they could resume their previous monthly payment or received an OWL and failed a TPP if the option reduces their monthly payments from the failed TPP; and
      • Limiting borrowers to one executed home retention option in an 18-month period.
• Changes to FHA’s Home Disposition Options:
  • Streamlines Pre-foreclosure Sale and Deed-In-Lieu requirements;
  • Increases monetary incentives for borrowers to avoid foreclosure through completing a pre-foreclosure sale or deed-in-lieu and, post-foreclosure, for occupants to avoid an eviction.
• Updates to Appendix 4.0, which provides mortgagees with calculations for the home retention options.
• Updates and consolidates SFDMS reporting.
• Updates the claims requirements to match the new loss mitigation options.

The provisions of this ML are effective February 2, 2026. These policy updates will be incorporated into a future version on the Handbook 4000.1. Mortgagees and other stakeholders interested in FHA policies are encouraged to thoroughly review the Servicing and Loss Mitigation, and Claims and Disposition sections, Appendix 4.0 of Handbook 4000.1 and the SFDMS Reporting Codes and Claim Filing Technical Guide supplemental documents and forward any questions to the FHA Resource Center.

The draft policy posted on the Single Family Drafting Table originally included the addition of the Equity Saver Sale (ESS). After careful consideration of feedback from stakeholders, the ESS is not included in this final ML. FHA believes the ESS would be a valuable tool as it is intended to provide borrowers with a marketing period prior to foreclosure to complete a voluntary sale and retain net equity proceeds. FHA is particularly interested in receiving feedback on this topic for future consideration. Interested stakeholders are encouraged to thoroughly review the draft ESS and provide their feedback through March 17, 2025, using the feedback instructions posted on the Drafting Table. FHA will carefully consider all feedback received before publishing a final ML.

If FHA’s systems development will be completed in advance of February 2, 2026, FHA may issue a new ML to announce that mortgagees may elect to implement the provisions in this ML prior to February 2, 2026.

For more information, read today’s press release.

FHA INFO 2025-07 - Reminder Guidance for FHA-Approved Mortgagees Regarding Presidentially Declared Major Disaster Areas

January 15, 2025 - In the wake of the devastation caused by the California wildfires, the Federal Housing Administration (FHA) reminds mortgagees about its guidance for servicing and/or originating FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations within the U.S. and its territories where the President has declared a major disaster under the Stafford Act. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond.

This guidance serves as a reminder that applies to all Presidentially-Declared Major Disaster Areas (PDMDAs), which can be found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), unless communicated otherwise through waivers or mortgagee letters.

Loan Servicing and Loss Mitigation

Forward Mortgages

• FHA-insured forward mortgages secured by properties in PDMDAs are subject to a 90-day foreclosure moratorium following the disaster declaration.
• The mortgagee may offer forbearance relief to borrowers with a mortgaged property or place of employment located within a PDMDA as follows:
  • Informal forbearance for borrowers in PDMDAs. The mortgagee may consider borrowers in PDMDAs for an informal forbearance and may offer additional informal forbearance periods if the foreclosure moratorium is extended, as mentioned below.
  • Formal forbearance for borrowers in PDMDAs. The mortgagee may consider formal forbearances for borrowers in PDMDAs while they are pursuing home repairs and/or resolving verifiable financial difficulties related to the disaster, provided that:
    • The forbearance period does not exceed the estimated time needed to complete the home repairs; and
    • The total accumulated mortgage arrearages during the forbearance period do not exceed the equivalent of 12 months of principal, interest, taxes, and insurance (PITI).
• For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Handbook 4000.1 Section III.A.2.n.iii, Monitoring of Repairs to Substantially Damaged Homes.

Mortgagees are encouraged to review the servicing guidance in Section III.A.2.n of Handbook 4000.1 as it relates to servicing mortgages in PDMDAs.

Mortgagees are reminded to contact affected borrowers who may require loss mitigation assistance as soon as possible post-disaster. FHA also encourages mortgagees to use any permissible means to contact borrowers to provide them with needed forbearance relief.

Because of the extensive destruction in connection with the California wildfires and disruption to modes of communication, mortgagees may offer and provide the forbearance unless the borrower affirmatively declines the offer.

Home Equity Conversion Mortgages

• In PDMDAs, FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure moratorium expiration date to commence or recommence a foreclosure action.
• HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day extension of HECM foreclosure timelines.

Mortgagees are encouraged to review the servicing guidance outlined in Handbook 4000.1, Section III.B.3.a, relating to HECMs in PDMDAs.

Mortgage Origination

• Inspection and repair escrow requirements for mortgages pending closing or endorsement:
  • All properties with pending mortgages or endorsements in areas under a PDMDA designated for individual assistance must have a damage inspection report that identifies and quantifies any dwelling damage.
  • The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the property, and the report must be dated after the Incident Period (as defined by the Federal Emergency Management Association) or 14 days from the incident period start date, whichever is earlier.
  • If the effective date of the appraisal is on or after the date required above for an inspection, a separate damage inspection report is not necessary.
  • All damages, regardless of amount, must be repaired by licensed contractors or per local jurisdictional requirements, and the property must be restored to pre-loss condition with appropriate and applicable documentation.

Preparing for longer-term recovery

In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review the following:

• Guidance for FHA’s 203(h) Mortgage Insurance for Disaster Victims in Section II.A.8.b of Handbook 4000.1. The 203(h) program provides mortgage insurance on mortgages used to finance the rehabilitation or reconstruction of an existing home or the purchase of another one for victims who have lost their homes due to a major disaster in a PDMDA.
• Guidance for FHA’s 203(k) Rehabilitation Mortgage Insurance Program in Section II.A.8.a of Handbook 4000.1. The 203(k) program provides mortgage insurance for financing or refinancing of a home, including the cost of repairs or renovation – structural and non-structural.

Mortgagees can obtain more information about FHA’s policies - as well as specific PDMDA related policies - by contacting the FHA Resource Center.

Additional disaster recovery resources from HUD and other Federal and state agencies are available on HUD’s Disaster Resources web page.

FHA INFO 2025-06 - FHA Updates and Streamlines its Nonprofit Approval and Recertification Requirements to Help Expand Program Participation

January 13, 2025 - Today, the Federal Housing Administration (FHA) announces the publication of Mortgagee Letter (ML) 2025-05, Updated Nonprofit Approval and Recertification Procedures. This ML provides updated and revised guidance for nonprofit organizations seeking approval to participate in FHA’s nonprofit programs.

FHA remains committed to extending affordable homeownership opportunities to its core constituency of first-time and low-to-moderate-income homebuyers, including those in underserved communities. The updates in this ML are designed to increase nonprofit organizations’ participation in FHA’s nonprofit programs by expanding the relevant experience requirements and simplifying the application and recertification requirements for nonprofits seeking approval and placement on the FHA Nonprofit Roster. Nonprofits must be approved and placed on the Roster to participate in FHA nonprofit programs that leverage their unique expertise to offer affordable homeownership opportunities for low- and moderate-income individuals and families.

Specifically, this ML:

• expands the relevant experience requirement to potentially qualify more eligible nonprofits;
• streamlines the recertification process so nonprofits are not required to submit a complete application for recertification. Only information that has changed during the approval period is required;
• revises the calculation for the Net Development Costs (NDC);
• updates requirements to allow nonprofits to submit one narrative describing their affordable housing program plan (AHPP) – instead on submitting an AHPP for each individual program they are applying for; and
• offers nonprofits the use of optional model documents to submit information and streamline recertification through a checklist.

New flexibility in FHA’s requirements for approval and recertification of nonprofits will make it easier for these organizations to become eligible to participate in the following three FHA nonprofit programs:

1. Secondary Financing: allows nonprofits and government entities to provide secondary financing assistance to homebuyers using FHA insurance on a first mortgage when the downpayment assistance is secured with a second mortgage or lien.
2. FHA Mortgagor: allows nonprofits and government entities to be eligible for certain FHA-insured mortgage programs under the same provisions as owner occupant borrowers.
3. HUD Homes: allows nonprofits and government entities to purchase HUD-owned homes listed on the HUD HomeStore website at a discount and during the exclusive listing period reserved for owner-occupant, non-profit, and government entity purchasers.

This guidance may be implemented immediately but must be implemented no later than July 14, 2025.

All updates in this ML will be incorporated into a forthcoming update of the Single Family Housing Policy Handbook 4000.1.

Resources

• New model documents are available on the Single Family Model Documents web page.
• Nonprofit Organizations and Governmental Entities webpages will be updated concurrently with the effective date of the ML.
• FHA subject matter experts will host a stakeholder briefing webinar soon. Details will be communicated in a future FHA INFO.

• • •

HUD-approved and prospective non-profit organizations and other interested parties are encouraged to thoroughly review ML 2025-05 and contact the FHA Resource Center with questions.

FHA INFO 2025-05 - FHA Announces New Policy that Provides Greater Flexibility for Borrowers Using Income Received from Individuals Renting Space Inside Their Homes

January 13, 2025 - Today, the Federal Housing Administration (FHA) announces the publication of Mortgagee Letter (ML) 2025-04, Revisions to Policies for Rental Income from Boarders of the Subject Property and a stakeholder briefing webinar. This ML takes into consideration stakeholder feedback received on the draft ML announced in FHA INFO 2024-79, dated November 20, 2024.

The provisions announced in this ML create greater flexibilities for borrowers using income received from individuals who rent space in borrowers’ homes - referred to as boarders in Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) - to qualify for an FHA insured mortgage. These new flexibilities include revisions to the required underwriting standards for documenting and calculating this type of income.

FHA remains committed to extending affordable housing opportunities to its core constituency of first-time and low-to-moderate-income homebuyers, including those in underserved communities. In doing so, it recognizes that rental income received from individuals renting space in borrowers’ homes is a stable and viable source of income that increases housing affordability and allows borrowers to better manage housing costs.

This new underwriting guidance:

• Expands the types of acceptable income verification documentation for individuals renting space inside the home to include bank statements, canceled checks, and/or deposit slips showing rental payments received;
• Establishes that rental income from individuals renting space inside the subject property is permitted whether the borrower is currently a renter or the homeowner;
• Reduces the acceptable rental income history from two years to 12 months from individuals renting space inside the borrower’s home;
• Allows borrowers with a 12-month rental history to qualify for an FHA-insured mortgage using income from renters living in the home, provided the income has been received for at least nine of the most recent 12 months, is currently being received, and is averaged over a 12-month period; and
• Establishes that rental income from individuals renting space inside the home that is used to qualify borrowers for an FHA-insured mortgage cannot exceed 30 percent of their total monthly effective income.

The provisions of this ML may be implemented immediately but must be implemented for FHA case numbers assigned on or after March 14, 2025.and will be incorporated into a future version of Handbook 4000.1.

To further support mortgagees, FHA will host a stakeholder briefing (see details below). A Frequently Asked Questions (FAQ) document that compiles questions received through the stakeholder briefing and FHA Resource Center will be made available on hud.gov and announced in a future FHA INFO.

Mortgagees and other interested parties are encouraged to thoroughly review ML 2025-04 and contact the FHA Resource Center with questions.

Stakeholder Briefing

FHA subject matter experts will host a stakeholder briefing for mortgagees and other interested parties regarding the recently announced, ML 2025-04, Revisions to Policies for Rental Income from Boarders of the Subject Property. Details include:

• Title: Revisions to Policies for Rental Income from Individuals Renting Space Inside the Borrower’s Home
• Date: Wednesday, January 29, 2025
• Time: 2:00 PM–3:30 PM (Eastern)
• Target Audience: Underwriters, loan officers, processors, appraisers, quality control, and other industry professionals.
• Register for the live webinar.

Registrants are invited to pre-submit questions to sffeedback@hud.gov with the subject line: Borrowers Using Income from Individuals Renting Space Inside The Borrower’s Home. The deadline to submit questions is Wednesday, January 22, 2025.

For more information, read today’s press release.

FHA INFO 2025-04 - FHA Publishes Updates to Single Family Housing Policy Handbook 4000.1

January 10, 2025 - Today, the Federal Housing Administration (FHA) published updates to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). This update includes minor policy changes, technical edits, and incorporates previously published policy.

Stakeholders are encouraged to thoroughly review and familiarize themselves with the revisions in Handbook 4000.1. See the Handbook 4000.1 Transmittal for a summary, as updates, changes, effective dates, and other pertinent information is reflected and incorporated. For comparison purposes, a separate redline version has also been posted on the Handbook 4000.1 Information web page. The online version of Handbook 4000.1 is being updated and will be available soon.

Handbook 4000.1 is the comprehensive, authoritative source for policy guidance for industry stakeholders, and provides clear policy and procedure requirements for all FHA Single Family Housing programs. FHA’s Office of Single Family Housing produces regular Handbook 4000.1 updates to ensure it remains the complete, single source document for its latest policies, programs, and processes.

If you have questions regarding this update, contact the FHA Resource Center for more information.

FHA INFO 2025-03 - HUD Adopts Industry Standard Loan Application Form for its Title I Loan Programs

January 9, 2025 - Today, the Federal Housing Administration (FHA) published Title I Letter (TIL) TIL-489, Adoption of the Uniform Residential Loan Application (URLA) for Title I Loan Programs. This TIL incorporates stakeholder feedback received on the draft TIL originally posted on the FHA Office of Single Family Housing Drafting Table announced in FHA INFO 2024-78, dated November 18, 2024.

Currently, Title I loans require program-specific loan application forms for each of its two programs: forms HUD-56001 for Title I Property Improvement and HUD-56001-MH for Title I Manufactured Home loans. TIL-489 announces the replacement of both of these forms with the industry standard loan application, Uniform Residential Loan Application (URLA) (Fannie Mae Form 1003/Freddie Mac Form 65), and the new HUD Addendum to the Uniform Residential Loan Application for Title I Loans (form HUD-92900-TI).

By adopting the commonly used industry standard URLA, HUD is simplifying its Title I loan application process. This enables lenders to use existing origination system technology to collect borrower data, which eliminates the financial burden of acquiring multiple software licenses or manually completing a Title I program-specific application form. FHA believes these changes will encourage greater lender participation in its Title I program.

The provisions of this TIL may be implemented immediately but must be implemented for case numbers assigned on or after May 8, 2025. The provisions of this TIL will be incorporated into a future version of Single Family Housing Policy Handbook 4000.1.

Mortgagees and other interested parties are encouraged to review the TIL-489 and contact the FHA Resource Center if they have questions.

FHA INFO 2025-02 - HUD Seeks Further Feedback on Updated Requirements for Partial Claim Recording Timeframes and Payoff

January 9, 2025 - Today, the Federal Housing Administration (FHA) posted an updated draft of its Partial Claim Document Recording and Payoff Statements Mortgagee Letter (ML) on the FHA’s Office of Single Family Housing Drafting Table (Drafting Table) for review and feedback. The payoff statement section in today’s version of the draft ML has been revised based on feedback received since its initial Drafting Table posting originally announced in FHA INFO 2024-64 on September 12, 2024.

FHA’s intent with this draft remains the same: that borrowers, closing agents, attorneys, and title agents are aware of the partial claim subordinate lien amount owed on the mortgage loan, ensuring that the partial claim payoff is provided to the party requesting the payoff statement for the FHA-insured first mortgage. FHA believes this will help minimize losses to its Mutual Mortgage Insurance Fund (MMIF) and prevent potential challenges related to the subordinate lien for those refinancing their mortgage or selling their home. Additionally, this draft policy proposes to partially alleviate an operational burden on mortgagees by increasing the time allowed to record a partial claim.

This draft ML also proposes to:

• Extend the time allowed for mortgagees to record partial claim security instruments from five to 15 days from:
  • the date of receipt from the borrower; or
  • bankruptcy court approval, if required; or
  • where HUD execution is required, receipt from HUD.
• Establish a new procedure when the mortgagee receives a payoff request for an FHA insured mortgage and there are outstanding partial claims or payment supplements associated with the mortgage.

Interested stakeholders are encouraged to thoroughly review this draft ML and provide their feedback through March 10, 2025, using the feedback instructions posted on the Drafting Table. FHA will carefully consider all feedback received before publishing a final ML.

As a reminder, this draft is not official departmental policy and cannot be used in connection with any FHA-insured mortgage until finalized. FHA’s existing policies remain in effect until amended.

FHA INFO 2025-01 - FHA Defect Taxonomy Updated to Include Servicing Loan Reviews

January 7, 2025 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-01, Federal Housing Administration (FHA) Defect Taxonomy Updates for Servicing Loan Reviews. This ML updates the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Appendix 8.0 – FHA Defect Taxonomy (Defect Taxonomy) with revised introductory sections and new content focused on Title II servicing loan reviews.

FHA’s Defect Taxonomy is the agency’s method for identifying loan-level defects and is used to categorize FHA policy violations and corresponding remedies, which are then communicated to mortgagees through the Loan Review System. FHA’s current defect taxonomy includes guidance applicable only to Title II underwriting loan reviews. FHA’s Office of Single Family Housing also conducts servicing loan reviews; however, its method of identifying servicing defects has never been published other than in draft form.

With this ML, FHA is addressing this transparency gap by adding servicing loan reviews and aligning the defect taxonomy with the requirements in Handbook 4000.1, Section III – Servicing and Loss Mitigation.

The updated Defect Taxonomy includes:

• Six defect areas covering FHA requirements through the servicing lifecycle;
• Severity tier descriptions with common characteristics and distinctions based on the practical impact of non-compliance;
• Expanded, servicing-specific remedies aligned with severity tiers for each defect area.
• Revised introductory sections that apply to both underwriting and servicing reviews.

The addition of servicing-specific guidance to the Defect Taxonomy will provide greater clarity and transparency into FHA’s servicing loan review process. New introductory language will increase awareness of FHA’s use of indemnifications and other remedies for all review types. Pursuit of such loan-level actions and remedies does not limit FHA’s ability to refer a mortgagee to the Mortgagee Review Board (MRB) or prevent the MRB from initiating its own action where appropriate.

Today’s ML 2025-01 incorporates feedback received on the draft ML that was posted on the Single Family Drafting Table and announced in FHA INFO 2021-92, dated October 28, 2021. A revised version of the draft ML was later posted for stakeholder feedback on July 10, 2024, via FHA INFO 2024-45.

The provisions of this ML are effective for Title II loan reviews as of January 15, 2025, and will be incorporated into a future version of the Handbook 4000.1. 

Mortgagees and other interested parties are encouraged to review ML 2025-01 and contact the FHA Resource Center if they have questions.

FHA INFO 2024-90 - FHA Seeks Feedback on the Proposed Establishment of the Optional Reimbursement Claim Alternative Mortgagee Letter

December 19, 2024 - Today, the Federal Housing Administration (FHA) posted the draft, Establishment of the Optional Reimbursement Claim Alternative (ORCA) Mortgagee Letter (ML) on its Single Family Housing Drafting Table (Drafting Table) for review and feedback. If finalized, this policy would allow mortgagees to seek reimbursement for costs associated with their advances for taxes and insurance on defaulted FHA-insured Single Family Title II forward mortgages after the borrower’s escrow has been exhausted but before the final claim payment is made. This draft ORCA policy is intended to support lender liquidity.

Currently, mortgagees incur significant upfront expenses between default and final resolution when advancing tax and insurance payments on defaulted mortgages. Receiving reimbursement of tax and insurance advances earlier in the process may help alleviate some of the financial burden of costs that mortgagees incur while servicing FHA-insured mortgages during the default and foreclosure processes.

Please note that if FHA finalizes this policy, it will take significant time to implement, as FHA will need to update its claims system.

Interested stakeholders are encouraged to thoroughly review the draft ML and provide feedback through March 3, 2025. Instructions for viewing and providing feedback on the draft ML are available on the Drafting Table. FHA will carefully consider all feedback received before publishing a final ML.

As a reminder, this draft ML is not official departmental policy and cannot be used in connection with any FHA-insured mortgage. FHA’s existing policies remain in effect until amended.

FHA INFO 2024-89 - New FHA Catalyst Enhancements Announced Today

December 16, 2024 - As part of its ongoing technology modernization effort, the Federal Housing Administration (FHA) is announcing the following enhancements to its Single Family FHA Catalyst technology, available today.

FHA Catalyst Mortgagee Administrator Role Improvements

FHA has implemented new Mortgagee Administrator functionalities that allow for better management of case binder submissions for pre-endorsement reviews. Details of these revised functionalities can be found on the FHA Catalyst: User Access Management webpage, which includes the updated FHA Catalyst Mortgagee Administrator Role User Guide.

To support FHA Catalyst Mortgagee Administrators, FHA has made available a series of training videos consisting of six “how-to” tutorials for Mortgagee Administrators on the following topics:

• Creating a User
• Resetting a Password
• Accessing a User Roster Report
• Reactivating a User
• Freezing/Unfreezing a User
• Transferring a Case Servicing Binder

The tutorials can be accessed on the FHA Catalyst User Access Management webpage on hud.gov.

FHA Catalyst Servicing Binder Submission Capabilities

The FHA Catalyst: Case Binder Module can now accept servicing binders from FHA-approved servicers when requested by FHA for various servicing oversight and monitoring reviews. This new capability provides a streamlined process for the submission of servicing binders to FHA. Servicers will receive an email notification with instructions when binders are requested.

For more information, review the FHA Catalyst: Case Binder Module User Guide and User Guide Change Overview available on the FHA Catalyst: Case Binder Module webpage.

FHA INFO 2024-88 - FHA Issues Disaster-Related Policy Waiver for Early Payment Default Quality Control Review Requirements

December 12, 2024 - Today, the Federal Housing Administration (FHA) issued a limited waiver of its policy regarding Early Payment Default (EPD) review requirements found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Sections V.A.3.a.i.(C) and V.A.3.a.iv.(B)(2). This waiver applies to FHA-insured mortgages located in Presidentially-Declared Major Disaster Areas (PDMDAs) affected by Hurricane/Tropical Storm Helene and/or Hurricane Milton.

FHA policy requires that mortgagees select all EPDs for review monthly and perform a quality control review to ensure compliance with FHA Single Family origination and underwriting requirements. Given the possibility of an increase in EPDs in these disaster areas, FHA is waiving the requirement for mortgagees to conduct certain quality control reviews because it believes EPDs on loans closed prior to the disaster are most likely a result of unforeseen circumstances associated with these disasters, such as loss of employment and/or income, property damage and repairs, forced relocation, and other contributing factors.
The current policy is being waived for FHA-insured mortgages that:

• are in a PDMDA associated with Hurricane/Tropical Storm Helene and/or Hurricane Milton,
• have a mortgage closing date before the start date of the applicable incident period as determined by the Federal Emergency Management Agency (FEMA), and
• became an EPD between November 1, 2024, and April 30, 2025.

Mortgagees also must continue to provide borrowers in the affected areas with appropriate FHA Loss Mitigation options, report delinquencies in the Single Family Default Monitoring System (SFDMS), and meet all other servicing and loss mitigation requirements in Section III of Handbook 4000.1.

Mortgagees and other interested parties are encouraged to review the waiver and contact the FHA Resource Center if they have questions.

FHA INFO 2024-87 - FHA Extends its Foreclosure Moratoriums for Borrowers Impacted by Hurricanes Helene and Milton

December 6, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-25, Extension of the Foreclosure Moratoriums in Connection with Hurricanes Helene and Milton. The moratoriums will remain in effect through April 11, 2025. Mortgagees are required to implement this policy immediately.

This extension provides homeowners with FHA-insured mortgages in Presidentially Declared Major Disaster Areas (PDMDAs) additional time to access federal, state, or local housing resources; consult with HUD-approved housing counselors; and/or rebuild their homes. FHA believes these foreclosure moratorium extensions are warranted because of the devastation caused by Hurricanes Helene and Milton, the extensive property damage sustained, and the reduced capacity for those impacted to access needed resources. Many areas in Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia are deemed PDMDAs.

Borrowers with FHA-insured mortgages located in Hurricanes Helen and Milton PDMDAs should contact their mortgage or loan servicer immediately for assistance.

Borrowers can also obtain additional assistance in the following ways:

• Visit the FHA Disaster Relief site or call the FHA Resource Center at 1-800-304-9320 to learn more about disaster relief options.
• Contact a HUD-approved housing counseling agency. These agencies have counselors available to assist those impacted by natural disasters in determining assistance needs and identifying available resources. Homeowners can find a HUD- approved housing counseling agency online or use HUD’s telephone look-up tool by calling (800) 569-4287. There is never a fee for foreclosure prevention counseling.
• For borrowers whose homes are destroyed or damaged to an extent that requires reconstruction or complete replacement, contact an FHA-approved lender about FHA’s Section 203(h) program. This program provides 100 percent financing for eligible homeowners to rebuild their home or purchase a new one.
• For borrowers seeking to purchase and/or repair a home that has been damaged, contact an FHA-approved lender about FHA's Section 203(k) loan program. This program allows individuals to finance the purchase or refinance of a house, as well as the costs of repair or renovation, through a single mortgage.

The provisions of ML 2024-25 apply to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (HECM) programs.

Mortgagees and other interested parties are encouraged to review ML 2024-25 and contact the FHA Resource Center if they have questions.

Read today’s press release for more information.

FHA INFO 2024-86 - FHA Modernizes Engagement with Borrowers in Default Requirements

December 4, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2024-24, Modernization of Engagement with Borrowers in Default, which provides guidance for implementing the provisions of the final rule, Modernization of Engagement with Mortgagors in Default (Docket No. FR-6353-F-02), which published in the Federal Register on August 2, 2024.

Specifically, this ML:

• updates the requirements for mortgagees to meet with borrowers in default; and
• allows mortgagees to satisfy the meeting requirement by giving them the ability to use alternative communication methods to discuss available loss mitigation options with borrowers and to help them keep them in their homes.

This ML also contains alternative interim procedures for engaging borrowers in default. These interim procedures are effective January 1, 2025, through June 30, 2025. These interim procedures give mortgagees the ability to maintain their current operations while working towards implementing the ML’s permanent provisions, which may be implemented immediately but must be implemented no later than July 1, 2025.

The policy updates in this ML will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

Stakeholders with questions about the ML or final rule should contact the FHA Resource Center for more information.

FHA INFO 2024-85 - FHA Announces a Demonstration to Allow Electronic Delivery of Partial Claim Documents

December 3, 2024 - Today, the Federal Housing Administration (FHA) published the notice, Partial Claim Electronic Delivery Alternative Demonstration (Docket No. FR-6474-N-01) in the Federal Register, announcing the Partial Claim Electronic Delivery Alternative Demonstration (the Demonstration).

The Demonstration provides mortgagees who elect to participate the ability to submit digital copies of partial claim promissory notes and subordinate mortgages (PC Documents) to FHA in lieu of original documents. Mortgagees would retain the original documents. Through the Demonstration, FHA intends to reduce the costs and burdens for mortgagees associated with delivering original PC Documents to HUD.

FHA will announce the effective date of the Demonstration in a subsequent Federal Register notice and will publish a Mortgagee Letter with implementation guidance for the Demonstration.

Stakeholders are encouraged to thoroughly review the notice and provide comments, if any, through February 3, 2025, following the methods outlined in the notice.

FHA INFO 2024-84 - FHA Publishes Revised Cyber Incident Reporting Requirements Mortgagee Letter

December 2, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-23, Revised Cyber Incident Reporting Requirements. This ML harmonizes FHA’s cyber incident reporting requirements with those of the federal banking agencies.
Effective immediately, FHA-approved mortgagees must notify the Department of Housing and Urban Development (HUD) as soon as possible — but no later than 36 hours — after determining that a reportable cyber incident has occurred via the FHA Resource Center at answers@hud.gov as well as HUD’s Security Operations Center at cirt@hud.gov.

On September 30, 2024, FHA posted a draft of the revised cyber incident ML on its Office of Single Family Housing Drafting Table for stakeholder review and feedback. This final ML has been adopted without changes.
This updated guidance supersedes FHA’s previous guidance in ML 2024-10, dated May 23, 2024, and serves to balance FHA’s need for swift, defensive information while minimizing the operational burden on affected partners. FHA will remain committed to industry harmonization as federal cyber incident reporting standards continue to evolve.

Stakeholders should contact the FHA Resource Center if they have questions.

FHA INFO 2024-82 - 2025 Federal Housing Administration Nationwide Forward Mortgage and Home Equity Conversion Mortgage Limits

November 26, 2024 - In this Announcement:

• 2025 Nationwide Forward Mortgage Limits
• 2025 Nationwide Home Equity Conversion Mortgage Limits
• Additional Information

See below for details.

2025 Nationwide Forward Mortgage Limits

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2024-21, 2025 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages for calendar year (CY) 2025.

The FHA national mortgage limits by the number of units, are as follows:

As stated in the FHA Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), section II.A.2.a.ii Nationwide Mortgage Limits, FHA calculates forward mortgage limits based on the median house prices in accordance with the National Housing Act and its Single Family forward mortgage limits are set by Metropolitan Statistical Area (MSA) and county. Loan limits in these areas are set and published annually using the county with the highest median price within the MSA.

• FHA forward mortgage limits for individual MSAs and counties are available on the FHA Mortgage Limits web page.
• Downloadable text files with complete listings of all county loan limits are available on the CHUMS data files web page.
• FHA’s list of areas at the “ceiling” and areas with limits between the “floor” and “ceiling” — along with lists that can be sorted by state, county, or Metropolitan Statistical Area (MSA) or by calendar year — on the Maximum Mortgage Limits web page.

The process that permits appeals to change high-cost area loan limits in accordance with Handbook 4000.1 has also been updated. Appeals should now be forwarded to the FHA Resource Center instead of FHA’s Santa Ana Homeownership Center as in previous years. These new loan limits are effective for case numbers assigned on or after January 1, 2025, through December 31, 2025; however, updates to the process to request local increases are effective immediately.

¹Alaska, Hawaii, Guam and the U.S. Virgin Islands are subject to a higher “ceiling.” See Mortgagee Letter 2024-21 for details.

2025 Nationwide Home Equity Conversion Mortgage Limits

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2024-22, 2025 Home Equity Conversion Mortgage (HECM) Limits, which provides the calendar year (CY) 2025 maximum claim amount for FHA-insured traditional HECM, HECM for purchase, and HECM-to-HECM refinances.

The CY 2025 maximum claim amount for FHA-insured HECMs for all areas — including Alaska, Hawaii, Guam, and the U.S. Virgin Islands —will be $1,209,750, which is 150 percent of Federal Home Loan Mortgage Corporation’s (Freddie Mac) national conforming limit of $806,500. This limit is applicable for case numbers assigned on or after January 1, 2025, through December 31, 2025. For additional details, refer to Mortgagee Letter 2024-22.

Additional Information

The updated CY 2025 Title II forward mortgage loan limits and HECM maximum claim amount will be included in a future update to Handbook 4000.1.

Mortgagees and other interested parties are encouraged to thoroughly review MLs 2024-21 and 2024-22 and contact the FHA Resource Center with questions.

Read today’s press release for more information.

FHA INFO 2024-80 - FHA Issues Extension to Compliance Date for Portions of the Modernization of Engagement with Mortgagors in Default Final Rule

November 21, 2024 - Today, the Federal Housing Administration (FHA) published a Federal Register (FR) notice, Modernization of Engagement with Mortgagors in Default: Partial Extension of Compliance Date, [Docket No. FR-6353-N-03], which extends the compliance date for certain provisions in the August 2, 2024, final rule, Modernization of Engagement with Mortgagors in Default [FR-6353-F-02] through July 1, 2025.

The final rule requires mortgagees to conduct meetings with all mortgagors in default, removing two exceptions to the meeting requirement if the mortgagor does not reside in the mortgaged property or if the mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either. This extension effectively preserves these two exceptions to the meeting requirement until July 1, 2025.

HUD decided to issue today’s extension after careful review and consideration of the feedback received on the draft mortgagee letter (ML), Modernization of Engagement with Borrowers in Default posted on the Single Family Housing Drafting Table on August 14, 2024, concerning the requirement to meet with all mortgagors in default.

Mortgagees will now have an additional six months to rely on the two exceptions to the meeting requirement while they update their technology systems, processes and procedures needed for compliance with the entirety of the rule and with guidance that will be established in a forthcoming mortgagee letter (ML) entitled, Modernization of Engagement with Borrowers in Default. This extension is intended to minimize disruption to mortgagees by enabling them to maintain existing operations while working towards compliance with the new requirements, which will include those in the forthcoming ML.

Mortgagees may elect to comply with the entirety of HUD’s final rule beginning on its effective date of January 1, 2025, or may delay compliance with those certain provisions referenced in the subject FR notice through July 1, 2025.

Stakeholders with questions about the final rule or this extension should contact the FHA Resource Center (below) for more information.

FHA INFO 2024-76 - FHA Issues Final Guidance for Federal Flood Risk Management Standards for New Construction Properties Located in Special Flood Hazard Areas

November 7, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-20, Adoption of Federal Flood Risk Management Standard (FFRMS) for Minimum Property Standards (MPS) in Special Flood Hazard Areas (SFHA). This ML updates FHA’s Minimum Property Standards (MPS) for all newly built single-family residential structures - except for manufactured homes - being financed through the FHA Single Family program.

With this ML, FHA is implementing the provisions of the final rule, Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, published on April 23, 2024.This final rule revised HUD’s regulations governing floodplain management and the protection of wetlands to implement the FFRMS in accordance with Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input dated January 30, 2015.

In accordance with the provisions of the final rule, FHA’s MPS are updated to require that the lowest floor in newly constructed dwellings located within the 1-percent-annual-chance (100-year) floodplain be built at least two feet above the base flood elevation as determined by FEMA. This elevation standard would be applicable to FHA-insured mortgages on homes that:

• are new construction; and
• have a building permit application submission, or their equivalent, dated on or after January 1, 2025.

HUD estimates that elevating new construction dwellings in flood-prone areas to meet the FFRMS could lead to homeowner savings of $56.4 million to $324.3 million over the expected 40-year economic life of the properties. These anticipated savings should result from:

• reduced property damage;
• avoidance of relocation;
• avoidance of temporary housing expenses;
• avoidance of lost income due to flooding; and
• potentially, lower flood insurance premiums.

Adopting the FFRMS is crucial for improving community resilience to flood exposure and decreasing potential flood damage, while ensuring the safety and soundness of properties secured by FHA-insured financing.

The provisions of this ML take into consideration stakeholder feedback provided on the draft ML posted on the Single Family Housing Drafting Table and announced in FHA INFO 2024-65. Refer to the ML for effective dates. These policy updates will be incorporated into a future version on the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

For more information on the FFRMS, access HUD’s FFRMS Final Rule Webinar Series, and review the FFRMS FAQs and the final rule in its entirety or contact the FHA Resource Center.

FHA INFO 2024-72 - Reminder Guidance for FHA-Approved Mortgagees Regarding Presidentially Declared Major Disaster Areas

October 21, 2024 - In the wake of the devastation caused by Hurricane/Tropical Storm Helene and Hurricane Milton, the Federal Housing Administration (FHA) reminds mortgagees about its guidance for servicing and/or originating FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations within the U.S. and its territories where the President has declared a major disaster under the Stafford Act. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond.

This guidance serves as a reminder that applies to all Presidentially-Declared Major Disaster Areas (PDMDAs), which can be found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), unless communicated otherwise through waivers or mortgagee letters.

Loan Servicing and Loss Mitigation

Forward Mortgages
The mortgagee may offer forbearance relief to borrowers with a mortgaged property or place of employment located within a PDMDA as follows:

• Informal forbearance for borrowers in PDMDAs. The mortgagee may consider borrowers in PDMDAs for an informal forbearance and may offer additional informal forbearance periods if the foreclosure moratorium is extended, as mentioned below.
• Formal forbearance for borrowers in PDMDAs. The mortgagee may consider formal forbearances for borrowers in PDMDAs while they are pursuing home repairs and/or resolving verifiable financial difficulties related to the disaster, provided that:
  • The forbearance period does not exceed the estimated time needed to complete the home repairs; and
  • The total accumulated mortgage arrearages during the forbearance period do not exceed the equivalent of 12 months of principal, interest, taxes, and insurance (PITI).
• FHA-insured forward mortgages secured by properties in PDMDAs are subject to a 90-day foreclosure moratorium following the disaster declaration.
• In PDMDAs, FHA provides mortgagees an automatic 90-day extension from the foreclosure moratorium expiration date to commence or recommence a foreclosure action or evaluate the borrower under HUD’s loss mitigation programs.
• For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Handbook 4000.1 Section III.A.2n.iii, Monitoring of Repairs to Substantially Damaged Homes.

Mortgagees are encouraged to review the servicing guidance in Section III.A.2.n of Handbook 4000.1 as it relates to servicing mortgages in PDMDAs.

Mortgagees are reminded to contact affected borrowers who may require loss mitigation assistance as soon as possible post-disaster. FHA also encourages mortgagees to use any permissible means to contact borrowers to provide them with needed forbearance relief. Because of the extensive destruction in connection with Hurricane Helene and disruption to modes of communication, mortgagees may offer and provide the forbearance unless the borrower affirmatively declines the offer.

Home Equity Conversion Mortgages

• HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day extension of HECM foreclosure timelines.
• In PDMDAs, FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure moratorium expiration date to commence or recommence a foreclosure action.

Mortgagees are encouraged to review the servicing guidance outlined in Handbook 4000.1, Section III.B.3.a, relating to HECMs in PDMDAs.

Mortgage Origination

Inspection and repair escrow requirements for mortgages pending closing or endorsement

• All properties with pending mortgages or endorsements in areas under a PDMDA designated for individual assistance must have a damage inspection report that identifies and quantifies any dwelling damage.
• The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the property, and the report must be dated after the Incident Period (as defined by the Federal Emergency Management Association) or 14 days from the incident period start date, whichever is earlier.
• If the effective date of the appraisal is on or after the date required above for an inspection, a separate damage inspection report is not necessary.
• All damages, regardless of amount, must be repaired by licensed contractors or per local jurisdictional requirements, and the property must be restored to pre-loss condition with appropriate and applicable documentation.

Preparing for longer-term recovery

In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review the following:

• Guidance for FHA’s 203(h) Mortgage Insurance for Disaster Victims in Section II.A.8.b of Handbook 4000.1. The 203(h) program provides mortgage insurance on mortgages used to finance the rehabilitation or reconstruction of an existing home or the purchase of another one for victims who have lost their homes due to a major disaster in a PDMDA.
• Guidance for FHA’s 203(k) Rehabilitation Mortgage Insurance Program in Section II.A.8.a of Handbook 4000.1. The 203(k) program provides mortgage insurance for financing or refinancing of a home, including the cost of repairs or renovation – structural and non-structural.

Mortgagees can obtain more information about FHA’s policies — as well as specific PDMDA-related policies — by contacting the FHA Resource Center.

Additional disaster recovery resources from HUD and other Federal and state agencies are available on HUD’s Disaster Resources web page.

FHA INFO 2024-71 - Temporary Policy Waivers Related to Hurricane/Tropical Storm Helene and Hurricane Milton

October 21, 2024 - In this Announcement:

• 203(k) Limited Temporary Waiver Hurricane Helene
• Temporary Waiver of 14-day Damage Inspection Reports in Overlapping Presidentially-declared Major Disaster Areas

See below for details:

203(k) Limited Temporary Waiver Hurricane/Tropical Storm Helene and Hurricane Milton

Today, the Federal Housing Administration (FHA) posted a temporary waiver on hud.gov of its 203(k) Rehabilitation Mortgage Insurance Program requirement that states, when a repair is considered "major,” it becomes ineligible to be financed as part of the 203(k) Limited program, if the repairs prevent the borrower from occupying the property for more than 15 days.

As result of the Presidentially-declared Major Disaster Areas (PDMDAs) related to Hurricane/Tropical Storm Helene and Hurricane Milton, many properties were severely impacted or destroyed and are now in serious need of rehabilitation and/or repair. FHA believes a temporary waiver of its definition of "major repair" related to the 15 days (or 30 days after November 4, 2024) needed for repair completion is crucial to ensure homeowners in this PDMDA can rebuild their properties.

Today’s temporary waiver applies to FHA-insured Limited 203(k) mortgages closed on or before August 31, 2025. While this temporary policy waives the 15-day occupancy requirement for this PDMDA, the requirement that at least one borrower resides in the property within 60 days remains the same. For more information, view the published policy in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) II.A.1.b.iii (A) for Principal Residences.

This temporary policy waiver is effective through August 31, 2025. The extended waiver period accounts for any construction delays possibly due to the continued hurricane season as well as the upcoming winter season.

Temporary Waiver of 14-day Damage Inspection Report Requirement in Overlapping Presidentially-declared Major Disaster Areas

Today, the Federal Housing Administration (FHA) issued a temporary waiver of its policy requiring damage inspection reports for properties in Presidentially-declared Major Disaster Areas (PDMDAs) that must be completed after the closure date of an incident period as determined by the Federal Emergency Management Agency (FEMA), or at least 14-days from the start of the incident period, whichever is earlier. This temporary waiver of a second 14-day incident period applies specifically to inspection reports associated with the Hurricane Milton PDMDA (DR-4834-FL), as declared on October 11, 2024.

Due to Hurricane/Tropical Storm Helene and Hurricane Milton, both of which severely impacted similar regions within a 14-day period, FHA’s current policy of requiring a separate 14-day waiting period for damage inspections and reports following each event has created the potential for extensive repair/rehabilitation delays for homebuyers and sellers.

FHA believes that the presence of FEMA in areas already included in the multiple Hurricane/Tropical Storm Helene PDMDAs provides enough stability and risk mitigation to eliminate the requirement for a second 14-day waiting period for inspection and damage reports associated with the Hurricane Milton PDMDA (DR-4834-FL). While this policy waves the 14-day waiting period to conduct the damage inspection report, the requirement to conduct a damage inspection report, and other inspection and repair escrow requirements, for all properties with pending mortgages or endorsements in the PDMDAs remain the same.

In summary, this temporary waiver:

• applies only to properties located within the overlapping PDMDAs;
• waives the 14-day waiting period to conduct the damage inspection report;
• does not waive the damage inspection report or inspection and repair escrow requirements;
• is not applicable to properties located in areas included in the Florida Hurricane Milton PDMDA (DR-4834-FL), unless the properties were also included in a PDMDA associated with Hurricane/Tropical Storm Helene.

This waiver of Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) policy — sections II.A.7.c, II.B.6.a.xiii, and II.B.7.c. — is effective immediately.

Mortgagees are encouraged to review both waivers. For questions or additional information, contact the FHA Resource Center.

FHA INFO 2024-69 - Reminder Guidance for FHA-Approved Mortgagees Regarding Presidentially Declared Major Disaster Areas

October 1, 2024 - In the wake of the devastation caused by Hurricane Helene, the Federal Housing Administration (FHA) reminds mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations in the U.S. and its territories where the President has declared a Major Disaster under the Stafford Act. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond.

The following guidance serves as a reminder that applies to all Presidentially-Declared Major Disaster Areas (PDMDA) which can be found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1):

Mortgage Origination

Inspection and Repair Escrow Requirements for Mortgages Pending Closing or Endorsement

• All properties with pending mortgages or endorsements in areas under a PDMDA designated for individual assistance must have a damage inspection report that identifies and quantifies any dwelling damage.
• The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the property, and the report must be dated after the Incident Period (as defined by the Federal Emergency Management Association) or 14 Days from the Incident Period start date, whichever is earlier.
• If the effective date of the appraisal is on or after the date required above for an inspection, a separate damage inspection report is not necessary.
• All damages, regardless of amount, must be repaired by licensed contractors or per local jurisdictional requirements, and the Property must be restored to pre-loss condition with appropriate and applicable documentation.

Loan Servicing and Loss Mitigation

The mortgagee may offer forbearance relief to a borrower with a mortgaged property or place of employment located within a PDMDA as follows:

• Informal Forbearance for Borrowers in PDMDAs. The mortgagee may consider borrowers in PDMDAs for an Informal Forbearance and may offer additional Informal Forbearance periods if the foreclosure moratorium is extended, as mentioned below.
• Formal Forbearance for Borrowers in PDMDAs. The mortgagee may consider Formal Forbearances for borrowers in PDMDAs while they are pursuing home repairs and/or resolving verifiable financial difficulties related to the disaster, provided that:
  • The forbearance period does not exceed the estimated time needed to complete the home repairs; and
  • The total accumulated mortgage arrearages during the forbearance period does not exceed the equivalent of 12 months of principal, interest, taxes, and insurance (PITI).
• FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster declaration.
• In PDMDAs, FHA provides mortgagees an automatic 90-day extension from the foreclosure moratorium expiration date to commence or recommence a foreclosure action or evaluate the borrower under HUD’s Loss Mitigation Program.
• For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Handbook 4000.1 Section III.A.3.c.iii, Monitoring of Repairs to Substantially Damaged Homes.

Mortgagees should review complete servicing guidance in Handbook 4000.1, Sections III.A.2, relating to the servicing of mortgages in PDMDAs.

Mortgagees are reminded to contact affected borrowers who may require loss mitigation assistance as soon as possible post-disaster and FHA encourages mortgagees to use any permissible means to contact borrowers to provide them with needed forbearance relief. Because of the extensive destruction in connection with Hurricane Helene and disruption to modes of communication, mortgagees may offer and provide the forbearance unless the borrower affirmatively declines the offer.

Home Equity Conversion Mortgages

• HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day extension of HECM foreclosure timelines.
• In PDMDAs, FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure extension expiration date to commence or recommence a foreclosure action.

Preparing for Longer-Term Recovery

In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review the following:

• Guidance for FHA’s 203(h) Mortgage Insurance for Disaster Victims in Section II.A.8.b of Handbook 4000.1. The 203(h) program provides mortgage insurance for mortgages used to finance the rehabilitation or reconstruction of an existing home or the purchase of another one for victims who have lost their homes due to a major disaster in a PDMDA.
• Guidance for FHA’s 203(k) Rehabilitation Mortgage Insurance Program in Section II.A.8.a of Handbook 4000.1. The 203(k) program provides mortgage insurance for financing or refinancing of a home, including the cost of repairs or renovation – structural and non-structural.

Find additional disaster resources from HUD and other Federal and state agencies to help with disaster recovery on HUD’s Disaster Resources web page.

For questions or additional information, contact the FHA Resource Center.

FHA INFO 2024-63 - FHA Finalizes Updates to Debenture Interest Rates and Reimbursement Process for Home Equity Conversion Mortgage Claims

September 4, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-18, Debenture Interest Rates for Home Equity Conversion Mortgages (HECM). This ML updates the debenture interest rate used for the payment of debenture interest for HECM claims and establishes a process for adjusting debenture interest for claims already filed on HECMs that became due and payable on or after September 19, 2017. Today’s ML takes into consideration industry feedback received on the draft ML that was previously announced in FHA INFO 2024-47.

This ML:

• Modifies 24 CFR § 206.146 by defining the date of default as the date for determining the debenture interest rate on loans that become due and payable after publication of this ML and reaffirms the interest rate used for the payment of debenture interest for HECM claims to align with the 2017 rule;
• Adds Debenture Interest Rates (Section III.B.2.f.i(F)) to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1); and
• Establishes a Debenture Interest Rate Adjustment (DIRA) process so HECM holders, or their authorized representative, can request an adjustment to the debenture interest rate used to calculate payments for claims filed on HECMs that became due and payable on or after September 19, 2017, and filed prior to September 28, 2024.

The DIRA process will be available from January 2, 2025, through July 1, 2025. To aid HECM holders and their authorized representatives with this process, HUD is providing a DIRA request template that may be used for DIRA submissions as Attachment 1 to the Mortgagee Letter.

HUD encourages all HECM holders to thoroughly analyze their portfolio to determine which HECM claims they are legally entitled to include in a DIRA submission, as only one DIRA and one corrective DIRA will be accepted by HUD.

The provisions of this ML are effective September 28, 2024. The policy updates in this ML will be incorporated into a future version of the Handbook 4000.1.

FHA INFO 2024-62 - FHA Reposts its Draft Modernization of Engagement with Borrowers in Default Mortgagee Letter

August 30, 2024 - Today, the Federal Housing Administration (FHA) posted an enhanced draft version of the Modernization of Engagement of Borrowers in Default Mortgagee Letter (ML) on its Single Family Housing Drafting Table. This enhanced version includes line numbers in the left margin to easily cross reference to the feedback worksheet. No other changes were made. FHA makes this enhancement to better serve all its stakeholders.

The review period to provide feedback on the draft ML ends on September 13, 2024. Instructions for viewing the draft ML and providing feedback are available on the FHA Single Family Housing Drafting Table. Feedback already submitted is under review and does not need to be resubmitted. FHA will carefully consider all feedback received before publishing a final ML.

FHA INFO 2024-60 - FHA Announces Interim Procedures for Nonjudicial Foreclosures with Secretary-Held Liens

August 29, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-17, Interim Procedures for Nonjudicial Foreclosures with Secretary-Held Liens, which establishes an interim process for releasing FHA subordinate Secretary-held liens following the completion of a nonjudicial foreclosure sale where there are no surplus funds available to satisfy HUD’s subordinate lien.

The guidance in this ML is optional and applies to all FHA Title II Single Family forward mortgages. The provisions in the ML may be implemented immediately.

FHA is developing permanent policy to provide a new reporting requirement for all foreclosures, but primarily for foreclosures where there are Secretary-held subordinate liens. That policy will be posted on the Single Family Housing Policy Drafting Table for public review and feedback in the future. Mortgagees and other interested parties are encouraged to thoroughly review ML 2024-17 and refer any questions to the FHA Resource Center.

FHA INFO 2024-59 - FHA Implements System Enhancements to Accommodate Revision to 203(k) Rehabilitation Mortgage Insurance Program

August 22, 2024 - On July 9, 2024, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-13, Revisions to the 203(k) Rehabilitation Mortgage Insurance Program including updates to the 203(k) Consultant Requirements and Fees. This ML implements updates to the Section 203(k) program guidelines and is intended to reduce barriers to using the program.

To support the implementation of the updates announced in ML 2024-13, FHA will make the following system updates for forward mortgages in FHA Connection (FHAC):

• Increase the maximum total rehabilitation cost for Limited 203(k) from $35,000 to $75,000.
• Increase the allowable financed mortgage payment reserves from six months to 12 months for a Standard 203(k) loan.
  • Add a Notice of Return (NOR) edit on insurance application to ensure the financed amount does not exceed 12 months of Principle, Interest, Taxes, and Insurance (PITI).
• Allow 203(k) Consultant fees to be financed for a Limited 203(k) loan.
• Extend the maximum rehabilitation period as follows:
  • Limited 203(k): Nine months
  • Standard 203(k):12 months

These system updates will be available in conjunction with the implementation of the ML 2024-13 for all FHA case numbers assigned on or after November 4, 2024. The FHAC Guide has been updated to reflect these changes and is available on the portal homepage.

For submissions through FHAC Business-to-Government (B2G), the data must be submitted for FHA case numbers assigned on or after November 4, 2024. The FHAC B2G submission requirements accommodate the new data fields. Refer to the B2G Interface webpage for technical requirements.

FHA INFO 2024-53 - FHA Publishes Final Rule for Modernization of Engagement with Mortgagors in Default

August 2, 2024 - Today, the Federal Housing Administration (FHA) published a final rule, Modernization of Engagement with Mortgagors in Default (Docket No. FR-6353-F-02) in the Federal Register (FR).

This final rule updates the Department of Housing and Urban Development’s (HUD) current regulation (24 CFR 203.604) that requires mortgagees to meet in person with borrowers who are in default on their mortgage payments. The final rule allows for the use of electronic and other remote methods of communication to satisfy HUD’s requirement to meet with a borrower who is in default. HUD’s updated regulation will align with advances in electronic communication technology and borrower engagement preferences while preserving necessary consumer protections. The provisions in this final rule become effective on January 1, 2025.

This final rule takes into consideration public comments received in response to the proposed rule [Docket No. FR-6353- P-01], published on July 31, 2023, as announced in FHA INFO 2023- 60.

FHA will soon post a draft of the Mortgagee Letter (ML) that will implement the provisions of the rule on the Single Family Housing Drafting Table for stakeholder feedback. Following the feedback period, FHA will carefully consider all feedback received before publishing a final ML.

FHA issued regulatory and Handbook waivers permitting mortgagees to use electronic and remote means of communication during the COVID-19 pandemic, which were extended on April 4, 2024. Those waivers remain in effect and were extended through January 1, 2025, unless the final rule amending 24 CFR § 203.604 and a ML or Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) update amending Section III.A.2.h.xii. become effective prior to that date.

FHA INFO 2024-51 - Extension of the Foreclosure Moratorium in Connection with the Presidentially-Declared Major Disaster Area in Maui County, Hawaii

July 25, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-15, Third Extension of the Foreclosure Moratorium in Connection with the Presidentially-Declared Major Disaster Area in Maui County, Hawaii. This new extension — which is effective immediately — gives homeowners with FHA-insured mortgages in Maui County additional time to access available federal, state, or local housing resources; consult with HUD-approved housing counselors; and/or rebuild their homes.

FHA believes that due to the extent of the devastation from the wildfires, the reduced capacity to access needed resources, and the unique geographic location of Maui, this further extension for the properties in Maui County is warranted.

The provisions of ML 2024-15 apply to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (HECM) programs. The moratorium will remain in effect through January 1, 2025.

Mortgagees are required to implement this policy immediately. Stakeholders should contact the FHA Resource Center if they have questions after reviewing the ML.

FHA INFO 2024-47 - HUD Proposes Updates to Debenture Interest Rates for Home Equity Conversion Mortgage Claims

July 17, 2024 - Today, the Federal Housing Administration (FHA) posted a new draft Mortgagee Letter (ML), Calculation of Debenture Interest Rates for Home Equity Conversion Mortgages (HECM), on FHA’s Office of Single Family Housing Drafting Table (Drafting Table) for public review and feedback. This draft ML proposes updates to HUD’s calculations for the payment of debenture interest for HECM claims and establishes a process for retroactively adjusting the calculation of debenture interest for claims filed on HECMs that became due and payable on or after September 19, 2017.

On January 19, 2017, HUD updated the HECM program by publishing the final rule Strengthening the Home Equity Conversion Mortgage Program. This final rule updated 24 CFR§ 206.146(b) to provide that, for HECMs endorsed after January 23, 2004, if an insurance claim was paid in cash, the debenture interest rate for purposes of calculating the claim shall be the monthly average yield on United States Treasury Securities adjusted to a constant maturity of 10 years, for the month in which the default on the mortgage occurred. HUD, however, never fully implemented this regulatory change. To reaffirm its commitment to the future success of the HECM program and the senior citizen population it is designed to serve, HUD has determined that changes to its debenture interest payment methodology are necessary to maintain long-term program stability.

With this draft ML, FHA proposes to:

• Modify 24 CFR § 206.146 for the calculation of the debenture interest rate including using the date of default as the date for determining the debenture interest rate on loans that become due and payable after publication of the final ML.
• Add debenture interest rates (Section III.B.2.f.i(F)) to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1); and
• Establish a Debenture Interest Rate Adjustment (DIRA) process whereby HECM holders can request an adjustment for mortgages that became due and payable on or after September 19, 2017, and filed a claim prior to the effective date of the final ML, if an insurance claim was paid in cash.

FHA believes that the proposed amendments to the HECM policy are necessary to improve the fiscal safety and soundness of the HECM program.

Interested stakeholders are encouraged to thoroughly review the draft ML and provide feedback through July 29, 2024. Instructions for providing feedback are posted on the Drafting Table. FHA will carefully consider all feedback received before publishing a final ML.

As a reminder, this draft is not official departmental policy and cannot be used in connection with any FHA-insured mortgage until finalized. FHA’s existing policies remain in effect until amended.

FHA INFO 2024-56 - FHA Updates Origination Defect Taxonomy to Include Fraud or Misrepresentation Involving Sponsored Third-Party Originators

July 10, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-14, Fraud or Misrepresentation Involving Sponsored Third-Party Originators.

This ML updates FHA’s Defect Taxonomy to include fraud or material misrepresentation involving a Third-Party Originator (TPO) as a Tier 1 severity defect. Mortgagees are responsible for the actions of their sponsored TPOs under 24 CFR § 202.8(a)(3) and Handbook 4000.1 Section I.A.5.a.v. FHA is implementing these changes to better align the Defect Taxonomy with these existing requirements and mitigate risk to the Mutual Mortgage Insurance Fund (MMI Fund).

FHA’s Defect Taxonomy is its quality assurance framework for all Title II loan reviews. It provides a consistent methodology for identifying defects at the loan level, useful data, feedback through structured categorization of defects, and balance between FHA’s risk management and quality assurance business processes.

The provisions of this ML apply to all FHA Title II Single Family mortgage programs and are effective immediately.

This policy update will be incorporated into a future version of FHA’s Single Family Housing Handbook 4000.1.

FHA INFO 2024-44 - FHA Announces Updates to its 203(k) Rehabilitation Mortgage Program and 203(k) Industry Stakeholder Briefing

July 9, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-13, Revisions to the 203(k) Rehabilitation Mortgage Insurance Program including updates to the 203(k) Consultant Requirements and Fees. This ML implements updates to the Section 203(k) program guidelines, which are intended to reduce barriers to using the program.

Enhancing the 203(k) Rehabilitation Mortgage Insurance Program (203(k) program) is an integral part of FHA’s goals to increase the supply of affordable housing, expand affordable financing options for homes in need of repair, and stabilize neighborhoods by reducing the blight of vacant and abandoned properties.

With the publication of today’s ML, FHA has now enhanced its 203(k) program guidelines to:

• increase the Limited 203(k) total rehabilitation cost from a maximum of $35,000 to a maximum of $75,000;
• introduce an annual review process for updating the maximum total rehabilitation cost for Limited 203(k);
• extend the rehabilitation period to 12 months for the Standard 203(k) and nine months for the Limited 203(k);
• increase the number of days that a borrower is unable to occupy the subject property during the rehabilitation period for Limited 203(k) from 15 to 30 days;
• permit mortgagees to increase the number of months of financeable Mortgage Payment Reserves for the Standard 203(k);
• allow financing of 203(k) Consultant fees for Limited 203(k); and
• revise the 203(k) Consultant fee schedule.

FHA believes these latest revisions will make the program offerings more attractive to mortgagees, 203(k) Consultants, real estate professionals, home buyers, and homeowners as a tool for revitalizing homes and neighborhoods, thereby providing greater access to, and increased production of, affordable housing.

The publication of these policy updates is the result of many months of engagement with stakeholders. In recent years home buyers obtained fewer 203(k) program renovation mortgages despite the growing market need.

To identify potential causes for that decline and opportunities to improve the 203(k) program, FHA undertook a two-pronged approach — by first publishing on February 14, 2023, a Request for Information (RFI) notice in the Federal Register [Docket No. FR-6366-N-1] seeking public comments, and then following up by posting the draft ML on its Single Family Housing Policy Drafting Table on November 29, 2023, seeking stakeholder feedback — regarding the barriers that might be limiting the program’s usage.

The program enhancements contained in today’s ML must be implemented for all FHA case numbers assigned on or after November 4, 2024, and will be incorporated into a future update of the FHA Single Family Housing Policy Handbook 4000.1.

Stakeholders are encouraged to thoroughly review ML 2024-13 and contact the FHA Resource Center with any questions.

For more information, read today's press release.

Technology Updates

Technology systems updates supporting these changes will be communicated in a future FHA INFO.

Industry Stakeholder Briefings — Updates to FHA’s 203(k) Program

FHA subject matter experts will host two industry stakeholder briefings with mortgagees, 203(k) Consultants, real estate professionals, and other interested parties regarding the recent revisions to its 203(k) Rehabilitation Mortgage Insurance Program, including updates to its 203(k) Consultant requirements and fees. Briefing details include:

• Title: Updates to FHA’s 203(k) Rehabilitation Mortgage Insurance Program Industry Briefing
• Dates/Times: The same information will be presented at each session. Participants may attend the session of their choice.
  • Register for Session 1 — Wednesday, July 24, 2024, 3:00 PM - 4:00 PM (Eastern)
  • Register for Session 2 — Wednesday, August 28, 2024, 2:00 PM - 3:00 PM (Eastern)
• Target Audience: Mortgagees, existing and aspiring 203(k) Consultants, real estate professionals, and other stakeholders interested in FHA 203(k) transactions.

Registrants are invited to submit questions to sffeedback@hud.gov with the subject line:

Updates to FHA’s 203(k) Rehabilitation Mortgage Insurance Program Webinar.

The deadlines for pre-submitted questions are Wednesday, July 17, 2024, for Session 1, and Wednesday, August 21, 2024, for Session 2.

FHA INFO 2024-40 - FHA Implements Provisions of Final Rule Clarifying Investing Mortgagees and GSE Definition

June 20, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-12, Expansion of Government-Sponsored Enterprises (GSE) Definition and Clarification of Investing Mortgagee Definition. This ML implements the provisions of the final rule, Revision of Investing Lenders and Investing Mortgagees Requirements and Expansion of Government Sponsored Enterprises Definition, announced April 23, 2024, in FHA INFO 2024-21.

The final rule revised and clarified requirements for investing lenders and mortgagees to gain or maintain status as an FHA-approved lender or mortgagee, separately defines Government Sponsored Enterprises (GSE), including the Federal Home Loan Banks (FHLB), from other governmental entities and aligned general FHA approval standards with current industry business practices. These changes were largely designed to provide for more precise language and definitions reflecting investing lenders’ or mortgagees’ limited participation in FHA programs and did not represent a significant departure from existing requirements for most lenders and mortgagees originating, endorsing, or servicing FHA-insured loans and mortgages.

This ML provides implementation guidance for the provisions in the final rule. The policies in this ML:

• Distinguishes the two types of government mortgagees:
  • Governmental institutions.
  • Government-sponsored enterprises (GSE).
• Clarifies what activities governmental institutions and GSEs can perform as government mortgagees in FHA single family programs; and
• Updates the definition of investing lenders and mortgagees.

The provisions of this ML are effective immediately and apply to all mortgagees and lenders approved for Title I and/or Title II programs. This policy update will be incorporated into a future version of Single Family Housing Handbook 4000.1.

FHA INFO 2024-34 - Reimbursement of Attorney's Fees in Judicial Foreclosure Actions where there is an FHA Subordinate Lien

May 28, 2024 - Today, the Federal Housing Administration (FHA) published the following Frequently Asked Question (FAQ) to address inquiries received from stakeholders regarding reimbursement of attorney’s fees for judicial foreclosures in states where non-judicial foreclosure is the preferred method of foreclosure, but a mortgagee determines to proceed judicially due to the presence of an FHA subordinate lien:

Q. If the mortgagee proceeds with judicial foreclosure due to the presence of a federal lien, such as a Secretary-held lien, in a state where non-judicial foreclosure is the preferred method as listed in Appendix 5.0 of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), will the mortgagee be reimbursed for attorney’s fees that exceed the amount provided under the preferred method of foreclosure?

A. Yes. If the mortgagee proceeds with a judicial foreclosure due to the presence of a subordinate federal lien, such as a Secretary-held lien, in a state where non-judicial foreclosure is the preferred method as listed in Appendix 5.0 of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), HUD will consider judicial foreclosure to be the preferred method of foreclosure notwithstanding Appendix 5.0 of Handbook 4000.1. Therefore, HUD will reimburse attorney’s fees where the mortgagee submits a breakdown for reasonable and customary attorney’s fees that exceed the amount provided under the non-judicial foreclosure based on the Fannie Mae Allowable Foreclosure Attorney Fees Exhibit, as required under Allowable Foreclosure Attorney Fees and Fees Associated with Bankruptcy Clearance, Possessory Actions, and Completion of a DIL (III.A.2.t.ii.(F)) and For Amounts Exceeding the Maximum Fee and Not Provided for in HUD Schedule (IV.A.2.a.ii(K)(1)(b)).

FHA has been assessing feedback received from various stakeholders as it continues evaluating its policy regarding subordinate federal liens and the nonjudicial foreclosure process.

Stakeholders are encouraged to review the FAQ and contact the FHA Resource Center if there are additional questions.

FHA INFO 2024-33 - FHA Catalyst: Case Binder Module Update

May 28, 2024 - As part of the Federal Housing Administration’s (FHA) ongoing technology modernization effort, it is announcing new enhancements to the FHA Catalyst system to increase operational efficiencies and improve the customer experience. On the evening of May 31, 2024, FHA will implement the following updates to the FHA Catalyst: Case Binder Module:

• New Layout: All document uploads for a single case will be combined and associated with one FHA case number. This new page layout will be available for binders currently in process and those newly uploaded.
• Streamlined Submission Process: Mortgagees will no longer need to enter the Property Address, Headquarters (HQ)/Homeownership Center (HOC) Location, or Submission Type when submitting binders to FHA.
• Messaging Enhancements: System messaging will be improved to include presubmission requirements and binder status.
• “Save and Close” Feature: Mortgagees will have the ability to save their progress prior to submitting binders to FHA.
• Notice of Return (NOR) -- Notification Functionality for Pre-Endorsement Reviews: Mortgagees that submit binders to the HOCs for pre-endorsement reviews will have the ability to send and receive notifications about NORs.

For more information, review the FHA Catalyst: Case Binder Module User Guide and User Guide Change Overview available on the FHA Catalyst: Case Binder Module webpage.

FHA INFO 2024-32 - New Cybersecurity Incident Reporting Requirements Effective Immediately; Significant Cybersecurity Incident (Cyber Incident) Reporting Requirements (ML) 2024-10

May 23, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-10, Significant Cybersecurity Incident (Cyber Incident) Reporting Requirements. These requirements are part of the Department of Housing and Urban Development’s (HUD) commitment to the security and integrity of all its systems and technology supporting FHA operations.

Effective immediately, FHA-approved mortgagees that experience a potential or actual cyber incident must notify HUD via the FHA Resource Center at answers@hud.gov and HUD’s Security Operations Center at cirt@hud.gov within 12 hours of detection with required information as outlined in the ML.

Once notified of an incident, representatives from HUD will contact the designated representative from the institution reporting the incident to determine the appropriate mitigation steps based on the nature of the incident.

This new policy update will be incorporated under Operational Compliance (V.A.2.b), Significant Cybersecurity Incident (viii.), in the Quality Control, Oversight, and Compliance section of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) and is, as previously stated, effective immediately.

Stakeholders are encouraged to read today’s ML 2024-10 in its entirety and contact the FHA Resource Center if there are questions.

FHA INFO 2024-30 -FHA Publishes Updates to Single Family Housing Policy Handbook 4000.1

May 20, 2024 - Today, the Federal Housing Administration (FHA) published updates to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). Today’s update clarifies instructions, adds new guidance, and incorporates previously published Mortgagee Letters (ML) in Sections I, II, III, and IV as well as Appendix 7.0.

In addition to the incorporation of the updates and revisions, there are notable updates in Section II—Origination through Post-closing/Endorsement and Section III—Servicing and Loss Mitigation— of which mortgagees should take note:

• II.A.8.n.vi Assumptions – Allowable Fees and Charges — In this Handbook 4000.1 update, FHA is increasing the processing fee that mortgagees can charge borrowers assuming an existing FHA-insured mortgage, from a maximum of $900 to a maximum of $1,800. This fee increase is designed to compensate mortgagees for costs of processing assumptions at a rate that is appropriate for today’s market. FHA last changed the reasonable and customary fee mortgagees could charge borrowers assuming an FHA-insured mortgage was in 2016.
• III.A.1.b.i(B) Responsibility During Transfers of Servicing Rights — This change requires servicers to transfer the borrowers’ language preference to a new servicer as part of a transfer of servicing rights in support of FHA’s efforts to provide information and services to borrowers for whom English may not be their first language.

Today’s update also includes the updated Appraisal Report and Data Delivery Guide and the Single Family Default Monitoring System Reporting Codes documents that are posted to the Supplemental Documents web page.

Stakeholders are encouraged to thoroughly review and familiarize themselves with the revisions in Handbook 4000.1. See the Handbook 4000.1 Transmittal for a summary of all changes, as they reflect and incorporate updates, changes, effective dates and other pertinent information. For comparison purposes, a separate redline version has also been posted on the Handbook 4000.1 Information web page. The online version of Handbook 4000.1 is being updated and will be available soon.

Handbook 4000.1 is the comprehensive, authoritative source for Single Family Housing policy guidance for industry stakeholders doing business with FHA. It provides clear and concise policy and procedure requirements for all FHA Single Family Housing programs. FHA’s Office of Single Family Housing produces regular updates to ensure that Handbook 4000.1 remains the complete, single-source document for its latest policies, programs, and processes.

FHA INFO 2024-29 - FHA published Mortgagee Letter (ML) 2024-09, Updating FHA's Unique Entity Identifier (UEI) Requirements for FHA Eligibility.

May 16, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024- 09, Updating FHA’s Unique Entity Identifier (UEI) Requirements for FHA Eligibility. This ML updates FHA’s UEI policy for FHA-approved mortgagees as well as other entities seeking eligibility to conduct FHA business.

In August 2022, FHA implemented a UEI policy that required those doing or seeking to do business with the federal government, to register for, obtain, and maintain a UEI number in the General Services Administration’s (GSA) System for Award Management (SAM.gov). FHA is implementing this government-wide requirement at the direction of the GSA.

Today’s ML 2024-09 amends FHA’s eligibility requirements to remove the home office geographic address from data that must be the same in both the Lender Electronic Assessment Portal (LEAP) and SAM.gov. This change will streamline data reporting and support lender compliance by reducing potential contradictory information between the LEAP and SAM.gov platforms.

The revised provisions outlined in this ML apply to all FHA-approved mortgagees and those institutions seeking FHA approval, and is effective immediately.

This policy update will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2024-27 - Federal Register (FR) Final Rule, Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, [Docket No. FR-6272-F-02]

May 10, 2024 - On April 23, 2024, the Department of Housing and Urban Development’s (HUD) Office of Environment and Energy (OEE) published the final rule, Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, [Docket No. FR-6272-F-02] in the Federal Register.

HUD’s OEE invites FHA program participants to attend its webinar series on the final rule. This webinar series covers HUD’s new Federal Flood Risk Management Standard (FFRMS) Final Rule, published on April 23, 2024, which modifies HUD’s floodplain management regulations to better address flood risk.

The first session of the series provides background on FFRMS and comprehensive guidance on changes made to 24 CFR Part 55, including HUD’s FFRMS approach, limitations on HUD assistance in floodplains, exceptions to the Rule, and the eight-step decision-making process.

The second session of the series expands on changes made to 24 CFR Part 55, including protection of wetlands, flood insurance, notification of flood hazards, public posting, categorical exclusion and provides guidance on changes made to 24 CFR Part 200: Minimum Property Standards. Both presentations will be followed by a Q&A session.

Objectives

• Learn what is included the new 24 CFR Part 55 and Part 200.
• Understand how the FFRMS Floodplain is defined and other new terminology.
• Hear examples from the field about how changes to the new Final Rule will affect the environmental review process.

Audience

This webinar series is intended for HUD grantees, recipients, applicants, and associated stakeholders. Part two of the series is also intended for these stakeholders along with participants of Federal Housing Administration (FHA) single family programs covered under 24 CFR Part 200.

For FHA Single Family mortgage insurance programs, the final rule revises HUD’s Minimum Property Standards (MPS) to require that, for one- to four-unit mortgaged properties that are new construction and located in a Special Flood Hazard Area (SFHA), the lowest floor of the new construction be at least two feet above base flood elevation (BFE). This requirement adds two feet of additional elevation to FHA’s existing MPS requirement as a resilience standard, though many jurisdictions already require homes in SFHAs to be elevated one or more feet above BFE. The requirement does not apply to the rehabilitation of existing structures with 203(k) insured financing, or the purchase of manufactured homes insured under FHA Single Family programs.

Contact

For registration assistance, contact the FFRMS Final Rule Webinar Series Registrar at trainings@hudexchange.info

FHA INFO 2024-25 - Second Extension of the Foreclosure Moratorium in Connection with the Presidentially-Declared Major Disaster Area in Maui County, Hawaii (ML 2024-08)

May 3, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-08, Second Extension of the Foreclosure Moratorium in Connection with the Presidentially Declared Major Disaster Area in Maui County, Hawaii, that further extends its foreclosure moratorium for borrowers with FHA-insured mortgages in Maui County, Hawaii. This extension — which runs through August 4, 2024 — is effective immediately.

This extension recognizes the unprecedented disaster in Maui resulting from the August 2023 wildfires. Therefore, FHA has extended its moratorium to give borrowers with FHA-insured mortgages on properties located in Maui County more time to access federal, state, and/or local housing resources, and to consult with HUD-certified housing counselors, without the added burden of potential foreclosure actions.

Today’s ML also extends the deadlines for first legal action and reasonable diligence time frames to 90 days from the new August 4, 2024, moratorium date for foreclosures initiated on FHA-insured single family forward mortgages on properties in Maui County.

Additionally, mortgagees must extend the moratorium on foreclosures of FHA-insured Home Equity Conversion Mortgages (HECM) secured by properties located in Maui County. The foreclosure moratorium is applicable:

• only if the HECM is due and payable for reasons other than the death of the last remaining borrower and is not subject to a deferral period; and
• to the initiation of foreclosures, and foreclosures already in process.

Mortgagees and other stakeholders are encouraged to thoroughly read today’s ML 2024-08.

FHA INFO 2024-23 - Federal Register (FR), Notice of Final Determination, Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA-Financed Housing, [Docket No. FR-6271-N-03]

April 26, 2024 - Today, the Department of Housing and Urban Development’s (HUD) Office of Environment and Energy (OEE) and the U.S. Department of Agriculture (USDA) published a Notice of Final Determination, Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA-Financed Housing, [Docket No. FR-6271-N-03] in the Federal Register. This final determination fulfills a statutory requirement under the Energy Independence and Security Act of 2007 (EISA) that requires HUD and USDA to jointly adopt the most recently published energy efficiency standards for single family and multifamily homes, subject to an energy efficiency determination by the U.S. Department of Energy (DOE) and a cost-benefit housing “affordability and availability” test by HUD.

This final determination follows HUD and the USDA’s preliminary determination published on May 18, 2023. At the time the preliminary determination was developed, the most recent standards that DOE determined to be energy efficient were those promulgated by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), and the International Energy Conservation Code (IECC).

The updated energy standards will lower energy costs for owners of newly-constructed homes, benefitting homeowners, FHA, and communities. HUD expects this to be particularly beneficial for low-income and rural homeowners who typically face disproportionately high energy cost burdens.

Compliance dates for this final determination vary according to program type and will follow the implementation schedule described in Section VI of the notice. For FHA-insured Single-Family programs, the 2021 IECC will be applicable to new construction where building permit applications are submitted on or after the date that is eighteen months from the Notice’s effective date. For new construction occurring in persistent poverty rural areas, as defined by USDA Economic Research Service, the 2021 IECC will be applicable no later than 24 months after the Notice’s effective date. USDA will publish a map of rural areas covered by this extension no later than 30 days after the effective date of this notice.

FHA INFO 2024-22 - Federal Register (FR) Notice, Home Equity Conversion Mortgage (HECM) for Purchase-Acceptable Monetary Investment Funding Sources and Interested Party Contributions (IPCs), [Docket No. 6382-N-02] and Mortgagee Letter 2024-06, Home Equity Conversion Mortgage (HECM) Program – Updates to Acceptable Monetary Investment Funding Sources

April 26, 2024 - Today, the Federal Housing Administration (FHA) published a Federal Register (FR) Notice, Home Equity Conversion Mortgage (HECM) for Purchase-Acceptable Monetary Investment Funding Sources and Interested Party Contributions (IPCs) (Docket 6382-N-02) and supporting Mortgagee Letter (ML) 2024-06, Home Equity Conversion Mortgage (HECM) Program – Updates to Acceptable Monetary Investment Funding Sources.

This FR Notice and ML revise some of the policy updates proposed for the HECM for Purchase program in a prior FR Notice, dated October 24, 2023, and published in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) update, dated October 31, 2023, which were originally scheduled to become effective on April 29, 2024.

After careful consideration of public comments received during the comment period in which some industry stakeholders raised significant concerns regarding potentially negative borrower impacts, FHA decided to not proceed with some of its planned updates to the HECM for Purchase program.

Consistent with the October 24, 2023, FR Notice, FHA will move forward with its proposal that permits contributions by the property seller, real estate agent, builder, or developer to HECM for Purchase borrowers’ closing costs. However, at this time, FHA will not allow mortgagees and third-party originators (TPO) to make such IPCs, nor will it allow premium pricing to qualify as an eligible funding source to meet the borrower’s minimum required investment. The FR Notice and ML that FHA is issuing today also restores FHA’s previous policy that discount points and interest rate buydowns are not allowable closing costs.

Background

The HECM for Purchase program is a reverse mortgage financing option that allows eligible seniors to finance the purchase of a new principal residence and obtain a HECM in a single transaction. Like a traditional HECM, borrowers are not required to make monthly mortgage payments if they live in the home, but must pay their property taxes, homeowners’ insurance, maintenance costs, and any required fees such as homeowner association (HOA) fees.

A HECM for Purchase loan allows a senior to acquire a primary residence and reduce their housing expenses by eliminating the principal and interest payment on their mortgage, helping seniors looking to relocate, downsize, move closer to their family, or increase their cash flow to supplement their income.

A HECM for Purchase loan can be difficult to obtain since the borrower is buying a new home, which will have limited equity, and therefore, requires the borrower to put forward an often significant minimum required investment.

FHA has explored ways to reduce this burden while also ensuring the program remains safe and sound and that the borrower is fully protected. FHA believes allowing some interested parties to contribute to closing costs is a prudent way to expand access to the program. FHA will continue to evaluate the HECM for Purchase market and assess the need for flexibility to enhance the program.

Effective Date and Resources

The FR Notice and ML are effective for all HECM case numbers assigned on or after April 29, 2024. All other changes previously announced in the October 24, 2023, FR Notice and October 31, 2023, Handbook 4000.1 update, remain unchanged.

Additionally, the following model loan documents have been updated to align with the provisions of today’s ML. They are available on the Single Family Model Documents web page:

• HECM ARM Payment Plan
• HECM Fixed Rate Payment Plan
• HECM Schedule of Closing Costs

The policy updates in the ML will be incorporated into a future version of the Handbook 4000.1.

FHA INFO 2024-21 - Federal Register (FR), Revision of Investing Lenders and Investing Mortgagees Requirements and Expansion of Government-Sponsored Enterprises Definition, [Docket No. FR-6291-F-02]

April 23, 2024 - Today, the Federal Housing Administration (FHA) published a final rule, Revision of Investing Lenders and Investing Mortgagees Requirements and Expansion of Government-Sponsored Enterprises Definition (Docket No. FR-6291-F-02).

This final rule revises and clarifies requirements for investing lenders and mortgagees to gain or maintain status as an FHA-approved lender or mortgagee, separately defines Government Sponsored Enterprises (GSEs) and the Federal Home Loan Banks (FHLBs) from other governmental entities and aligns general FHA approval standards with current industry business practices. These changes are largely designed to provide for more precise language and definitions reflecting investing lenders’ or mortgagees’ limited participation in FHA programs and does not represent a significant departure from existing requirements for most lenders and mortgagees originating, endorsing, or servicing FHA-insured loans and/or mortgages.

This final rule takes into consideration comments received in response to the proposed rule published in the Federal Register (FR) on July 18, 2023, as announced in FHA INFO 2023- 57.

The provisions in this final rule become effective on May 23, 2024. FHA will soon publish a Mortgagee Letter (ML) that provides implementation guidance for the provisions in the final rule.

FHA INFO 2024-20 - Federal Register (FR), Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, [Docket No. FR-6272-F-02]

April 23, 2024 - Today, the Department of Housing and Urban Development’s (HUD) Office of Environment and Energy (OEE) published the final rule, Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, [Docket No. FR-6272-F-02] in the Federal Register.

This final rule revises HUD’s regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS) in accordance with the Executive Order 13690 "Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input”.

For FHA Single Family mortgage insurance programs, the final rule revises HUD’s Minimum Property Standards (MPS) to require that, for one- to four-unit mortgaged properties that are new construction and located in a Special Flood Hazard Area (SFHA), the lowest floor of the new construction be at least two feet above base flood elevation (BFE). This requirement adds two feet of additional elevation to FHA’s existing MPS requirement as a resilience standard, though many jurisdictions already require homes in SFHAs to be elevated one or more feet above BFE. The requirement does not apply to the rehabilitation of existing structures with 203(k) insured financing, or the purchase of manufactured homes insured under FHA Single Family programs.

The final rule’s higher flood elevation standard in the MPS will apply to new construction where building permit applications are submitted on or after January 1, 2025. FHA will publish a Mortgagee Letter (ML) that provides implementation guidance for the provisions in the final rule that impact its Single Family mortgage insurance programs.

Refer to the final rule for specific compliance dates.

HUD’s OEE will host webinars to provide additional information on the FFRMS and its implementation. Additional details will be provided in a future FHA INFO.

For more information, read today's press release.

FHA INFO 2024-15 - FHA Extends Temporary Regulatory and Handbook Waivers Related to Alternative Methods for Face-to-Face Meetings with Borrowers

April 4, 2024 - Today, the Federal Housing Administration (FHA) published extensions to its temporary regulatory waiver and related Single Family Housing Policy Handbook 4000.1 waiver, which allow mortgagees to utilize alternative methods for conducting meetings with borrowers in accordance with FHA’s early default intervention requirements. These alternatives provide practical and useful methods for conducting meetings with borrowers while ensuring they still receive needed information directly from their mortgage servicer.

FHA initially published temporary partial waivers of these requirements on March 13, 2020, and previously extended them through May 31, 2024. On July 31, 2023, HUD published the proposed rule, Modernization of Engagement with Mortgagors in Default [Docket No. FR-6353- P-01] and is in the process of reviewing the public comments received and finalizing the rule and associated implementation guidance. FHA is now extending the waivers through January 1, 2025, unless the final rule amending 24 CFR § 203.604 and a Mortgagee Letter or Handbook 4000.1 update amending Section III.A.2.h.xii. become effective sooner.

For the details, read the temporary regulatory waiver and Handbook 4000.1 waiver.

FHA INFO 2024-13 - Federal Register (FR), Mortgagee Review Board: Administrative Actions [Docket No. FR-6455-N-01]

March 29, 2024 - Today, the Federal Housing Administration (FHA) published in the Federal Register (FR), Mortgagee Review Board: Administrative Actions [Docket No. FR-6455-N-01].

This FR Notice is the annual notification of all completed administrative actions taken by the Department of Housing and Urban Development’s (HUD) Mortgagee Review Board from October 1, 2022, through September 30, 2023, where settlement agreements have been reached, civil money penalties were imposed, or FHA participation was terminated as of December 9, 2023.

The FR Notice provides a description of, and the cause for, the Mortgagee Review Board’s administrative actions against HUD-approved mortgagees in 54 fact-based cases; five cases where mortgagees failed to timely obtain a required Unique Entity Identifier; and 15 mortgagees that had annual recertification violations and were withdrawn from the program for one year.

Read the entire FR Notice by viewing the Mortgagee Review Board: Administrative Actions on www.federalregister.gov.

FHA INFO 2024-12 - Frequently Asked Question on Seller-Paid Commissions Related to the National Association of REALTORS® Settlement

March 28, 2024 - Today, the Federal Housing Administration (FHA) published Frequently Asked Questions (FAQs) that address inquiries received from stakeholders regarding payment of real estate agent commissions related to the recently announced nationwide settlement agreement proposed by the National Association of REALTORS®.

Since its announcement, FHA has received questions from its stakeholders regarding how the proposed settlement agreement will affect the treatment of seller-paid buyer real estate broker fees in transactions using FHA-insured mortgage financing.

Under existing FHA policy, if sellers continue to pay buyer-side real estate agent commissions and fees as a manner of state and local law or custom, and if the commissions and fees are reasonable in amount, existing policy would not treat those payments as interested party contributions provided all other requirements are met.

FHA will continue to monitor the real estate marketplace for changes resulting from the settlement for potential impacts to its policies and will address additional questions as they develop.

Contact the FHA Resource Center as referenced below with additional questions.

FHA INFO 2024-11 - FHA Catalyst: Claims Module Information on Payment Supplement XML Requirements and Mortgagee-ID Reminder

March 25, 2024 - The Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-02 on February 21, 2024, which introduced the new Payment Supplement loss mitigation option.

To support the implementation of ML 2024-02, FHA has updated its Claims Module for Claim Type 33 - Payment Supplement. Mortgagees must use FHA’s newly updated claims XML v1.8 for Payment Supplement bulk submissions starting May 1, 2024. Mortgagees may continue to use the current XML v1.7 for all other claims submissions.

For more information on implementing the XML v1.8 for bulk submissions in FHA Catalyst, view the FHA Catalyst: Claims Module – Single Family Forward Claims Required Fields Summary and Claims Bulk Submission XML Input File available on the FHA Catalyst: Claims Module webpage.

Reminder: Mortgagee-ID Requirement for Users of All FHA Catalyst Modules

For security purposes, all Single Family FHA Catalyst users must be registered users of FHA Connection and have an active Mortgagee-ID (M-ID) as part of their FHA Catalyst profile. An FHA Catalyst mortgagee administrator must enter an M-ID into a user’s FHA Catalyst profile as well as grant access to FHA Connection to obtain an M-ID for users currently without one.

Consistent with FHA INFO 2023-50, the M-ID requirement does not apply to FHA Catalyst: Claims Module users identified as “Contractors” in their FHA Catalyst profile.

FHA INFO 2024-09 - Changes in Branch Office Registration Requirements (ML 2024-04)

March 19, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-04, Changes in Branch Office Registration Requirements. This ML provides lenders and mortgagees with guidance to implement the provisions of the final rule, Changes in Branch Office Registration Requirements [Docket No. FR-6321-F-02] published on February 2, 2024.

This final rule eliminated the requirement for FHA lenders and mortgagees to register branch offices in order to conduct FHA Title I or Title II loan originations.

The provisions of this ML are effective immediately and apply to all lenders and mortgagees approved for FHA Title I and/or Title II programs.

Please note that the changes in the ML do not affect the recertification for those lenders and mortgagees whose fiscal year ended December 31, 2023. Recertification fees for these institutions will be calculated based on the number of registered branches as of the last business day of their fiscal year-end certification period.

These policy updates will be incorporated into a future version of Single Family Housing Policy Handbook 4000.1.

Refer to the February 2, 2024 rule and accompanying FHA INFO 2024-01, and FHA INFO 2024-02, of February 15, 2024 for additional information.

FHA INFO 2024-08 - Updated Title I Manufactured Home Loan Limits (Title I Letter (TIL) 488)

March 18, 2024 - Today, the Federal Housing Administration (FHA) published Title I Letter (TIL) 488, Updated Title I Manufactured Home Loan Limits. This TIL implements and provides lenders offering Title I Manufactured Homes loans with revised loan limits calculated under the final rule, Indexing Methodology for Title I Manufactured Home Loan Limits (Docket No. FR-6207-F-02), published in the Federal Register on February 28, 2024.

The final rule establishes indexing methodologies to calculate future loan limits for Manufactured Home Loans, Manufactured Home Lot Loans, and Manufactured Home and Lot Combination Loans for the Title I Manufactured Home Loan program.

As a result of this new indexing methodology, Title I Manufactured Home nationwide loan limits will be adjusted as follows, for FHA case numbers assigned on or after March 29, 2024:

These new loan limits more accurately reflect real-world costs of manufactured homes and improve the viability of the Title I Manufactured Housing program in meeting the financing needs of manufactured home buyers.

These loan limits will be reviewed annually and adjusted if needed; however, HUD will not lower the loan limits from the previous year.

These policy updates will be incorporated into a future version of Single Family Housing Policy Handbook 4000.1.

FHA INFO 2024-05 - FR Final Rule: Indexing Methodology for Title I Manufactured Home Loan Limits [Docket No. FR-6207-F-02]

February 29, 2024 - Today, the Federal Housing Administration (FHA) is announcing the publication of its final rule, Indexing Methodology for Title I Manufactured Home Loan Limits (Docket No. FR-6207-F-02).

This rule establishes indexing methodologies using data from the U.S. Census Bureau to annually calculate the loan limits for its Title I Manufactured Home Loan Program, which provides insurance on loans for manufactured homes titled as personal property. The methodologies introduced through this rule are intended to expand the financing options for borrowers seeking to purchase or refinance a manufactured home.

This final rule takes into consideration comments received in response to FHA’s October 18, 2022 proposed rule. The indexing methodologies in the final rule will allow FHA to annually calculate and adjust Title I Manufactured Home Loan Program loan limits using sales data compiled by the Census Bureau as follows:

1. Manufactured Home Loan (Home Only):
   • For single-section homes, the loan limit will be set at 115 percent of the average single-section manufactured home price, with future indexing based on movement in single-section home prices; and
   • For manufactured homes composed of two or more sections (multi-section homes), the loan limit will be set at 115 percent of the average new double-section home price with future indexing based on movement in double-section home prices.
   • For single and multi-section homes, an inflation factor such as the Consumer Price Index for all Urban Consumers (CPI-U) from the President’s Economic Assumptions will be used to account for inflation that has occurred since the relevant Census data were collected. This will enable FHA’s loan limits to accord with current market prices more accurately for manufactured homes.
2. Manufactured Home Lot Loan (Lot Only):
   • Manufactured Home Lot Loan limit is established by the Housing and Economic Recovery Act of 2008 (HERA), index using changes in the median new home price, which includes the value of the lot. 3. Manufactured Home and Lot Loan (Combination Loan):
   • The limits for the Manufactured Home and Lot loan will be calculated using the indexed Manufactured Home Lot Loan limit, plus the applicable Manufactured Home Loan limit.

These indexing methodologies will more accurately reflect real-world costs of manufactured homes and improve the viability of the Title I Manufactured Housing program in meeting the financing needs of manufactured homebuyers. The provisions in this final rule become effective on March 29, 2024.

FHA will soon publish a Title I Letter that provides implementation guidance for the provisions in the final rule which will include the new loan limits for calendar year 2024. For more information, read today’s press release.

FHA INFO 2024-03 - Payment Supplement (ML 2024-02)

February 21, 2024 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2024-02, Payment Supplement. This ML establishes FHA’s new Payment Supplement loss mitigation home retention solution designed to help additional borrowers avoid foreclosure and retain their homes when other FHA home retention options are unable to generate a sustainable monthly mortgage payment reduction.

The Payment Supplement allows servicers to bring the borrower’s mortgage current and temporarily reduce the principal portion of their monthly mortgage payment for a term of three years without modifying the mortgage. The Payment Supplement is only repaid when the borrower sells or refinances the home, or the mortgage is otherwise extinguished. When implemented, the Payment Supplement will be a permanent addition to FHA’s loss mitigation tools and will be incorporated into future revisions to FHA’s loss mitigation waterfall.

This final policy takes into consideration feedback received by stakeholders on the draft MLs and Disclosures that were posted on Single Family’s Drafting Table as announced in FHA INFOs 2023-44, 2023-94, and 2023-98.

FHA is also announcing the availability of the following new Payment Supplement documents, which are located on the Single Family Model Documents web page on hud.gov:

• Annual Payment Supplement Disclosure
• Final Payment Supplement Disclosure
• Payment Supplement Agreement Rider
• Payment Supplement Promissory Note and Payment Supplement Security Instrument.

FHA is also providing a Payment Supplement Calculation Worksheet available on the FHA SF Loss Mitigation web page as a tool to assist servicers in calculating the Payment Supplement.

Mortgage servicers may implement Payment Supplement into their operations beginning May 1, 2024, but must implement this solution by January 1, 2025.

The policy updates in this ML will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2024-02 - Frequently Asked Questions for Branch Registration Requirements Now Available

February 15, 2024 - Today, FHA published Frequently Asked Questions (FAQs) that address inquiries received from stakeholders regarding its final rule, Changes in Branch Office Registration Requirements published in the Federal Register on February 2, 2024. This regulation eliminated the current requirement for lenders and mortgagees to register branch offices where they originate FHA Title I or Title II loans.

Since its publication, FHA has received several questions from stakeholders. The most frequent question was whether the new branch office registration rule impacts lender approval recertifications for lenders and mortgagees whose fiscal year ended on December 31, 2023.

This new rule — which becomes effective on March 4, 2024 — is not applicable for those institutions whose fiscal year ended on December 31, 2023, and are required to recertify by March 31, 2024. Recertification fees for those lenders will be calculated based on the number of registered branches as of the last business day of their fiscal year-end certification period.

Refer to the rule and accompanying FHA INFO 2024-01 dated February 2, 2024, for information on the rule.

FHA will also soon publish a Mortgagee Letter (ML) that provides implementation guidance for the provisions in the rule.

FHA INFO 2024-01 - FR Final Rule: FHA Removes Mandatory Branch Registration Requirement [Docket No. FR-6321-F-02]

February 2, 2024 - Today, the Federal Housing Administration (FHA) published a final rule in the Federal Register, Changes in Branch Office Registration Requirements [Docket No. FR-6321-F02]. This regulation eliminates the current requirement for mortgagees and lenders to register the branch offices where they conduct FHA Title I or Title II loan originations. This final rule takes into consideration comments received in response to the proposed rule that was published on March 1, 2023.

As the mortgage industry has evolved to better leverage technology and remote service delivery, FHA believes that requiring a mortgagee or lender to register all branches is an unnecessary administrative and cost impediment to program participation. By removing these barriers, FHA hopes to incentivize additional community-based mortgage loan originators, credit unions, and others to offer FHA-insured loan products in branch offices that they did not previously register due to business volume considerations, thus expanding the availability of FHA programs to underserved communities.

This final rule:

• Revises 24 CFR 202.5(k) to give mortgagees and lenders the option to register all branch offices; and
• Makes fees applicable only to branch offices that mortgagees or lenders register with FHA, rather than applying fees to each branch authorized to originate Title II mortgages or Title I loans. Branch offices not registered with the Department of Housing and Urban Development (HUD) are not subject to branch registration fees and will be excluded from the HUD Lender List Search page.

Removing the requirement to register branch offices will not affect HUD’s monitoring of lenders and mortgagees. HUD will continue to maintain oversight and risk management of lenders and mortgagees that remain responsible to FHA for the actions of its branch offices and employees.

The provisions in this final rule become effective on March 4, 2024.

FHA will soon publish a Mortgagee Letter (ML) that provides implementation guidance for the provisions in the final rule.

FHA INFO 2023-100 - FHA Introduces New Single Family Housing Policy Handbook 4000.1 Training Modules

December 13, 2023 - Now available on the Federal Housing Administration’s (FHA) Single Family Housing Events and Training web page under Single Family Housing Self-Paced, Pre-Recorded Training are two new training modules that provide insight into the now-completed Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), the comprehensive, consistent, single policy source for the FHA Single Family Housing program.

The first self-paced training module — the Single Family Housing Policy Handbook (Handbook 4000.1) Overview — is an evergreen presentation that walks new and/or existing stakeholders needing a refresher through Handbook 4000.1’s structure and style. It is designed to help viewers understand its benefits, where to access it online, how to read Mortgagee Letters (ML) in context, and how to locate content updates.

The second self-paced training module — the Home Equity Conversion Mortgages (HECM) Origination and Servicing Overview — focuses solely on the newest and final Handbook 4000.1 section that was released on October 31, 2023, and announced in a press release and FHA INFO 2023-84. It begins with a review of the new HECM section’s style and structure — which is consistent with the rest of Handbook 4000.1 — for HECM originators, servicers, and other interested parties. Additionally, it provides viewers with an overview of some of the more recent HECM policy updates that have been incorporated into this new Handbook section, making it easier for HECM originators and servicers to locate the information needed to do with business with FHA in one place.

Handbook 4000.1 is the authoritative source for all Single Family Housing policy and program guidance and will be updated on a regular basis to ensure its relevance in perpetuity.

Additionally, Handbook 4000.1 training modules will be added and/or updated as needed.

FHA INFO 2023-99 - Updates to the Home Equity Conversion Mortgage Program (ML 2023-23)

November 30, 2023 - Today, the Federal Housing Administration (FHA) published Mortgage Letter (ML) 2023-23, Updates to the Home Equity Conversion Mortgage Program. This ML updates and streamlines Home Equity Conversion Mortgage (HECM) servicing policy to enhance the program's financial stability and improve overall performance. These changes reinforce FHA’s commitment to serving seniors choosing to age in place in their own homes through the HECM program.

The final policies in this ML take into consideration industry feedback received on the draft ML posted on the Single Family Housing Drafting Table for industry feedback and announced in FHA INFO 2023-85 on November 1, 2023. The updates include, but are not limited to:

• Allowing mortgage servicers to contact borrowers by phone to verify occupancy for the program’s required annual occupancy certification;
• Allowing outstanding homeowner’s association dues to be included in the calculation of a repayment plan for borrowers who are behind on their HECM financial obligations;
• Expanding the ability of mortgage servicers to work with borrowers who are behind on their property taxes or hazard insurance by an amount up to $5,000 without calling the mortgage due and payable;
• Allowing mortgage servicers to assign a HECM to the Department of Housing and Urban Development (HUD) after the servicer has funded a cure for a borrower’s delinquent financial obligations, so long as the borrower has made all property charge payments for one year and all other assignment eligibility criteria are met;
• Aligning post-Due and Payable appraisal requirements for all HECMs;
• Modifying the maximum arrearage amount for mortgagees when electing to delay requesting approval to call a HECM Due and Payable;
• Expanding and updating the criteria for payment of Cash for Keys;
• Streamlining requirements for executing alternatives to foreclosure and updating existing incentive payments for successful completion of loss mitigation options; and
• Providing a new incentive payment to mortgage servicers for completing these alternatives.

FHA has updated its website to include a consolidated source for accessing the HECM statutory maximum claim amount by year to support the implementation of the payment of incentives permitted by the ML. View the HECM Statutory Maximum Claim Amount by Year web page to access these amounts.

These policy updates will be incorporated into a future version on the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

The provisions of this ML apply to all FHA-insured HECMs and are effective based on the dates in the ML.

FHA INFO 2023-96 - FHA 2024 Nationwide Single Family Forward and HECM Mortgage Limits

November 28, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2023-21, 2024 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. These new loan limits are effective for case numbers assigned on or after January 1, 2024.

FHA’s “floor” and “ceiling” loan limits will increase from $472,000 and $1,089,300 in Calendar Year (CY) 2023 to $498,257 and $1,149,825 [1] in CY 2024, respectively, for a one-unit property.

The following table lists the CY 2024 FHA loan limit thresholds for low-cost and high-cost areas:

Mortgagees may view the list of areas at the “ceiling” and areas with limits between the “floor” and “ceiling” — along with lists that can be sorted by state, county, or Metropolitan Statistical Area (MSA) or by calendar year — on the Maximum Mortgage Limits web page.

CY 2024 loan limits for FHA-insured Title II forward mortgages will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). [1]Alaska, Hawaii, Guam, and the U.S. Virgin Islands are subject to a higher “ceiling.” See Mortgagee Letter for details.

FHA 2024 Nationwide Home Equity Conversion Mortgage Limits Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2023-22, 2024, Nationwide Home Equity Conversion Mortgage (HECM) Limits, which provides the Calendar Year (CY) 2024 maximum claim amount for FHA-insured traditional HECM, HECM for purchase, and HECM-to-HECM refinances.

The maximum claim amount for FHA-insured HECMs for all areas, including Alaska, Hawaii, Guam, and the U.S. Virgin Islands, in CY 2024 will be $1,149,825; 150 percent of the Federal Home Loan Mortgage Corporation’s (Freddie Mac) national conforming limit of $766,550. This new maximum claim amount applies to case numbers assigned on or after January 1, 2024.

The CY 2024 maximum claim amount for FHA-insured HECMs will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

FHA INFO 2023-95 - FHA to Require Multi-Factor Authentication for Login Access to FHA Connection and Its Applications

November 17, 2023 - Beginning November 27, 2023, the Federal Housing Administration (FHA) will implement security enhancements that will require the use of multi-factor authentication (MFA) when accessing FHA Connection (FHAC) and its applications.

The MFA is designed to provide an added layer of security to verify an end user's identity when they sign into FHAC and supporting systems. Implementing the MFA reduces the risks of compromised passwords and enables greater security without compromising the user experience.

To aid users in transitioning to FHAC MFA login, a user manual and supporting video have been developed to provide set-up and other MFA user guidance. In addition to FHAC, the following systems will also require MFA login beginning November 27, 2023:

• Loan Review System (LRS)
• Neighborhood Watch
• Lender Electronic Assessment Portal (LEAP)
• Credit Alert Verification Reporting System (CAIVRS)

This change does not impact Business-to-Government (B2G) users of FHAC.

FHA INFO 2023-93 - FHA Issues Corrected Mortgagee Letter: Update to Property Inspection Fees

November 16, 2023 - Today, the Federal Housing Administration (FHA) republished Mortgagee Letter (ML) 2023- 20, Update to Property Inspection Fees, due to an inadvertent error in the Affected Programs section of the ML.

The list of Affected Programs inadvertently omitted Home Equity Conversion Mortgages (HECMs) even though the HECM program, in addition to the forward mortgage program, utilizes the fee schedule found in the Single Family Housing Policy Handbook 4000.1, Appendix 7.0 Property Preservation Allowances and Schedules. Therefore, the ML has been corrected to ensure the list of Affected Programs properly accounts for the changes this will make for the HECM program as well.

The effective date for the revised property preservation inspection fees of November 14, 2023, remains unchanged. Stakeholders are encouraged to access the corrected version of ML 2023-20.

FHA INFO 2023-92 - FHA's Annual Report to Congress on the Mutual Mortgage Insurance Fund Published Today

November 15, 2023 - Today, the Federal Housing Administration (FHA) released its annual report to Congress on the financial status of FHA’s Mutual Mortgage Insurance Fund (MMI Fund) covering FHA’s Title II Single Family Mortgage Insurance programs for fiscal year (FY) 2023. As detailed in the report:

• The percentage of first-time homebuyers using FHA insurance was 82.21 percent of total FHA forward mortgage purchase endorsements.
• The share of mortgages insured by FHA to borrowers of color reached 30.63 percent of all FHA forward mortgage insurance endorsements.
• The MMI Fund’s overall Capital Ratio as of September 30, 2023, is 10.51 percent, a slight decrease of 0.60 percentage points from the previous year.
• The performance of the forward book of business posted a stand-alone capital ratio of 10.20 percent, decreasing by 0.27 percentage points from FY 2022.
• The Home Equity Conversion Mortgage (HECM) portfolio stand-alone capital ratio stands at 16.72 percent, a decrease of 6.05 percentage points from FY 2022.
• FHA’s serious delinquency rate as of September 30, 2023, was 3.93 percent. This is a decrease of 7.97 percentage points from the peak of 11.90% experienced in November 2020 and is similar to the rate prior to the onset of the COVID-19 pandemic.

Read today’s Press Release and Annual Report for more information.

FHA INFO 2023-91 - Update to Property Inspection Fees (ML 2023-20)

November 14, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023- 20, Update to Property Inspection Fees. This ML updates the amounts allowable for property inspection fees for property preservation and protection to align with industry standards.

FHA is updating allowable inspection fees to increase compensation for inspections that determine a property’s occupancy status and ensure servicer implementation of required property protections. Property inspections after default and throughout the foreclosure process allow lenders to quickly identify vacant properties so they may quickly take necessary steps to preserve and protect those properties and ensures surrounding neighborhoods are protected from blight that may arises from inadequately maintained unoccupied homes. The increased compensations recognizes that inspection costs have risen, and FHA is moving to better align with industry standards for these critical inspections.

This policy update will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

The provisions of this ML are effective immediately.

For more information, read today’s press release.

FHA INFO 2023-89 - FHA Implements System Enhancements to Accommodate Accessory Dwelling Unit Loan Processing

November 7, 2023 - On October 16, 2023, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-17, Revisions to Rental Income Policies, Property Eligibility, and Appraisal Protocols for Accessory Dwelling Units, which provided expanded financing options for borrowers seeking to purchase properties with an existing accessory dwelling unit (ADU), rehabilitate existing structures to add ADUs, or construct new homes with ADUs.

To support changes announced in the ML, FHA is enhancing its FHA Connection (FHAC) system by adding:

• An “Accessory Dwelling Unit” Yes/No indicator field to the Case Number Assignment, Insurance Application, Home Equity Conversion Mortgage (HECM) Financial Assessment, and HECM Insurance Application screens.
  • Lenders must use this field to indicate that the property is a one-unit with an ADU. If lenders do not indicate “Yes,” the default value will be “No.”
• An “Amount of Total Income Derived from ADU” field to the Forward Loan Insurance Application, HECM Financial Assessment, and HECM Insurance Application screens.
  • Lenders must use this field to indicate the dollar amount of ADU rental income that is included in Total Income.
• A “Limited or No History of ADU Income” checkbox to the Forward Loan Insurance Application, HECM Financial Assessment, and HECM Insurance Application screens.

This new functionality will be available for use beginning Friday, November 17, 2023, and must be used for transactions on properties with ADUs by December 4, 2023.

The Business-to-Government (B2G) Interface is available immediately but must be used for transactions with an ADU by January 14, 2024. Refer to the B2G Interface webpage for technical requirements.

FHA INFO 2023-88 - FHA Extends Temporary Regulatory and Handbook Waivers: Alternative Methods for Face-to-Face Interviews with Borrowers

November 6, 2023 - Today, the Federal Housing Administration (FHA) published extensions to its temporary regulatory waiver and related Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) waiver, which allow mortgagees to utilize alternative methods for conducting meetings with borrowers in accordance with FHA’s early default intervention requirements. These alternatives provide practical and useful methods for conducting non-contact interviews with borrowers while ensuring they still receive needed information directly from their mortgage servicer.

FHA initially published temporary partial waivers of these requirements on March 13, 2020, and previously extended them through December 31, 2023. FHA is now extending the waivers through May 31, 2024.

For the details, read the temporary regulatory waiver and Handbook 4000.1 waiver.

FHA INFO 2023-87 - Extension of the Foreclosure Moratorium in Connection with the Presidentially-Declared Major Disaster in Maui County, Hawaii (ML 2023-19)

November 2, 2023 - Today, the Federal Housing Administration (FHA) is announcing that it is extending the foreclosure moratorium for borrowers with FHA-insured mortgages in Maui County, Hawaii. FHA is providing this extension in recognition of the unprecedented challenges facing borrowers with FHA-insured mortgages following the August 2023 wildfire disaster in Maui.

The extension will give impacted borrowers more time to consult with mortgage servicers and housing counselors, and to access federal, state, and/or local housing resources without having to contend with the burden of an impending foreclosure action.

FHA’s automatic 90-day foreclosure moratorium for the Federal Emergency Management Agency (FEMA) Hawaii Wildfires (DR-4724-HI) declaration was originally set to expire on November 8, 2023. With today’s Mortgagee Letter 2023-19, Extension of the Foreclosure Moratorium in Connection with the Presidentially-Declared Major Disaster in Maui County, Hawaii, FHA is instructing mortgage servicers to halt all foreclosure actions in Maui County through at least May 6, 2024.

Borrowers in Maui County with FHA-insured mortgages impacted by the wildfires should contact their mortgage servicer immediately for assistance. Borrowers can also obtain additional assistance in the following ways:

• Visit the FHA Disaster Relief site or call the FHA Resource Center at 1-800-304-9320 to learn more about disaster relief options.
• Contact a HUD-approved housing counseling agency. These agencies have counselors available to assist those impacted by natural disasters in determining assistance needs and identifying available resources. Homeowners can find a HUD approved housing counseling agency online or use HUD’s telephone look-up tool by calling (800) 569-4287.The telephone look-up tool includes access to information in more than 250 different languages. You do not have to have an FHA-insured mortgage to meet with a HUD-approved housing counseling agency. There is never a fee for foreclosure prevention counseling.
• For borrowers whose homes are destroyed or damaged to an extent that requires reconstruction or complete replacement, contact an FHA-approved lender about FHA’s Section 203(h) Mortgage Insurance for Disaster Victims program. This program provides FHA insurance to disaster victims who may be eligible for 100 percent financing, including closing costs.
• For borrowers seeking to purchase and/or repair a home that has been damaged, contact an FHA-approved lender about FHA’s Section 203(k) Rehabilitation Mortgage Insurance program. This program allows individuals to finance the purchase or refinance of a house along with its repair, through a single mortgage. Homeowners can also finance the rehabilitation of their existing homes if damaged.

FHA INFO 2023-86 - Update to the Sales Comparison Approach for Manufactured Housing (ML 2023-18)

November 2, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-18, Update to the Sales Comparison Approach for Manufactured Housing. This ML updates the policy exception announced in ML 2020-48, that established an exception to the traditional comparable sales selection requirements for manufactured homes certified under the Government Sponsored Enterprises (GSE) Fannie Mae’s MH Advantage™ and Freddie Mac’s CHOICEHome® programs.

This update now requires appraisers to use the most appropriate site-built-home comparable sales when there are less than two comparable sales of these GSE-certified manufactured homes available.

This ML aligns FHA appraisal requirements with those of other industry participants, providing more precision in determining an appraised value for these homes, which in turn will expand flexibilities for borrowers seeking FHA-insured mortgages on these properties. This update supports FHA’s efforts to increase the availability and affordability of manufactured housing and further aligns FHA policy with the Biden-Harris Administration’s Housing Supply Action Plan.

The provisions of this ML are effective immediately and apply to mortgages insured under FHA’s Title II Single Family forward and reverse mortgage programs.

These policy updates will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

For more information, read today’s press release.

FHA INFO 2023-84 - New Home Equity Conversion Mortgage Sections of Single Family Housing Policy Handbook 4000.1 Published Today

October 31, 2023 - Today, the Federal Housing Administration (FHA) announced the publication of consolidated Home Equity Conversion Mortgage (HECM) sections of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). Through this update, Handbook 4000.1 now contains policies for the entire FHA Single Family Housing Program, including comprehensive and authoritative policies for the HECM program.

The new HECM sections consolidate existing program guidance currently found in over 100 Mortgagee Letters, various handbooks, the HECM Financial Assessment and Property Charge Guide, and various other policy materials. The sections contain revisions to policy for clarity, consistency, and to conform to the published Handbook 4000.1 organizational structure.

The new sections of the Single Family Handbook are:

• Section II.B, covering FHA policy for the origination through post-closing and endorsement of HECMs; and
• Section III.B, covering FHA policy for the servicing of HECMs.

The changes in the HECM sections may be implemented immediately but must be implemented by April 29, 2024, as described in the Transmittal.

Stakeholders are encouraged to review and familiarize themselves with the HECM sections in Handbook 4000.1 in their entirety.

Additional resources

• HECM model documents have been updated and are available on the Single Family Model Documents web page.
• Frequently Asked Questions, technology updates, training, and the online version of the full Handbook 4000.1 with the new HECM sections, will be available soon and communicated through an FHA INFO.

FHA INFO 2023-83 - FHA Implements Multi-Factor Authentication for the Systems Supporting its Single Family Real Estate Owned and Nonprofit Programs; Reminder Regarding Use of FHA Connection for Case Cancellations and Reinstatements

October 25, 2023 - On the evening of October 27, 2023, the Federal Housing Administration (FHA) will begin implementing security enhancements that will require the use of multi-factor authentication (MFA) to access certain of its websites and systems. The MFA provides an added layer of security beyond that of just a password. Implementing the MFA reduces the risks of compromised passwords and enables greater security without compromising the user experience. MFA is being implemented in the following systems:

• FHA’s Asset Disposition and Management System (P260) used by mortgagees, servicers, servicing contractors, and appraisers;
• Nonprofit Data Management System (NPDMS) used by HUD-approved Nonprofits; and
• HUD Homestore, which is utilized by the public and real estate agents. This site also includes the application for real estate agents or HUD-approved Nonprofits applying for a Name and Address Identification (NAID).

If you are not prompted at login to update your username and create a new password, then you may need to register as a first-time user. Your email address will be your username.

Additional information on registration and use of these new MFA requirements can be found at: P260 release notes.

MFA requirements for additional FHA systems will be announced in the upcoming weeks.

Reminder Regarding Use of FHA Connection for Case Cancellations and Reinstatements

The Federal Housing Administration (FHA) is reminding lenders of the functionality in the FHA Connection (FHAC) system to process their case cancellations and reinstatements through the Case Cancel/Reinstate Screen, or the Business to Government (B2G) Interface, as announced in FHA INFO 2023-65.

FHAC Application Coordinators must grant authority to users responsible for performing the Case Cancellation and Reinstatement functions.

This new functionality becomes mandatory for use on November 7, 2023, through the FHAC web interface. Lenders using the B2G Interface will have until January 22, 2024, to complete implementation.

FHA INFO 2023-82 - Federal Register (FR) Notice for Public Comment: Home Equity Conversion Mortgage (HECM) for Purchase - Acceptable Monetary Investment Funding Sources and Interested Party Contributions [Docket No. FR-6382-N-01]

October 24, 2023 - Today, the Federal Housing Administration (FHA) published a Federal Register (FR) Notice, Home Equity Conversion Mortgage (HECM) for Purchase - Acceptable Monetary Investment Funding Sources and Interested Party Contributions [Docket No. FR-6382-N-01], for public comment. This FR Notice serves to inform the public of FHA’s changes to the HECM for Purchase program by expanding the list of acceptable funding sources, including premium pricing, and permitting additional interested party contributions to satisfy a HECM borrower’s monetary investment requirement.

This FR Notice creates closer alignment between HECM for Purchase and forward mortgages with regard to interested party contributions. This permits HECM for Purchase borrowers to now accept up to six percent of the sales price from an interested party, such as a seller, builder, developer, real estate agent, mortgagee, third-party originator, or other parties with an interest in the transaction. FHA describes an “interested party contribution” as a payment by an interested party or combination of parties toward the borrower’s origination fees, and other closing costs, including any items paid outside of closing, prepaid items, and discount points. Under this FR Notice, interested party contributions of up to six percent of the sales price may be used to satisfy the borrower’s monetary investment.

This is the first time FHA will permit the use of premium pricing in the HECM program. Under this FR Notice, HECM for Purchase borrowers may be able to take advantage of premium pricing and receive a credit from the mortgagee, or third party originator, to reduce their actual closing costs in exchange for a certain initial mortgage interest rate. Federal disclosures currently require the amount of the credit and the interest rate be disclosed to the borrower through the Good Faith Estimate, Loan Comparison Chart, and other closing documents. FHA will review files to make sure all federal requirements are met with respect to the use of premium pricing.

Interested stakeholders are encouraged to review the FR Notice in its entirety and submit their comments using the methods outlined therein through November 24, 2023. FHA will carefully consider public comments received through this solicitation.

FHA INFO 2023-81 - Publication of Final Policies for Accessory Dwelling Units

October 16, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-17, Revisions to Rental Income Policies, Property Eligibility, and Appraisal Protocols for Accessory Dwelling Units, which provides expanded financing options for borrowers seeking to purchase properties with an accessory dwelling unit (ADU), rehabilitate existing structures to add ADUs, or construct new homes with ADUs. With these new policies, more first-time homebuyers and inter-generational families will have access to FHA-insured mortgage financing for properties with ADUs, enhancing their ability to build generational wealth and expanding the supply of affordable housing in their communities.

Specifically, the guidance in this ML:

• Allows prospective borrowers financing a property with an ADU to use some of the actual or projected rental income from the ADU to help meet FHA income requirements;
• Requires analysis and reporting of ADU rental history or market rent in FHA appraisals;
• Clarifies that ADUs are an eligible improvement type for the FHA Standard 203(k) Rehabilitation Mortgage Insurance Program; and
• Adds single family homes with ADUs to the types of improvements that can be financed under FHA’s mortgages for new construction programs.

Today’s ML takes into consideration industry feedback received on the draft ML that was previously announced in FHA INFO 2023-30.

These policy updates will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1 and the HECM Financial Assessment and Property Charge Guide.

The provisions of this ML apply to FHA Title II forward and Home Equity Conversion Mortgages and are effective immediately.

FHA INFO 2023-80 - Updates to the Home Equity Conversion Mortgage Program (ML 2023-23)

September 30, 2023 - Annual appropriations funding the operations of the Federal Government are set to expire at midnight on September 30, 2023. If no appropriations for fiscal year 2024 are passed by that date, the Federal Government will experience a lapse in appropriations.

Consistent with the HUD Contingency Plan for Possible Lapse in Appropriations, the Department has determined that FHA’s Office of Single Family Housing and its mortgage insurance programs have sufficient funding to continue operations through October 7, 2023.

However, FHA will lack the authority to endorse Home Equity Conversion Mortgages (HECMs) after September 30, 2023. HECMs that are not endorsed before the expiration of appropriations on Saturday, September 30, 2023, will not be endorsed for the duration of any lapse in appropriations. FHA will endeavor to complete endorsement of all HECM loan submissions prior to the expiration of its authority to do so.

If a lapse continues beyond October 7, 2023, FHA will provide further information regarding the implementation of HUD’s Contingency Plan on Tuesday, October 10, 2023 (there is a Federal holiday on October 9, 2023).

FHA INFO 2023-79 - FHA 2024 Nationwide Single Family Forward and HECM Mortgage Limits

September 29, 2023 - Annual appropriations funding the operations of the Federal Government are set to expire at midnight on September 30, 2023. If no appropriations for fiscal year 2024 are passed by that date, the Federal Government will experience a lapse in appropriations.

If there is a lapse, FHA will lack the authority to endorse Home Equity Conversion Mortgages (HECMs) after September 30, 2023. HECMs that are not endorsed before the expiration of appropriations on Saturday, September 30, 2023, will not be endorsed for the duration of any lapse in appropriations. FHA will endeavor to complete endorsement of all HECM loan submissions prior to the expiration of its authority to do so.

Please note that, consistent with the HUD Contingency Plan for Possible Lapse in Appropriations, the Department has determined that FHA’s Office of Single Family Housing and its mortgage insurance programs have sufficient funding to continue operations through October 7, 2023. FHA’s continued operation during this period does not change its inability to endorse HECM loans in the event of a lapse.

If a lapse continues beyond October 7, 2023, FHA will provide further information regarding the implementation of HUD’s Contingency Plan on Tuesday, October 10, 2023 (there is a Federal holiday on October 9, 2023).

FHA INFO 2023-77 - FHA Catalyst: Claims Module Now Supports Bulk Submissions

September 18, 2023 - The Federal Housing Administration (FHA) is pleased to announce a much-anticipated enhancement available today in the FHA Catalyst: Claims Module that enables bulk submissions of supplemental claims, including supporting and required documentation. With this enhancement, users are no longer required to individually submit supplemental claims.

This new functionality continues to improve and modernize the process for FHA-approved mortgagees to electronically submit supplemental claims for the single family forward mortgage insurance program.

The FHA Catalyst: Claims Module Single Family Forward Claims User Guide on the FHA Catalyst: Claims Module web page has been updated to include guidance on the newly available bulk submission functionality.

FHA INFO 2023-75 - FHA Waives Requirement that Unnecessarily Prevents or Delays Qualified Borrowers from Obtaining FHA-insured Mortgages

September 7, 2023 - In its continual efforts to improve access to credit for qualified borrowers, the Federal Housing Administration (FHA) issued a waiver today to a requirement that FHA-approved mortgagees flag rejected loans in the FHA Connection (FHAC) system.

FHA has determined that this flag does not improve risk management and is often why other lenders will reject an applicant even when that applicant might otherwise qualify for a loan. Currently, when a mortgagee rejects a borrower’s application for an FHA-insured mortgage, the denial information must be entered on the Mortgage Credit Reject (MCR) screen in FHAC.This action generates a warning flag associated with both the case number and the borrower for a six-month period, requiring a review by the jurisdictional Homeownership Center (HOC) when a borrower applies for an FHA-insured loan from another lender during this timeframe.

By waiving this provision of the Single Family Housing Policy Handbook 4000.1, FHA will no longer require lenders to enter rejection information in FHAC, streamlining the loan underwriting process and removing an unnecessary barrier for borrowers who wish to obtain FHA-insured financing.

This waiver is effective for all cases pending endorsement on or after September 11, 2023. For cases pending endorsement, any MCR case warning flags will be removed.

The MCR screen in FHAC will no longer be available beginning September 11, 2023.

The waiver of this policy will become a permanent policy and will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2023-70 - Medicaid or Children's Health Insurance Program Coverage Renewal Reminder to Borrowers

August 24, 2023 - The Federal Housing Administration (FHA) is seeking the assistance of its Single Family FHA approved mortgagees in reaching individuals and families that qualify for Medicaid and the Children's Health Insurance Program (CHIP). As you may know, States have begun recertifying their Medicaid and CHIP eligibility enrollments for the first time since the beginning of the COVID-19 pandemic. This means, unless updated, each State will rely on information they currently have on file to determine if individuals and families, including those who may be borrowers with FHA-insured mortgages, remain eligible for Medicaid or CHIP coverage.

However, because these are State-run programs, it is essential that recipients update their contact information and renew their eligibility as quickly as possible this year to remain covered.

As such, FHA is providing mortgagees who voluntarily elect to alert their borrowers to this important information with the proposed borrower message below. Remember, timelines for these re-verifications vary by State. Information on the varying re-verification processes and timelines can be found on the Renew Your Medicaid or CHIP Coverage web page on Medicaid.gov.

Proposed Message to Borrowers

This message is being sent to you as part of a government-wide effort to reach individuals and families who may be receiving or are eligible for benefits under State-run Medicaid or the Children's Health Insurance Programs (CHIP).

To remain eligible to participate in these programs, it is essential that you update your contact information and renew your eligibility as quickly as possible this year to maintain your coverage. Information on the re-verification process in your State can be found on the Renew Your Medicaid or CHIP Coverage web page on Medicaid.gov.

Get Ready to Renew Now

Here are some things you can do to prepare for the renewal process:

1. Update your contact information. Ensure your State has your current mailing address, phone number, email, or other contact information. This way, they’ll be able to contact you about your Medicaid or CHIP coverage.
2. Check your mail. Your State will mail you a letter about your coverage. This letter will let you know if you need to complete a renewal form to determine your continued eligibility for Medicaid or CHIP.
3. Complete your renewal form (if you get one). Fill out the form and return it immediately to help avoid a gap in your coverage.

If You No Longer Qualify for Medicaid or CHIP

You may be able to buy a health plan through the Health Insurance Marketplace® and get help paying for it.

• 4 out of 5 enrollees can find Marketplace plans that cost less than $10 a month.
• These plans cover medical necessities like prescription drugs, doctor visits, urgent care, hospital visits, and more.

For More Help

• If you’re eligible, you may be able to sign up for Medicare or change your current Medicare coverage. Go to Get Started with Medicare for more information.
• Call the Marketplace Call Center at 1-800-318-2596 for details about Marketplace coverage. TTY users can call 1-855-889-4325.

FHA INFO 2023-69 - Reminder Guidance for FHA-Approved Mortgagees Regarding Home Equity Conversion Mortgage Borrower and Mortgage Insurance Payments

August 23, 2023 - Today, the Federal Housing Administration (FHA) issued a set of Frequently Asked Questions that address Mortgagee Letter 2023-15, Modifications to FHA Home Equity Conversion Mortgage (HECM) Requirements Related to Secretary Payment of Borrower Disbursements Due to Mortgagee Default, and regarding late payment of mortgage insurance premiums (MIP) for HECMs.

Questions regarding Home Equity Conversion Mortgage (HECM) Monthly Mortgage Premiums (MIP)

Monthly MIP is due to FHA on the first business day of the month. MIP is remitted through the Home Equity Reverse Mortgage Information Technology (HERMIT) system. Late payment of MIP incurs a penalty and interest on late payments.

Q1: When can monthly MIP be added to a HECM balance?

A1: Monthly MIP can only be added to the HECM balance when the monthly MIP is paid to FHA. The payment of funds to the servicer, who will forward the funds to FHA, does not constitute payment to FHA.

Q2: Is monthly MIP added to a HECM balance on the first day of the month if the funds are remitted to FHA late?

A2: No. A mortgagee may only add the monthly MIP to the loan balance when MIP is paid to FHA. The payment of funds to the servicer, who will forward the funds to FHA, does not constitute payment to FHA.

Q3: Will I be charged any penalties or interest if MIP is remitted late on a HECM?

A3: Yes. Any monthly MIP remitted to the FHA Commissioner more than five days after the due date incurs a penalty of four percent of the amount owed and accrues interest at a rate set in conformity with the Treasury Financial Manual. Any late charge and interest owed may not be added to the outstanding loan balance and must be paid by the mortgagee.

Q4: Can a mortgagee file a HECM claim for insurance benefits while MIPs are outstanding?

A4: No. FHA claims for insurance benefits may only be paid if all MIP payments are current and any outstanding penalties have been paid.

Questions Regarding Home Equity Conversion Mortgage (HECM) Borrower Payments

FHA will ensure that payments owed to HECM borrowers are made when a mortgagee is unable or unwilling to make these payments. Mortgagees that are unable to make borrower payments should contact FHA as soon as possible to reduce delays in borrowers' receipt of payments.

Q1. What should a mortgagee do if they cannot make payments to HECM borrowers?

A1: If a mortgagee cannot make borrower payments, they should immediately notify FHA by emailing answers@hud.gov. FHA will ensure that any borrower payments that are not made by the mortgagee are paid to the borrower. FHA’s payment of any amounts due to the borrower does not alleviate the mortgagee’s default for failure to make the payments when due. FHA will require the mortgagee to take steps to cure its default, consistent with ML 2023-15 and 24 CFR 206.121.

Q2: How does a mortgagee provide borrower payment information to FHA when the mortgagee is unable or unwilling to make payments owed to the borrower under a HECM and needs FHA to make these payments to the borrower?

A2: When FHA must make HECM borrower payments due to a mortgagee being unable or unwilling to make those payments, the mortgagee must, within one business day of the date the borrower payment should have been made, provide the following information to FHA in the HERMIT system:

• FHA case number;
• payment plan type;
• disbursement type (scheduled or unscheduled);
• payment amount;
• payment method – check or Automated Clearing House (ACH) transfer;
• bank routing number and account number for ACH transfers;
• account type (checking or savings); and
• mailing address.

A mortgagee must provide the above referenced information to the HERMIT system via the HERMIT Secure File Transfer Protocol (SFTP) Server in an Excel spreadsheet or Comma Separated Values (.csv) file.

Mortgagees must also send an email to: servicingsupport@hermitsp.com and answers@hud.gov notifying FHA that a file has been uploaded. Mortgagees must not send the file directly through email.

In the event this process needs to be initiated and a mortgagee does not know how to access the HERMIT SFTP site, please contact servicingsupport@hermitsp.com for instructions.

FHA INFO 2023-67 - Reminder Guidance for FHA-Approved Mortgagees and Servicers Regarding Presidentially-Declared Major Disaster Areas

August 16, 2023 - In the wake of the devastating wildfires in Maui, HI, the Federal Housing Administration (FHA) is reminding mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations in the U.S. and its territories where the President has declared a major disaster area. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond.

The following guidance applies to all areas covered by a Presidentially-Declared Major Disaster Area (PDMDA), including the PDMDA declared on August 10, 2023, for the Hawaii Wildfires (DR-4724-HI):

Loan Servicing and Loss Mitigation

• The mortgagee may offer forbearance relief to a borrower with a mortgaged property or place of employment located within a PDMDA as follows:
  • Informal Forbearance for Borrowers in PDMDAs. The mortgagee may consider borrowers in PDMDAs for an Informal Forbearance and may offer additional Informal Forbearance periods if the foreclosure moratorium is extended.
  • Formal Forbearance for Borrowers in PDMDAs. The mortgagee may consider Formal Forbearances for borrowers in PDMDAs while they are pursuing home repairs and/or resolving verifiable financial difficulties related to the disaster, provided that:
• The forbearance period does not exceed the estimated time needed to complete the home repairs; and
• The total accumulated mortgage arrearages during the forbearance period does not exceed the equivalent of 12 months of principal, interest, taxes, and insurance (PITI).
  • FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster declaration.
  • In PDMDAs, FHA provides mortgagees an automatic 90-day extension from the foreclosure moratorium expiration date to commence or recommence foreclosure action or evaluate the borrower under HUD’s Loss Mitigation Program.
  • For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Single Family Housing Policy Handbook 4000.1 (SF Handbook) Section III.A.3.c.iii, Monitoring of Repairs to Substantially Damaged Homes.

Mortgagees should review complete servicing guidance in the Single Family Housing Policy Handbook 4000.1 (SF Handbook), Sections III.A.2 and III.A.3.c, relating to the servicing of mortgages in PDMDAs.

Mortgagees are reminded to contact affected borrowers who may require loss mitigation assistance as soon as possible post-disaster and FHA encourages mortgagees to use any permissible means to contact borrowers to provide them with needed forbearance relief.

Because of the extensive destruction in Maui and disruption to modes of communication unique to the island, mortgagees may offer and provide the forbearance unless the borrower affirmatively declines the offer.

Home Equity Conversion Mortgages

• HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day extension of HECM foreclosure timelines.
• In PDMDAs, FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure extension expiration date to commence or recommence a foreclosure action.

Mortgage Origination

• Inspection and Repair Escrow Requirements for Mortgages Pending Closing or Endorsement
  • All properties with pending mortgages or endorsements in areas under a PDMDA designated for individual assistance must have a damage inspection report that identifies and quantifies any dwelling damage.
  • The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the property, and the report must be dated after the Incident Period (as defined by the Federal Emergency Management Association) or 14 Days from the Incident Period start date, whichever is earlier.
  • If the effective date of the appraisal is on or after the date required above for an inspection, a separate damage inspection report is not necessary.
  • All damages, regardless of amount, must be repaired by licensed contractors or per local jurisdictional requirements, and the Property must be restored to pre-loss condition with appropriate and applicable documentation.

Preparing for Longer-Term Recovery

In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review the following:

• Guidance for FHA’s 203(h) Mortgage Insurance for Disaster Victims in Section II.A.8.b of the SF Handbook. The 203(h) program provides mortgage insurance for mortgages used to finance the rehabilitation or reconstruction of an existing home or the purchase of another one for victims who have lost their homes due to a major disaster in a PDMDA.
• Guidance for FHA’s 203(k) Rehabilitation Mortgage Insurance Program in Section II.A.8.a of the SF Handbook. The 203(k) program provides mortgage insurance for financing or refinancing of a home, including the cost of repairs or renovation – structural and non-structural.

Mortgagees can find more information about the above policies and other FHA PDMDA policies on the FHA Resource Center’s Online Knowledge Base.

FHA INFO 2023-65 - FHA Enables Mortgagees to Process Case Cancellations and Reinstatements through FHA Connection (FHAC)

August 10, 2023 - Today, the Federal Housing Administration (FHA) announced a new functionality in the FHA Connection (FHAC) system, enabling lenders to process their case cancellations and reinstatements through the Case Cancel/Reinstate Screen, and through the Business to Government (B2G) connection in the future. This new functionality eliminates the requirement to submit most requests to the FHA Resource Center for processing. The new functionality in large part eliminates an unnecessary manual request submission process by providing lenders with increased flexibility and efficiency to manage their case processing needs in FHAC without FHA assistance.

When FHAC identifies an exception that requires FHA staff intervention, it will direct mortgagees to submit the request to the FHA Resource Center using the applicable template on the Single Family Case Processing Requirements web page, which will be available on August 14, 2023. These exceptions include case cancellations if the Upfront Mortgage Insurance Premium (UFMIP) on the case was paid, the case was endorsed, or case reinstatements if the case was automatically canceled.

FHA Connection Application Coordinators must grant authority to users responsible for performing the Case Cancellation and Reinstatement functions.

This new functionality will be available in FHAC beginning Monday, August 14, 2023, and will be optional during a 90-day transition period. After this transition period, mortgagees must submit case cancellations and reinstatements through FHAC beginning November 7, 2023. The functionality will be available through the Business to Government (B2G) connection soon. Prior to its availability, B2G lenders will be notified of the implementation date and that the B2G guide has been updated to include the new functionality.

The Single Family Housing Policy Handbook 4000.1. Section II.A.1.a.iii. (B)(3), Canceling and Reinstating Case Numbers was updated on August 9, 2023, to align with this new guidance.

FHA INFO 2023-64 - FHA Published Updates to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1)

August 9, 2023 - Today, the Federal Housing Administration (FHA) published updates to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

Handbook 4000.1 is the comprehensive, authoritative source for Single Family Housing policy guidance for industry stakeholders doing business with FHA. It provides industry partners with clear and concise policy and procedure requirements for the FHA Title II forward mortgage program and Title I Property Improvement and Manufactured Home Loan Programs, thereby protecting FHA’s Mutual Mortgage Insurance (MMI) Fund. Single Family Housing intends to produce regular updates to ensure Handbook 4000.1 includes FHA’s latest policies and processes. Handbook 4000.1 will also contain policy guidance governing the Single Family Housing Title II reverse mortgage program (Home Equity Conversion Mortgage) when fully integrated.

This update contains additions, revisions, and various technical edits to Handbook 4000.1, Sections I, II, III, and IV, Appendix 1.0 and 7.0, and incorporates previously published Mortgagee Letters (ML). Some of the more notable updates include, but are not limited to, the following new guidance:

• Section I – Doing Business with FHA
  • Removed language that exempted certain new institutions from providing income and cash flow statements as part of the audited financial statements to clarify existing requirements for Mortgagee approval.
  • Updated language to remove the requirement to register the underwriter for Title I Property Improvement Loans.
• Section II – Origination through Post-closing/Endorsement
  • Updated the process for canceling and reinstating case numbers.
  • Added a new section, Foreign Income, as one of the Other Sources of Effective Income.
  • Added guidance on Temporary Interest Rate Buydown to the TOTAL Mortgage Scorecard section to align with guidance in the Manual section.
• Section III – Servicing and Loss Mitigation
  • Updated guidance to clarify that the principal and interest (P&I) monthly payment may increase when the Target Payment is not achieved.
  • Updated policy to clarify that excluded property preservation expenses are not included in the maximum property preservation allowance of $5,000, and an over-allowable request for an excluded expense is not required if the cost of the excluded expense is equal to or less than the amount in Appendix 7.0.A.
  • Updated the mailing address and review process for submission of the title evidence and servicing records package for Hawaiian Home Lands Mortgages to streamline the title approval process.
• Throughout Sections II, III, IV
  • Updated Fair Housing, Equal Employment Opportunity, and related language to be consistent in content and word order throughout sections II, III, and IV.
• Appendix
  • Clarified the requirements for requesting approval for expenses that exceed the Maximum Property Preservation Allowances.

Stakeholders are encouraged to review and familiarize themselves with the changes in Handbook 4000.1. A separate redline version of Handbook 4000.1 has also been posted on the Handbook 4000.1 Information web page. The online version of Handbook 4000.1 is being updated and will be available soon.

FHA INFO 2023-60 - FR Proposed Rule: Modernization of Engagement with Mortgagors in Default [Docket No. FR-6353-P-01]

July 30, 2023 - Today, the Federal Housing Administration (FHA) published a proposed rule in the Federal Register (FR), Modernization of Engagement with Mortgagors in Default [Docket No. FR-6353- P-01], for public comment. This proposed rule would update the Department of Housing and Urban Development’s (HUD) current regulation (24 CFR 203.604) that requires mortgagees to meet in person with borrowers who are in default on their mortgage payments.

The proposed rule, if finalized, would:

• Allow mortgagees (servicers) to utilize electronic and other remote communication methods for conducting interviews with borrowers to satisfy FHA’s early default intervention requirements;
• Eliminate the requirement that mortgagees make at least one trip to the mortgaged property to schedule a meeting with the borrower; and
• Expand the meeting requirement to include borrowers who do not reside in the mortgaged property or have a mortgaged property that is not within 200 miles of their mortgagee, its servicer or a branch office.

If adopted, HUD’s regulation would align with advances in electronic communication technology and borrower engagement preferences while preserving necessary consumer protections. Borrowers have increasingly indicated their preference for electronic and other remote communication alternatives to discuss foreclosure prevention options.

Due to the COVID-19 pandemic, in early 2020 HUD waived the face-to-face meeting requirement for mortgagees. Over the past three years, mortgagees have successfully demonstrated their ability to communicate with those borrowers who preferred to meet using electronic or other remote communication tools, as evidenced by the unprecedented number of distressed borrowers who have been assisted with loss mitigation assistance since the onset of the pandemic. This proposed rule would make permanent the flexibilities afforded during the pandemic period while ensuring that borrowers continue to receive robust loss mitigation services when they encounter difficulty in meeting their mortgage obligations.

As a reminder, this proposed rule is not official policy until finalized and may not be used in connection with any FHA-insured mortgage. FHA’s existing regulations remain in effect until the final rule is published and effective.

Interested stakeholders are encouraged to review the entire proposed rule and submit comments following the methods outlined in the Federal Register through September 29, 2023.

FHA INFO 2023-57 - FR Proposed Rule: Revision of Investing Lenders and Investing Mortgagees Requirements and Expansion of Government-Sponsored Enterprises Definition [Docket No. FR-6291-P-01]

July 18, 2023 - Today, the Federal Housing Administration (FHA) published a proposed rule in the Federal Register, Revision of Investing Lenders and Investing Mortgagees Requirements and Expansion of Government-Sponsored Enterprises Definition [Docket No. FR-6291-P-01], for public comment.

This proposed rule would revise and clarify requirements for investing lenders and mortgagees to gain or maintain status as an FHA-approved lender or mortgagee, separately define Government-Sponsored Enterprises (GSEs) and the Federal Home Loan Banks (FHLB) from other governmental entities and align general FHA approval standards with current industry business practices. The proposed changes are largely designed to accommodate more precise language and definitions related to an investing lender or mortgagee’s limited participation in FHA programs and do not represent a significant departure from existing requirements for most lenders and mortgagees originating, endorsing, or servicing FHA insured loans and mortgages.

HUD regulations at 24 CFR part 202, establish the general standards and eligibility requirements for lenders and mortgagees participation in FHA’s Title I and Title II programs.

Through this proposed rule, HUD proposes to update and make the following revisions to 24 CFR part 202:

• Separately define the GSEs and their approval requirements from other Federal, State, or municipal governmental agencies and Federal Reserve Banks in 24 CFR 202.10. Specifically, HUD proposes to separately define the term GSE in a new paragraph (b) in 24 CFR 202.10, with approval requirements that are tailored to the limited participation of the GSEs in FHA’s Title I and Title II programs. The GSE definition would include the Federal Home Loan Mortgage Corporation (commonly known as Freddie Mac), and the Federal National Mortgage Association (commonly known as Fannie Mae), and the FHLBs.
• Require investing lenders and mortgagees to comply with applicable audit and financial statement requirements by adding language to 24 CFR 202.9, similar to the requirements for supervised and non-supervised lenders and mortgagees found in 24 CFR 202.6(b)(4) and 24 CFR 202.7(b)(3),
• Clarify that investing lenders and mortgagees must comply with FHA’s annual certification requirements at 24 CFR 202.5(m).
• Remove requirements from 24 CFR 202.5(n)(2) that expired in 2013; and
• Make several technical or non-substantive edits to 24 CFR part 202 that would improve the clarity and readability.

Interested stakeholders are encouraged to review and submit comments on the proposed rule through September 18, 2023, following the methods outlined in the Federal Register Notice.

FHA INFO 2023-56 - Additional Translated Resources Available to Aid Prospective Homebuyers with Limited English Proficiency

July 12, 2023 - The Federal Housing Administration (FHA) posted additional translated materials to its recently launched Language Access Resources web page, including the HUD-92564-CN, “For Your Protection, Get a Home Inspection” form and the “Dispelling Homebuying Myths” four-part presentation series to help increase awareness and understanding of the homebuying process. The Dispelling Homebuying Myths series includes presentations on:

• Finding the Right Home;
• Qualifying for a Loan;
• Tips for Buying Your First Home; and
• Affording a Home.

Now available in Chinese, Korean, Spanish, Tagalog, and Vietnamese, these multilingual educational materials are offered along with numerous other single family homeownership documents and educational resources to assist those individuals for whom English may not be their primary language.

FHA continues in its commitment to providing more opportunities for first-time and low- and moderate-income homebuyers, particularly those in communities of color, to attain the stability and wealth-building potential of homeownership. Before prospective borrowers and existing homeowners execute legal documents in English, as required by law, FHA program participants, including lenders, servicers, housing counselors, and others working with those individuals with limited English proficiency can utilize these resources to aid in explaining FHA single family mortgage programs in their preferred language.

Information on the Language Access Resources web page was previously announced in a press release and FHA INFO 2023-49. Visit the Language Access Resources web page to view these resources.

FHA INFO 2023-55 - Modifications to FHA Home Equity Conversion Mortgage (HECM) Requirements Related to Secretary Payment of Borrower Disbursements Due to Mortgagee Default (ML 2023-15)

July 11, 2023 - Today, the Federal Housing Administration (FHA), published Mortgagee Letter (ML) 2023-15, Modifications to FHA Home Equity Conversion Mortgage (HECM) Requirements Related to Secretary Payment of Borrower Disbursements Due to Mortgagee Default. This ML considered industry feedback received on the draft ML posted on the Single Family Drafting Table and announced in FHA INFO 2023-41.

Today’s ML implements changes to the processes FHA employs for instances of anticipated or actual default of a mortgagee’s disbursement obligations to a HECM borrower. The policies are designed to improve FHA’s ability to make prompt payments in the event of mortgagee default, ensuring that HECM borrowers receive scheduled or requested funds in a timely manner. Specifically, this ML implements the following changes:

• Provides additional sources from which FHA can receive notice of a mortgagee’s anticipated or actual default on borrower payments; and
• Requires mortgagees to provide FHA with borrower payment information when FHA determines the mortgagee is unable or unwilling to make the required borrower payments.

The provisions of this ML are effective immediately.

FHA INFO 2023-52 - Supplemental Consumer Information Form (ML 2023-13)

June 27, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-13, Supplemental Consumer Information Form. The Supplemental Consumer Information Form (SCIF) contains information about the borrower’s language preference, if any, and any homeownership education and housing counseling the borrower may have received. This ML requires mortgagees to provide prospective forward mortgage borrowers with the SCIF at the time of application, and to submit this information to FHA as part of the lender’s required loan application data submissions. Borrowers may elect to provide their lenders with no information, some information or all the information requested in the SCIF.

FHA is adopting the SCIF in recognition of the nation’s growing diverse population and the importance of understanding a borrower’s language preference, as well as mortgage literacy that may have been obtained through housing counseling. For FHA, collecting this information will enable a better aggregate view of language preferences for the borrowers it serves, which in turn will influence its own outreach and education strategies. For mortgagees, this information can influence their considerations for borrower outreach services they may choose to offer now or in the future. Mortgagees will be able to use the information collected in the SCIF to identify possible language barriers to help them better understand the borrower’s needs during the homebuying process.

The provisions of this ML must be implemented for mortgage applications dated on or after August 28, 2023.

FHA INFO 2023-50 - Updates to FHA Catalyst Claims Module

June 14, 2023 - Today, the Federal Housing Administration (FHA) announced that its FHA Catalyst Claims Module is being updated to further align module functionality with FHA’s claim certification requirements published in Single Family Housing Policy Handbook 4000.1, IV.A.1., Claim Submission Process.

On July 14, 2023, the FHA Catalyst Claims Module will be updated to reinforce user profile accuracy and to be consistent with FHA policy that only mortgagee employees may certify claim submissions. Other FHA Catalyst Claims Module users working on behalf of a mortgagee will continue to have access to certain functionality in the Claims Module, such as the ability to enter information and upload documentation.

Mortgagee Administrators should review the mortgagee’s user profile records in FHA Catalyst to ensure that their employees are properly designated as such in FHA Catalyst ahead of the July 14th implementation and that other users also have the appropriate designations in the Claims Module. For assistance with making these modifications, Mortgagee Administrators should review the June 2023 Instructions for Mortgagee Administrators document. Please refer to the FHA Catalyst User Access Management webpage for all other functions and resources.

FHA INFO 2023-49 - FHA Launches New Language Access Resources Web Page

June 13, 2023 - The Federal Housing Administration (FHA) works to make access to homeownership available for more individuals and families who are ready and able to become homeowners. Today, FHA is taking new steps to remove an important barrier to homeownership for those who have limited English proficiency by announcing the availability of multilingual educational materials on its new Language Access Resources web page.

Beginning today, more than 40 single family homeownership documents and other educational resources are now available in Chinese, Korean, Spanish, Tagalog, and Vietnamese. These represent the first set of single family homeownership document translations made available by FHA, to assist those for whom English may not be their primary language.

The newly translated materials will facilitate lenders, servicers, housing counselors, and other FHA program participants working with those with limited English proficiency in explaining FHA single family mortgage programs, before prospective borrowers and existing homeowners execute legal mortgage documents in English, as required by law.

FHA INFO 2023-48 - HUD's Office of Housing Counseling to Host a Webinar on Manufactured Housing Options as an Affordable Path to Homeownership

June 8, 2023 - The Department of Housing and Urban Development’s (HUD) Office of Housing Counseling is inviting stakeholders to attend the free, online Providing Counseling on Manufactured Housing Options webinar on June 15, 2023, to learn how modern, well-constructed, and energy efficient manufactured housing can offer an affordable path to homeownership.

During this webinar, stakeholders will learn more about the essentials of manufactured housing, purchase options, and how financing may differ from site-built housing. Webinar details — including the online registration link — follow:

Title: Providing Counseling on Manufactured Housing Options
Date: Thursday, June 15, 2023
Time: 2:00 PM – 3:00 PM (Eastern)
Event: Online Registration
Audience: Housing Counseling Agency staff

Email the training registrar with questions or for additional information.

FHA INFO 2023-45 - Listening Session: Adoption of Energy Efficiency Standards for New Construction of HUD-Financed Housing

June 1, 2023 - On May 18, 2023, the Department of Housing and Urban Development’s (HUD) Office of Environment and Energy (OEE) and the Department of Agriculture published a Notice of Preliminary Determination “Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA-Financed Housing: Preliminary Determination and Solicitation of Comment” [Docket No. FR-6271-N-01].

HUD’s OEE, in conjunction with the Federal Housing Administration (FHA), invites FHA program participants to attend a virtual listening session on the Notice. Attendees will have the opportunity to provide verbal comments on the Notice during the listening session.

To attend this live session, see the details below:

Date: Thursday, June 8, 2023
Time: 3:00 PM – 4:30 PM (Eastern)
Event Location: Online
Intended Audience: FHA Single Family and Multifamily Housing Program Participants and Associated Stakeholders

Stakeholders interested in attending the listening session to learn more about the Notice and/or submit comments during the public comment portion of the webcast are strongly encouraged to read the Notice in its entirety before joining the call. Public comments can also be submitted via the methods outlined in the Notice through July 17, 2023.

The Notice fulfills a statutory requirement under the Energy Independence and Security Act of 2007 (EISA) that requires HUD and USDA to jointly adopt the most recently published energy codes, subject to a cost-benefit housing “affordability and availability” test. The 2021 International Energy Conservation Code (IECC) and ASHRAE 90.1-2019 are the most recent published energy codes. There are two primary benefits of adopting energy-saving building codes: a private benefit for residents—either homeowners or renters—in the form of lower energy costs, and the external social value of reducing the emission of greenhouse gases (GHGs). Additional benefits may include improved health and resilience against extreme hot or cold weather events. The Notice provides a Preliminary Determination, as required by the statute, that on balance these codes will not negatively impact the affordability and availability of eligible single family and multifamily housing.

FHA INFO 2023-43 - 203(k) Rehabilitation Mortgage Program Fact Sheets for Consumers and Consultants

May 30, 2023 - Today, the Federal Housing Administration (FHA) announced the availability of 203(k) Rehabilitation Mortgage Program (203(k) Program) fact sheets for consumers and aspiring and current FHA203(k) Consultants. These materials are designed to help increase awareness and understanding of the features and benefits of the program.

The 203(k) Program is FHA’s primary mortgage insurance product for financing the rehabilitation and repairs, both structural and non-structural, of single family properties. The program can also be used to make improvements to increase energy efficiency or to increase the property’s resilience against future disasters as part of a renovation project or repair of disaster-related damage.

The fact sheets, which include a program overview with features, benefits, and requirements, as well as additional 203(k) Program resources, are:

• 203(k) Program Consumer Fact Sheet
• Role of an FHA-approved 203(k) Consultant
• Become an FHA-approved 203(k) Consultant

These materials should be helpful to homebuyers, homeowners, aspiring and existing 203(k) Consultants and real estate professionals are available under “More Resources” on FHA’s 203(k) Program webpage.

Lender-focused fact sheets were previously announced in FHA INFO 2022-94.

FHA INFO 2023-40 - Update to ML 2023-03, Regarding Loss Mitigation Options for Non-Borrowers Who Acquired Title through an Exempted Transfer (ML 2023-11)

May 22, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023- 11, Update to ML 2023-03, Regarding Loss Mitigation Options for Non-Borrowers Who Acquired Title through an Exempted Transfer. The ML updates and clarifies loss mitigation options for non-borrowers who acquired title of a borrower’s property through a transfer that exempts the borrower’s mortgage from being called due and payable under the Garn-St. Germain Depository Institutions Act. These non-borrowers who acquire title may also be referred to as successors in interest.

This ML will allow mortgagees to review exempted transferee non-borrowers who became successors in interest, and are in default or imminent default for the FHA-HAMP loss mitigation options, which include the necessary credit review for the non-borrower as required by the National Housing Act.

The provisions of this ML may be implemented immediately; however, they must be implemented no later than July 21, 2023.

The policy updates in this ML will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2023-38 - Modifications to the Home Equity Conversion Mortgage (HECM) Assignment Claim Type 22 (CT-22) Submission Criteria and Documentation Requirements (ML 2023-10)

May 17, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-10, Modifications to the Home Equity Conversion Mortgage (HECM) Assignment Claim Type 22 (CT-22) Submission Criteria and Documentation Requirements. This ML implements procedural changes and revised documentation requirements for HECM assignment claim submissions and incorporates industry feedback received on the draft ML, Modifications to the Home Equity Conversion Mortgage (HECM) Assignment Claim Type 22 (CT-22) Submission Criteria, announced in FHA INFO 2023-25.

This ML implements the following changes:

• Lowers the Maximum Claim Amount (MCA) required to submit an assignment claim for Preliminary Title Approval (PTA) from 97.5 percent to 97.0 percent;
• Allows mortgagees to submit copies of the note and security instrument with the assignment claim application, with submission of the original loan documents required no later than 90 days after the assignment claim payment date;
• Extends the timeframe for delivery of assignments of the mortgage to the Secretary from six months to twelve months for HECMs with FHA case numbers assigned before September 19, 2017, making the assignment delivery timeframe the same for all HECMs; and
• Modifies the supporting documentation mortgagees must submit to be eligible for PTA.

The HECM assignment CT-22 is an option that allows mortgagees to assign a HECM to FHA in exchange for claim payment up to the MCA. For a HECM loan to be eligible for assignment to HUD, the mortgagee and the borrower must be in compliance with all FHA assignment claim requirements, including that the HECM loan balance is at or above 98 percent of the MCA and is not due and payable. Once a HECM is assigned to HUD, HUD becomes the mortgage holder and will perform the servicing duties for the remaining duration of the HECM loan term. This ML makes no changes to documentation required in the CT-22 collateral package or for HECMs assigned using the Mortgagee Optional Election Assignment.

The provisions of this ML are effective immediately.

FHA INFO 2023-36 - Transition of LIBOR to Alternate Indices for FHA Single Family Adjustable Rate Mortgages

May 2, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023- 09, Adjustable Rate Mortgages (ARMs): New Secretary-Approved Interest Rate Indices and Requirements for Transitioning from the London Interbank Offered Rate (LIBOR) Index.

This ML implements the provisions of the Adjustable Rate Mortgages: Transitioning from LIBOR to Alternative Indices [Docket No. FR-6151-F-03] final rule that was published in the Federal Register on March 1, 2023. In the final rule, FHA established the spread-adjusted Secured Overnight Financing Rate (SOFR) as a Secretary-approved index. The ML provides direction to mortgagees on using the applicable Refinitiv USD IBOR Consumer Cash Fallback (“Refinitiv”) transition spread-adjusted SOFR tenor for transitioning existing ARMs from LIBOR to SOFR and the specific SOFR index for use in new ARM originations in Single Family Title II programs, including the Home Equity Conversion Mortgage (HECM) program.

In addition, for monthly HECM ARMs, FHA is also establishing the maximum lifetime note rate of up to ten percent of the initial note rate in accordance with the final rule.

FHA is also announcing the availability of updated HECM model documents, revised to be consistent with the final rule and ML, and to provide fallback language for future transition index transition events. The updated model documents may be found on the Single Family Model Documents web page on hud.gov.

The provisions in this ML have various effective dates. Mortgagees are advised to carefully review this ML for the FHA-insured forward and HECM ARMs policy effective dates.

The policy updates in this ML will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2023-34 - FR Proposed Rule: Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard [Docket No. FR-6272-P-01]

April 27, 2023 - The Department of Housing and Urban Development’s (HUD) Office of Environment and Energy (OEE) on March 24, 2023 published a proposed rule, “Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard” [Docket No. FR-6272-P-01].This proposed rule includes a specific section on addressing future flood risk with FHA-insured Single Family mortgages.

HUD’s OEE, in conjunction with the FHA’s Office of Single Family Housing (OSFH), invites stakeholders in the Single Family Housing program to attend a virtual listening session on the FHA Single Family Housing-specific components of the proposed rule on Thursday, May 4, 2023.

Brian Barnes, OSFH’s Deputy Director for the Home Valuation Policy Division, will discuss the possible impacts to Minimum Property Standards for flood hazard exposure for Single Family properties in the FHA insurance program. Real-time, public comments on these possible impacts will be solicited during the listening session.

To view this live session, see the details below:

Date: Thursday, May 4, 2023
Time: 3:00 PM – 4:30 PM (Eastern)
Event Location: Online

Stakeholders interested in attending and/or commenting on HUD’s proposed flood rule and learn more about its possible impact on single family properties during this listening session, are strongly encouraged to read it in its entirety before joining the call. Public comments can also be submitted via the methods outlined in the proposed rule through May 23, 2023.

FHA INFO 2023-29 - Partial Temporary Waiver to Permit Flexibility in Submission of Home Equity Conversion Mortgage Original Documents and Endorsement

April 12, 2023 - Today, the Federal Housing Administration (FHA) issued a partial temporary waiver that permits Home Equity Conversion Mortgage (HECM) mortgagees to send the original hard copy Loan Agreement and exhibits directly to Compu-Link, FHA’s HECM servicing contractor, instead of sending them directly to the jurisdictional Homeownership Center (HOC) in the FHA case binder. This change is designed to eliminate unnecessary costs and transfers of the original Loan Agreement.

With this waiver, mortgagees have the option to submit the original Loan Agreement and related exhibits (Schedule of Closing Costs and Liens, Payment Plan, and Repair Rider, if applicable) directly to Compu-Link at: 14002 East 21st Street, Suite 300 Tulsa, OK, 74134.

Mortgagees choosing to send the original Loan Agreement and exhibits directly to Compu-Link must still include two PDF copies of the Loan Agreement and related exhibits in the FHA endorsement case binder submitted to the HOC for an insuring decision.

If the mortgagee chooses not to send these documents directly to Compu-Link, they not only are required to send hard copies of the original Loan Agreement and related exhibits, but they must also send two additional hard copies of the Loan Agreement and related exhibits to the HOC, as required by the current case binder stacking order published in Mortgagee Letter 2014-22, Attachment 1. The HOC will then submit these hard copy documents to Compu-Link on their behalf.

FHA INFO 2023-27 - FHA Extends COVID-19 Forbearance and COVID-19 Home Equity Conversion Mortgage (HECM) Extension Policies Through May 31, 2023

April 7, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-08: Extension for COVID-19 Forbearance and COVID-19 Home Equity Conversion Mortgage (HECM) Extensions Through May 31, 2023. This ML establishes May 31, 2023 as the final date for borrowers requesting a COVID-19 forbearance or a COVID-19 Home Equity Conversion Mortgage (HECM) Extension.

Requests for FHA’s COVID-19 forbearance and HECM extension options were originally scheduled to end at the end of the COVID-19 National Emergency. As the National Emergency may end earlier than originally expected, FHA is choosing to extend its COVID-19-related forbearance and HECM extension policies beyond the end of the National Emergency. This gives borrowers with FHA-insured mortgages who need assistance additional time to request forbearance or a HECM extension. It also provides mortgagees with additional time to offer and process these requests.

This extension does not impact the recent changes made to HUD’s loss mitigation program that were announced in ML 2023-03: CORRECTED AND REPUBLISHED: Expansion of the COVID-19 Recovery Loss Mitigation Options.

Mortgagees are encouraged to thoroughly review today’s ML 2023-08 to ensure compliance with the updated policy guidance and timelines associated with HUD’s extended COVID-19- related prevention efforts.

FHA INFO 2023-25 - FHA Seeks Feedback on Draft Mortgagee Letter Proposing Earlier Claim Submissions for Home Equity Conversion Mortgage Assignment Claims

April 4, 2023 - Proposal will allow for additional expedience in processing and disbursing eligible HECM assignment claim funds to mortgage servicers.

Today, the Federal Housing Administration (FHA) posted a draft Mortgagee Letter (ML) proposing changes to the Home Equity Conversion Mortgage (HECM) program and documentation requirements for the HECM Assignment Claim Type 22 submission criteria. The proposal would allow servicers to begin submitting required claim documentation for review by FHA when the mortgage reaches 97 percent of the Maximum Claim Amount (MCA), versus 97.5 percent of MCA allowed today. FHA is proposing this change to expedite the payment of claim funds when the mortgage reaches 98 percent of the MCA, to mortgage servicers in light of current market liquidity considerations.

Specifically, the draft ML, Modifications to the Home Equity Conversion Mortgage (HECM) Assignment Claim Type 22 (CT-22) Submission Criteria proposes modifying the HECM CT-22 submission criteria as follows:

• Lowering the threshold for submitting assignment claims for preliminary review from 97.5 percent to 97 percent of the MCA. This will support the timely payment of assignment claims and provide additional flexibility for mortgagees in managing their HECM portfolios.
• Establishing that the deadline for the mortgagee’s delivery of original notes and mortgages to FHA will be no later than 90 days after the assignment claim payment date. This will eliminate delays for servicers in filing assignment claims, and is intended to reduce the overall timeframe from initial submission through claim payment. Copies of the original loan documents will still be required as part of the documentation submitted with the assignment claim application.
• Aligning the deadline for delivering recorded assignments of mortgage for all HECMS. The current policy provides two different dates depending on the date of FHA case number assignment. The new deadline creates uniformity by increasing the timeline to 12 months for HECMs with FHA case numbers assigned before September 19, 2017.

The HECM Assignment Claim Type 22 is an option that allows a HECM servicer to assign a mortgage that is in good standing to FHA in exchange for payment of the loan balance, up to the maximum claim amount. For a HECM loan to be eligible for assignment to HUD, both the lender and the borrower must be in compliance with all program terms. Once a HECM loan is assigned to HUD, HUD becomes the administrator of the loan and will continue with the servicing duties for the remainder of the HECM loan term.

Interested stakeholders are encouraged to thoroughly review the draft ML and provide feedback through April 11, 2023. Instructions for viewing and providing feedback are available on the FHA Single Family Housing Drafting Table. FHA will carefully consider all feedback received before publishing a final ML with requirements.

FHA INFO 2023-24 - Reminder Regarding Maintaining FHA-Approved Mortgagees/Lenders Administrative Contact Information

April 3, 2023 - Today, the Federal Housing Administration (FHA) is issuing this reminder to all FHA-approved mortgagees and lenders that they must always maintain up-to-date contact information for their administrative contact(s) in the Lender Electronic Assessment Portal (LEAP). This means ensuring the administrative contact’s name, telephone number, and primary email is always current; a secondary email address is strongly encouraged.

Maintaining current and accurate contact information for individuals in this role is vital since it is used for formal communication and notifications from FHA and the Department of Housing and Urban Development (HUD).

Instructions for updating the administrative contact’s information in LEAP are available in Section 5.2.6 of the LEAP User Manual.

FHA INFO 2023-23 - XML Version 1.7 Required for All Bulk Claims Submissions in FHA Catalyst

March 29, 2023 - On May 20, 2023, FHA will require mortgagees to adopt XML Version 1.7, the latest format for all bulk and application programming interface (API) submissions. After this date, older XML versions will not be accepted for claims submissions in the FHA Catalyst: Claims Module.

Mortgagee Letter 2023-03 announced claims for COVID-19 Loss Mitigation Option incentives may be filed on or after March 1, 2023. During the implementation, FHA became aware of issues with Claim Type 32 submissions for mortgagees who did not update to XML Version 1.7. FHA has taken steps to mitigate this impact while mortgagees update to XML Version 1.7 by May 19, 2023.

For more information on implementing the XML Version 1.7 for bulk submissions in FHA Catalyst, view the following documents: FHA Catalyst Claims COVID 19 Bulk XML Instructions.pdf and Bulk Claims Input1.7.xsd.

FHA INFO 2023-21 - FHA Connection Undergoing Additional System Maintenance

March 27, 2023 - FHA Connection (FHAC) is scheduled for additional system upgrades and maintenance beginning Friday, March 31st at 8:00 PM (Eastern) through Monday, April 3rd at 8:00 AM (Eastern). During this time frame, FHAC will be unavailable for appraisal processing.

FHA INFO 2023-19 - Reminder Regarding Use of Homeowner Assistance Funds with FHA-insured Mortgages

March 24, 2023 - The Federal Housing Administration (FHA) is reminding servicers about the use of the U.S. Department of the Treasury’s Homeowner Assistance Fund (HAF) financial assistance to help borrowers, with FHA-insured single family forward mortgages and Home Equity Conversion Mortgages (HECM), struggling with their mortgage payments. The American Rescue Plan Act of 2021 established HAF to provide financial assistance to eligible homeowners who have suffered financial hardships during the COVID-19 National Emergency. Through HAF, eligible homeowners can receive assistance to cover qualified expenses that may include housing-related costs.

Servicers of FHA-insured mortgages are required to inform distressed homeowners about funds available through their jurisdiction’s HAF program. As allowable by the homeowner’s HAF program, HAF may:

• be used to bring the homeowner’s mortgage current;
• be used in combination with certain FHA loss mitigation options for single family forward mortgages;
• reduce the balance or pay off the homeowner’s outstanding loss mitigation Partial Claim, even if their mortgage payments are now current;
• be used in combination with the COVID-19 HECM Property Charge Repayment Plan; and
• pay for delinquent property tax and homeowners insurance charges on defaulted HECMs, if permissible under their jurisdiction’s HAF program guidelines.

FHA has also expanded the definition of imminent default to include homeowners who qualified for HAF. With this change, servicers will be able to offer additional loss mitigation options to borrowers who qualified for or used HAF funds and may no longer technically be delinquent but require further assistance to avoid redefault.

For additional guidance, servicers and other interested stakeholders should view the FHA FAQs webpage at www.hud.gov/answers and click on the Treasury Homeowner Assistance Fund (HAF) Program box under the Featured Content section. More information is also accessible on the Treasury's Homeowner Assistance Fund web page and the National Council of State Housing Agencies website.

FHA INFO 2023-18 - FR Notice: Mortgagee Review Board: Administrative Actions (Docket No. FR-6379-N-01)

March 23, 2023 - Today, the Federal Housing Administration (FHA) published in the Federal Register (FR), Mortgagee Review Board: Administrative Actions [Docket No. FR-6379-N-01]. This FR Notice is the annual notification of all completed administrative actions taken by the Department of Housing and Urban Development’s (HUD) Mortgagee Review Board from October 1, 2021, through September 30, 2022, where settlement agreements have been reached, civil money penalties were imposed, or FHA participation was terminated as of February 21, 2023.

The FR Notice provides a description of, and the cause for, the Mortgagee Review Board’s administrative actions against HUD-approved mortgagees in 49 fact-based cases and 16 annual recertification violations.

Read the entire FR Notice by viewing the Mortgagee Review Board: Administrative Actions on www.federalregister.gov.

FHA INFO 2023-15 - FR Notice: Final Rule Increased Forty-Year Term for Loan Modifications (Docket No.FR-6263-F-03) and Establishment of the 40-Year Loan Modification Loss Mitigation Option (ML 2023-06)

March 8, 2023 - Today, the Federal Housing Administration (FHA) published a final rule in the Federal Register, Increased Forty-Year Term for Loan Modifications [Docket No. FR-6263-F-03]. The final rule will allow mortgagees to increase the maximum term of a loan modification from 360 to 480 months for FHA-insured mortgages after a default episode. FHA will also simultaneously publish Mortgagee Letter (ML) 2023-06, Establishment of the 40-Year Loan Modification Loss Mitigation Option establishing the standalone 40-year loan modification policy.

Specifically, the final rule will permit mortgagees to provide a 40-year loan modification to borrowers. The provisions of the final rule will expand FHA’s loss mitigation options to include a standalone 40-year loan modification. The 40-year loan modification can assist borrowers in avoiding foreclosure by spreading the outstanding mortgage balance over a longer period, thereby making their monthly payments more affordable.

FHA is publishing the final rule after careful consideration of all public comments received to its proposed rule that was published in the Federal Register [Docket No. FR-6263-P01] on April 1, 2022. Public comments to the proposed rule were overwhelmingly supportive of the 40-year loan modification option and recognized the many benefits to borrowers. This final rule provides mortgagees with an additional option to help borrowers bring their mortgages current and avoid losing their homes. The rule also aligns FHA’s requirements with loan modification options available to mortgagees for borrowers with mortgages backed by Fannie Mae and Freddie Mac, which provide a 40-year loan modification option.

The regulations in this final rule are effective on May 8, 2023.

The provisions of the ML may be implemented immediately but must be implemented no later than May 8, 2023. Updates in the ML will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2023-14 - FR Notice: Proposed Rule Changes in Branch Office Registration Requirements (Docket No. FR-6321-P-01)

March 1, 2023 - Today, the Federal Housing Administration (FHA) published a proposed rule in the Federal Register, Changes in Branch Office Registration Requirements [Docket No. FR-6321-P-01], for public comment. FHA is proposing regulation changes that would eliminate the requirement that lenders and mortgagees register all branch offices conducting FHA business.

Current FHA regulations found at 24 CFR 202.5(k) require FHA-approved mortgagees and lenders to register all branch offices where they originate Title I or II loans or submit applications for mortgage insurance. As the mortgage industry has evolved to better leverage technology and remote service delivery, the Department of Housing and Urban Development's (HUD) requirement to register branch offices is inconsistent with current industry practices.

This proposed rule would revise 24 CFR 202.5(k) to give mortgagees and lenders the option to register and maintain branch offices with HUD, which allows them to be placed on the HUD Lender List Search page.

In addition, the proposed rule would revise 24 CFR 202.5(i) to make branch registration fees applicable only to branch offices the lender or mortgagee has registered with HUD; branch offices not registered with HUD will not be subject to branch registration fees and will not be included on the HUD Lender List Search page.

These changes will simplify FHA lender and mortgagee approval processes to align with industry practices and eliminate unnecessary fees for FHA-approved entities.

Interested stakeholders are encouraged to review and submit comments on the proposed rule following the methods outlined in the Federal Register notice through May 1, 2023.

FHA INFO 2023-13 - FR Notice: Final Rule Adjustable Rate Mortgages: Transitioning from LIBOR to Alternate Indices (Docket No. FR-6151-F-03)

March 1, 2023 - Today, the Federal Housing Administration (FHA) published the Adjustable Rate Mortgages: Transitioning from LIBOR to Alternate Indices final rule (Docket No. FR-6151-F-03) in the Federal Register. In the final rule, FHA establishes the spread-adjusted Secured Overnight Financing Rate (SOFR) as a Secretary-approved index for the transition of existing FHA insured adjustable rate mortgages (ARMs) from the London Interbank Offered Rate (LIBOR) index after the one-year and one-month LIBOR indices cease to be published after June 30, 2023.

Also, the final rule updates the regulations by:

• Removing LIBOR and approving SOFR as a Secretary-approved index for newly originated forward ARMs;
• Codifying the same changes made for newly originated reverse Home Equity Conversion Mortgages (HECM) ARMs that were published in Mortgagee Letter 2021- 08;
• Making clarifying regulatory changes to the requirements for monthly adjustable HECM ARMs; and
• Establishing a ten percentage points maximum lifetime adjustment cap for monthly adjustable HECM ARMs.

FHA is publishing this final rule after carefully considering all public comments received to its proposed rule published in the Federal Register on October 19, 2022. FHA’s updated transition policy for LIBOR-based ARMs will now generally align with Fannie Mae, Freddie Mac, and Ginnie Mae's policies replacing LIBOR with the SOFR index.

FHA will soon publish a Mortgage Letter that provides implementation guidance for the provisions in the final rule.

The regulations in this final rule are effective on March 31, 2023.

FHA INFO 2023-11 - Reduction of Federal Housing Administration (FHA) Annual Mortgage Insurance Premium (MIP) Rates (ML 2023-05)

February 22, 2023 - The Federal Housing Administration (FHA) announced today through Mortgagee Letter 2023- 05 a 30 basis point reduction to the Annual Mortgage Insurance Premiums (annual MIP) it charges borrowers for FHA-insured Single Family Title II forward mortgages. This reduction supports the Biden-Harris Administration’s goals of making homeownership more accessible and affordable for the nation’s homebuyers. FHA mortgage insurance facilitates broader availability of mortgage financing to those not adequately served by the conventional mortgage market, particularly households of color for whom FHA-insured mortgages have been a cornerstone of access to affordable homeownership.

Today’s Mortgagee Letter provides additional information for mortgagees to implement the annual MIP reductions effective for mortgages endorsed for FHA insurance on or after March 20, 2023.

FHA estimates this reduction will benefit approximately 850,000 borrowers over the coming year, saving them $678 million in aggregate in the first year of their FHA-insured mortgage. For the average borrower purchasing a one-unit single family home with a down payment of 3.5 percent and a mortgage amount of $467,700 – the national median home price as of December 2022 - FHA’s annual MIP reduction will save them more than $1,400 in the first year of their mortgage.

FHA INFO 2023-10 - Electronic Filing of all insurance claims on FHA Title II Single Family Mortgages (ML 2023-04)

February 16, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-04, Electronic Filing of all insurance claims on FHA Title II Single Family Mortgages. The ML eliminates paper-based filings and informs mortgagees of the digital claim submission options for all insurance benefit claims on FHA single family forward mortgages.

In recent years, FHA has provided mortgagees with multiple options for filing electronic claims as paper claim filings are rarely received. Through the electronic submission options, mortgagees and FHA can increase operational efficiency and reduce costs by processing and storing claim information and documentation in a shared, transparent digital platform. This effort supports FHA’s ongoing technology enhancements and aligns with industry standards.

Mortgagees are required to file all insurance claims through the FHA Catalyst: Claims Module, FHA Connection (FHAC), or the Electronic Data Interchange (EDI) as outlined in the ML.

The provisions of this ML must be implemented no later than March 1, 2023, and will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

For guidance on submitting claims, mortgagees should review the updated Claim Filing Technical Guide on the Single Family Housing Policy Handbook 4000.1 Supplemental Documents web page.

FHA INFO 2023-08 - FR Notice: Request for Information (RFI) Regarding Rehabilitation Mortgages (Docket No. FR-6366-N-01)

February 14, 2023 - Today, the Federal Housing Administration (FHA) published in the Federal Register, Request for Information (RFI) Regarding Rehabilitation Mortgages (Docket No. FR-6366-N-01). The RFI solicits stakeholder input regarding the barriers that limit the origination of FHA-insured mortgages under the 203(k) Rehabilitation Mortgage Insurance Program and lender participation in the Program. FHA’s effort to gain industry and public insight is being conducted to enhance the 203(k) Program; and increase its availability to borrowers seeking affordable FHA-insured mortgage financing or refinancing for the purchase and rehabilitation of homes in need of repair.

As noted in today’s RFI, FHA recognizes that there are perceived or actual impediments to the Program which are constricting its use and availability through FHA-approved lenders.

Through the RFI, FHA is requesting comments from the industry and public to better understand these impediments and identify pathways to improve the Program to provide greater support for affordable homeownership opportunities, particularly for first-time homebuyers and underserved borrowers. The RFI also seeks input on how 203(k) mortgages can support HUD’s goal to help consumers make energy-saving improvements and to protect their homes from natural disasters.

Interested stakeholders are encouraged to review and provide comments on the RFI through April 15, 2023, following the methods outlined on the RFI.

FHA INFO 2023-07 - CORRECTED AND REPUBLISHED: Expansion of the COVID-19 Recovery Loss Mitigation Options (ML 2023-03)

February 13, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-03, Corrected and Republished: Expansion of the COVID-19 Recovery Loss Mitigation Options. This ML makes three corrections or clarifications in Mortgagee Letter 2023-02 and restates the policies in ML 2023-02, as originally published on January 30, 2023. Specifically, the ML:

• Corrects the date when mortgagees may submit COVID-19 Loss Mitigation incentive claims. Mortgagees remain eligible for incentive payments for COVID-19 Loss Mitigation Options executed on or after January 26, 2023.
• Corrects an error in Section III.A.2.o.iii(B)(3), Additional Evaluation for COVID-19 Recovery Options, by replacing bracketed language with the appropriate date, January 30, 2023.
• Adds language to COVID-19 Recovery Modification, Target Payment Not Achieved, Handbook 4000.1, Section III.A.2.o.iii(C)(2)(c), Step 7, to clarify the offer of a COVID19 Recovery Standalone Partial Claim is subject to its availability.

Updates in the ML will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2023-06 - Expansion of the COVID-19 Recovery Loss Mitigation Options (ML 2023-02)

January 30, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-02, Expansion of the COVID-19 Recovery Loss Mitigation Options. This ML will extend the time period that the Single Family COVID-19 Recovery Options are available and expand the availability of these options to additional borrowers.

Specifically, the changes:

• Extend the COVID-19 Recovery Loss Mitigation Options to all borrowers in default or imminent default on their mortgage payments, regardless of the reason for their hardship, including non-occupant borrowers.
• Update the FHA COVID-19 Recovery Standalone Partial Claim and the COVID-19 Recovery Modification to raise the maximum partial claim amount permitted from 25 percent to the 30 percent allowed by statute.
• Provide incentive payments to servicers for the successful completion of COVID-19 Recovery Options.
• Add a new Default status code to the Single Family Default Monitoring System (SFDMS) Reporting Codes.

As a result of the expansion of the COVID-19 Recovery Options, FHA-Home Affordable Modification Program (HAMP) options, and HUD’s non-COVID Pre-Foreclosure Sale and Deed-in-Lieu (DIL) of Foreclosure options are suspended concurrent with this ML.

The provisions of this ML may be implemented immediately, but must be implemented no later than April 30, 2023, in all cases where the mortgagee has not sent documents to the borrower to complete any Home Retention loss mitigation option.

Updates in the ML will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

The SFDMS Reporting Codes and Reporting Data elements document and Claim Filing Technical Guide have been updated and are located on the Single Family Housing Policy Handbook 4000.1 Supplemental Documents web page.

FHA INFO 2023-05 - Updated Instructions for Single Family Forward Mortgage Model Documents for Government Sponsored Enterprises Security Instrument and Note Updates (ML 2023-01)

January 20, 2023 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-01, Updated Instructions for Single Family Forward Mortgage Model Documents for Government Sponsored Enterprises Security Instrument and Note Updates.

On July 7, 2021, the Government Sponsored Enterprises (GSE) announced updates to its Security Instrument and Note (2023 GSE Forms) with an effective date of January 1, 2023. The 2023 GSE Forms do not align with FHA’s published instructions for adapting the 2001 versions of the GSE documents. This ML announces FHA’s updated instructions containing FHA-specific modifications for the 2023 GSE Forms that must be made.

FHA is not discontinuing its acceptance of the 2001 GSE security instrument and note; instead, FHA will continue to accept either the 2001 or 2023 GSE security instrument and note provided they use the appropriate FHA instructions. Instructions for the 2001 GSE security instrument and note, and 2023 GSE security instrument and note are linked in the Single Family Housing Policy Handbook 4000.1, Section II.A.6.b and are located on the Single Family Model Documents web page. These changes apply to all FHA Title II Forward Mortgages.

The provisions of this ML apply to all FHA Title II Forward Mortgage programs and are effective upon publication of ML 2023-01.

FHA INFO 2022-107 - FHA Issues Additional Extensions to Temporary Regulatory and Handbook Waivers: Alternative Methods for Face-to-Face Interviews with Borrowers

December 20, 2022 - Today, the Federal Housing Administration (FHA) published extensions to its temporary regulatory and Single Family Housing Policy Handbook 4000.1 waivers which allow mortgagees to utilize alternative methods for conducting face-to-face interviews with borrowers in accordance with FHA’s early default intervention requirements. These alternatives provide practical and useful methods for conducting face-to-face interviews with borrowers that do not jeopardize the health and safety of borrowers or servicer representatives.

FHA initially published temporary partial waivers of these requirements on March 13, 2020, and previously extended them through December 31, 2022, in response to the ongoing public health concerns due to the COVID-19 pandemic. FHA is further extending the waivers due to the COVID-19 pandemic, the spread of the Respiratory Syncytial Virus (RSV) and seasonal flu, and current staffing and resource constraints affecting mortgage servicers. The waivers are now effective through December 31, 2023.

FHA INFO 2022-105 - COVID-19 Home Equity Conversion Mortgage (HECM) Property Charge Repayment Plan (ML 2022-23)

December 15, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-23, COVID-19 Home Equity Conversion Mortgage (HECM) Property Charge Repayment Plan. This ML announces and provides requirements for a new property charge repayment plan option for senior homeowners with HECMs who are behind on their property charge payments due to COVID-19.

The COVID-19 HECM Property Charge Repayment Plan allows servicers to offer eligible homeowners up to five years (60 months) to repay property charges advanced by the servicer. This additional time to repay delinquent property charges will increase the likelihood that affected borrowers will be able to cure property charge delinquencies and avoid foreclosure.

Mortgagee Letter 2022-23’s COVID-19 HECM Property Charge Repayment Plan policies include:

• Making this option available to borrowers who have applied for Homeowner Assistance Fund (HAF) assistance, if the HAF funds combined with the borrower’s ability to repay will satisfy the servicer’s advances for the delinquent property charges;
• Allowing the COVID-19 HECM Repayment Plan regardless of whether the borrower has been unsuccessful on a prior repayment plan and whether the borrower owes more than $5,000 in property charge advances; and
• Requiring only a verbal attestation from the borrower that they have been impacted by COVID-19.

The provisions of this ML are effective immediately.

FHA INFO 2022-104 - Clarification of Conflict of Interest and Dual Employment Policy for Most Title II Single Family FHA-Insured Mortgage Transactions (ML 2022-22)

December 15, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-22, Clarification of Conflict of Interest and Dual Employment Policy for Most Title II Single Family FHA-Insured Mortgage Transactions.

This ML revises FHA policy to permit individuals that do not have a direct impact on the mortgage approval decision to have various compensated positions for services performed and allowed by HUD, provided that the transaction complies with all applicable federal, state, and local laws, rules, and requirements. This change aligns FHA requirements with those of other industry participants.

In addition, today’s ML consolidates various conflict of interest and dual employment subsections of Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) into one subsection and clarifies FHA policy regarding prohibited conflicts of interest by individuals that directly impact the mortgage approval decision, and permitted dual employment for other individuals performing services in a single FHA-insured transaction. The policy consolidation and clarifications contained in this ML are designed to facilitate easier understanding of existing FHA requirements based on feedback FHA has previously received.

The clarifications apply to all FHA-insured transactions unless otherwise specified in program requirements. Additionally, the clarifications:

• Explicitly prohibit individuals directly impacting the loan approval decision from having multiple roles or sources of compensation, either directly or indirectly, from the same FHA-insured transaction;
• Reinforce the mortgagee’s responsibility to ensure compliance with updated conflict of interest guidelines and existing policy regarding prohibited payments; and
• Consolidate general conflict of interest and dual employment policy in Handbook 4000.1.

The provisions of this ML are effective immediately.

These updates will be incorporated into a future version of Handbook 4000.1.

FHA INFO 2022-101 - 2023 Nationwide Forward Mortgage Limits (ML 2022-20) and 2023 Nationwide Home Equity Conversion Mortgage (HECM) Limits (ML 2022-21)

December 1, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2022-20, 2023 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. These new loan limits are effective for case numbers assigned on or after January 1, 2023, through December 31, 2023.

FHA’s “floor” and “ceiling” loan limits will increase from $420,680 and $970,800 in Calendar Year (CY) 2022 to $472,030 and $1,089,300 [1] in CY 2023, respectively, for a one-unit property.

The following table lists the CY 2023 FHA loan limit thresholds for low-cost and high-cost areas:

Mortgagees may view the list of areas at the “ceiling” and areas with limits between the “floor” and “ceiling” — along with lists that can be sorted by state, county, or Metropolitan Statistical Area (MSA) or by calendar year — on the Maximum Mortgage Limits web page.

CY 2023 loan limits for FHA-insured Title II forward mortgages will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

[1]Alaska, Hawaii, Guam, and the U.S. Virgin Islands are subject to a higher “ceiling.” See Mortgagee Letter for details.

FHA INFO 2022-98 - FHA Extends Temporary Partial Waivers to its Home Equity Conversion Mortgage Loss Mitigation Policies for Senior Borrowers Impacted by COVID-19

November 28, 2022 - Today, the Federal Housing Administration (FHA) granted two temporary partial waivers to its Home Equity Conversion Mortgage (HECM) loss mitigation policies. Both waivers continue the same flexibilities outlined in prior waivers dated June 16, 2022, that expire on December 31, 2022.

• Temporary partial waiver of Mortgagee Letter 2015-11, Loss Mitigation Guidance for Home Equity Conversion Mortgages (HECMs) in Default due to Unpaid Property Charges. This waiver allows mortgagees to offer repayment plans to HECM borrowers with unpaid property charges regardless of their total outstanding arrearage and is effective through December 31, 2023.
• Temporary partial waiver of Mortgagee Letter 2016-07, Expanded Permissive Loss Mitigation for Home Equity Conversion Mortgages (HECMs) and Mortgagee’s Optional Extension to Submitting a Due and Payable Request. This waiver permits mortgagees to seek assignment of a HECM immediately after using their own funds to pay unpaid property taxes and insurance on or after March 1, 2020, by temporarily eliminating the three-year waiting period for such assignments. The waiver is effective through December 31, 2023.

These waivers provide mortgagees with continued flexibility to help senior homeowners with HECMs who still experience significant financial difficulties due to the COVID-19 pandemic. They enable mortgagees to offer relief to HECM borrowers who could not make timely property charge payments due to financial hardships resulting from the pandemic and provide mortgagees with additional flexibility when assigning loans to HUD.

Mortgagees are encouraged to review the waivers and policies outlined in Mortgagee Letters 2015-11 and 2016-07.

FHA INFO 2022-97 - Rescinding the Mandatory Use Date for the Federal Housing Administration (FHA) Catalyst: Electronic Appraisal Delivery (EAD) Module (ML 2022-19)

November 22, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-19, Rescinding the Mandatory Use Date for the Federal Housing Administration (FHA) Catalyst: Electronic Appraisal Delivery (EAD) Module. This ML rescinds the mandatory use date for mortgagees to submit appraisals for single family Title II forward and reverse mortgage endorsements through the FHA Catalyst: EAD Module. FHA is also discontinuing the onboarding of new mortgagees and all activities related to integrating with FHA Catalyst: EAD Module.

The modernization of FHA’s information technology remains a top priority, and FHA is dedicated to delivering the highest quality 21st century technology that best meets its business needs and the needs of program participants. To further this objective, FHA indicated in its September 15, 2022, FHA INFO 2022-81 that it was reassessing aspects of the development and implementation of the EAD Module on the FHA Catalyst platform. After thoroughly evaluating the current structure and capabilities of the module, FHA determined that the most effective technology solution for electronic appraisal submission is one that maintains an industry-aligned external EAD portal that interfaces with the FHA Catalyst platform for data storage, dissemination, and analysis.

The FHA Catalyst: EAD Module will remain available for:

• initial appraisal submissions for all cases through March 17, 2023; and
• resubmission of appraisals for cases previously submitted to the FHA Catalyst: EAD Module through October 14, 2023.

After October 14, 2023, the FHA Catalyst: EAD Module will no longer be available for appraisal submissions, and all appraisals must be submitted through FHA’s non-Catalyst, legacy EAD portal.

Review ML 2022-19 for the details.

FHA INFO 2022-96 - FHA Now Accepts Private Flood Insurance for FHA-insured Mortgages

November 21, 2022 - Today, the Federal Housing Administration (FHA) published the Acceptance of Private Flood Insurance for FHA-Insured Mortgages final rule (Docket No. FR-6084-F-02) in the Federal Register. With today’s publication, FHA will now accept private flood insurance policies where the borrower chooses to obtain a private policy instead of flood insurance available through the National Flood Insurance Program. This change applies to all FHA-insured Single Family Title II mortgages, including Home Equity Conversion Mortgages (HECM), and loans insured under FHA’s Title I programs.

Specifically, the final rule updates FHA regulations to allow borrowers the option to purchase a comparable private insurance policy meeting FHA requirements in lieu of a National Flood Insurance Program (NFIP) policy for FHA-insured mortgages secured by properties located in Federal Emergency Management Agency (FEMA)-designated Special Flood Hazard Areas (SFHAs).

FHA is publishing this final rule after careful consideration of all public comments received to its proposed rule that was published in the Federal Register (FR-6084-P-02) on November 23, 2020. FHA’s updated flood insurance policy requirements will now generally align with the requirements of other federal agencies, differing where needed to protect borrowers and the Mutual Mortgage Insurance (MMI) Fund.

FHA also published today Mortgagee Letter (ML) 2022-18, Acceptance of Private Flood Insurance for FHA-Insured Mortgages, which provides the guidance necessary to implement the provisions in the final rule.

The guidance in the ML is effective on December 21, 2022. Updates in the ML will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

Technology Updates

As part of its implementation and consistent with HUD’s Climate Action Plan, FHA will now begin collecting additional detailed flood insurance information from lenders. The additional data will enable FHA to perform more robust data analytics on FHA-insured properties in flood zones and the types of flood insurance policies on properties with FHA-insured mortgages. As noted in the ML, mortgagees must now report the following additional required flood insurance information in the insurance application screen in FHA Connections (FHAC):

• Indicate NFIP, private flood insurance, both, or no flood insurance; and
• Provide flood insurance policy information for each type of policy as applicable, including building coverage amount, policy number, and insurance company name.

FHA INFO 2022-95 - Fiscal Year 2022 FHA Annual Report to Congress

November 15, 2022 - Today, the Department of Housing and Urban Development (HUD) released its Federal Housing Administration (FHA) Annual Report to Congress on the financial status of FHA’s Mutual Mortgage Insurance Fund (MMI Fund) for fiscal year (FY) 2022. As detailed in the report:

The percentage of first-time homebuyers using FHA insurance was approximately 84 percent of total FHA forward mortgage purchase endorsements.

The share of mortgages insured by FHA to borrowers of color reached 29 percent of all FHA forward mortgage insurance endorsements.

The MMI Fund’s overall Capital Ratio is 11.11 percent, an increase of three percentage points from FY 2021.

The performance of the forward book of business posted a stand-alone capital ratio of 10.47 percent, increasing by 2.48 percentage points from FY 2021.

The Home Equity Conversion Mortgage (HECM) portfolio stand-alone capital ratio improved to 22.77 percent, an increase of 16.69 percentage points from FY 2021.

FHA’s serious delinquency rate as of September 30, 2022 was 4.77 percent. This is a decrease of four percentage points in just one year and a reduction of more than seven percentage points from the peak of 11.90% experienced in November 2020.

FHA INFO 2022-94 - Rehabilitation Mortgage Program Fact Sheets for FHA-Approved Lenders

November 7, 2022 - Today, the Federal Housing Administration (FHA) announced the availability of informational fact sheets for its 203(k) Rehabilitation Mortgage Insurance Program (203(k) Program). These materials are designed for FHA-approved lenders and are intended to increase their awareness and understanding of the features and benefits of FHA’s 203(k) Program.

The 203(k) Program is FHA’s primary program for financing the rehabilitation and repairs, both structural and non-structural, of single family properties. The program can also be used by borrowers wanting to make improvements to increase energy efficiency or to increase the property’s resilience against future disasters as part of a renovation project or repair of disaster-related damage.

The information presented in the fact sheets can be helpful to lenders, homebuyers, and homeowners and includes a program overview and a comparison of the 203(k) program versus other available programs.

• 203(k) Program Lender Fact Sheet
• Rehabilitation Loan Programs Comparison Fact Sheet

These fact sheets can be found on the 203(k) Program webpage under “More Resources.” Additional fact sheets for consumers and 203(k) Consultants will be announced in upcoming FHA INFO announcements.

FHA INFO 2022-92 - Update to the Electronic Data Interchange File Layout for Default Reporting

October 27, 2022 - Today, the Federal Housing Administration (FHA) announced an update to the Electronic Data Interchange (EDI) file layout (TS 264) used to report the Unpaid Principal Balance (UPB) on defaulted loans.

FHA’s EDI file format update increases the number of available characters when reporting UPB values from 6 to 10. This change enables FHA servicers to transmit data for defaulted loans with UPBs over $1,000,000.00. The 10-characters format reserves the first 8 characters for reporting the dollar amounts and the last 2 characters for cents with no leading zeros. See formatting examples below:

Example 1
$1,321,254.00 would be sent in the TS 264 as 132125400

Example 2
$33,987.65 would be sent in the TS 264 as 3398765

Example 3
$1.25 would be sent in the TS 264 as 125

Servicers that electronically transmit this data must submit to the EDI through TS 264 using this format beginning with the February 2023 reporting cycle. FHA encourages servicers to work with their technology partners, service providers, and/or Value Added Networks (VAN) to develop and test their TS 264 data files to be submitted to EDI before the target reporting cycle.

For more information visit the EDI Implementation Guide Webpage. For questions or assistance with EDI, contact HUD's EDI Help Desk at EDI.HELP.Desk@hud.gov.

FHA INFO 2022-90 - FR Notice: Adjustable Rate Mortgages: Transitioning from LIBOR to Alternate Indices (Docket No. FR-6151-P-02)

October 19, 2022 - Today, the Federal Housing Administration (FHA) published a proposed rule in the Federal Register, Adjustable Rate Mortgages: Transitioning from LIBOR to Alternate Indices (Federal Register Docket No. FR-6151-P-02), for public comment. The rule proposes to transition existing FHA-insured forward and Home Equity Conversion Mortgage (HECM) Adjustable Rate Mortgages (ARMs) from the London Interbank Offered Rate (LIBOR) to a spread-adjusted Secured Overnight Financing Rate (SOFR) index (after the one-year and one-month LIBOR indices cease to be published on June 30, 2023).

Also, the rule proposes to remove LIBOR and add SOFR as an approved index for newly originated forward ARMs. This change was made for HECM ARMs in Mortgagee Letter 2021- 08 and added to this proposed rule. For HECM monthly ARMs, the proposed rule makes clarifying regulatory changes and establishes a lifetime five percent interest rate cap.

Stakeholders are encouraged to review and provide comments on the proposed rule by following the methods outlined in the Federal Register Notice through November 18, 2022.

FHA INFO 2022-89 - FR Notice: Indexing Methodology for Title I Manufactured Home Loan Limits (Docket No. FR-6207-P-01)

October 18, 2022 - Today, the Federal Housing Administration (FHA) published a proposed rule in the Federal Register, Indexing Methodology for Title I Manufactured Home Loan Limits (Docket No. FR6207-P-01), for public comment. As detailed in the proposed rule, FHA proposes to establish indexing methodologies to annually calculate the loan limits for Manufactured Home Loans, Manufactured Home Lot Loans, and Manufactured Home and Lot Combination Loans insured under the Title I Manufactured Home Loan Program.

This proposed rule creates an indexing methodology based on property data collected by the US Census Bureau and that establishes loan limits based on the number of sections that make up a manufactured home. Instituting this indexing methodology will expand opportunities for borrowers to use affordable FHA-insured financing for manufactured homes titled as personal property, manufactured home lots, or both the manufactured home and the lot.

Interested stakeholders are encouraged to review and provide comments on the proposed rule following the methods outlined in the Federal Register Notice through December 17, 2022.

FHA INFO 2022-88 - FR Notice: Request for Information (RFI) Regarding Small Mortgage Lending (Docket No. FR-6342-N-01)

October 4, 2022 - Today, the Federal Housing Administration (FHA) published in the Federal Register, Request for Information (RFI) Regarding Small Mortgage Lending (Docket No. FR-6342-N-01). FHA recognizes that mortgages with small principal balances present distinct challenges for mortgage originators and servicers. As a result, borrowers in underserved communities often have limited affordable home financing options, particularly in geographic areas where home values are lower.

Today’s RFI seeks input regarding these barriers to small mortgage lending insured through the FHA program, as well as feedback on ways to improve FHA policies and programs to support affordable homeownership opportunities in underserved markets with lower housing prices.

Interested stakeholders are encouraged to review and provide comments on the RFI through December 5, 2022 following the methods outlined in the RFI. Review the RFI Regarding Small Mortgage Lending for additional details.

FHA INFO 2022-86 - Consideration of Positive Rental Payment History for First Time Homebuyers in Forward Mortgage Purchase Transactions (ML 2022-17)

September 27, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-17, Consideration of Positive Rental Payment History for First-Time Homebuyers in Forward Mortgage Purchase Transactions. This ML updates FHA’s Technology Open To Approved Lenders (TOTAL) Mortgage Scorecard to include a borrower’s positive rental payment history as part of the credit risk analysis when applying for FHA-insured financing.

Using rental payment history promotes a more complete credit evaluation, which in turn can expand homeownership opportunities to first-time homebuyers who could have an improved credit score if such information were included in the credit reporting data. Today’s ML allows lenders to assess a first-time homebuyer’s rental payment history and indicate a positive rental payment history in the TOTAL Mortgage Scorecard.

This guidance may be implemented for TOTAL scoring events on or after October 30, 2022, and for case numbers assigned on or after September 20, 2021, allowing lenders to implement the guidance on existing pipeline cases without the need to obtain a new case number. Updates will be incorporated in a future version of the Single Family Housing Policy Handbook (Handbook 4000.1).

FHA INFO 2022-81 -FHA to Reassess Aspects of FHA Catalyst's Electronic Appraisal Delivery Module

September 15, 2022 - Since the start of its information technology (IT) modernization effort in April 2019, the Federal Housing Administration (FHA) has successfully modernized several key systems and associated processes on the FHA Catalyst technology platform. Today, FHA Catalyst’s Case Binder Submission, Claims, and Single Family Default Monitoring System Reporting Modules are handling the exchange and integration of key information for thousands of FHA transactions each week. The FHA Catalyst work remains a top priority, and FHA is dedicated to delivering top-quality 21st century technology for lenders, servicers, and FHA.

To ensure the highest quality technology development, FHA is today announcing that it is reassessing aspects of the development and implementation of the Electronic Appraisal Delivery (EAD) module on the FHA Catalyst platform. As it completes this reassessment, FHA is pausing full completion and integration for the FHA Catalyst: Electronic Appraisal Delivery (EAD) Module.

FHA strongly recommends that industry partners pause EAD onboarding and direct integration activities until final determinations are made regarding the electronic appraisal delivery system for loans originated for FHA insurance endorsement. This recommendation is only for the FHA Catalyst: Electronic Appraisal Delivery Module and does not impact integration or onboarding activities for any other FHA Catalyst module.

FHA will provide further updates on its plans for electronic appraisal delivery as they become available.

FHA INFO 2022-78 - Update to Home Equity Conversion Mortgage (HECM) Program Requirements for Notice of Due and Payable Status (ML 2022-15)

August 31, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-15, Update to Home Equity Conversion Mortgage (HECM) Program Requirements for Notice of Due and Payable Status. The guidance in this ML requires mortgagees to notify the borrower’s estate, heirs, or other party with legal title to the property that the HECM has become due and payable within 30 days of notifying the Secretary of the last surviving borrower’s death.

This ML updates the policy issued in ML 2015-10, that required mortgagees to notify the estate, heirs, or other party with legal title to the HECM property that the HECM has become due and payable within 30 days of the death of the borrower. The new policy aligns the notification requirements following a HECM becoming due and payable due to the death of the last surviving borrower for HECMs, regardless of the case number assignment date or the due and payable status.

This policy may be implemented immediately; however, it must be implemented no later than 90 days from the date of this ML for HECMs that become due and payable on or after the publication date of this ML.

FHA INFO 2022-77 - Unique Entity Identifier for FHA-Approved Lenders, Mortgagees, and Institutions Seeking FHA Approval (ML 2022-14)

August 24, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-14, Unique Entity Identifier for FHA-Approved Lenders, Mortgagees, and Institutions Seeking FHA Approval.

This ML establishes the requirement announced by the General Services Administration (GSA) that entities engaged in or seeking to do business with the federal government have an active Unique Entity Identifier (UEI) from GSA’s System of Award Management (SAM.gov). The UEI is an alpha-numeric identifier used by the federal government to maintain consistent name and address data about non-federal entities doing business with the government.

The requirement applies to all FHA-approved lenders and mortgagees, and entities seeking FHA approval and will be captured as part of an institution’s data in the Lender Electronic Assessment Portal (LEAP) or application for FHA approval.

The ML also provides information on where to register for a UEI and update an Institution Profile in LEAP.

The provisions of this ML may be implemented immediately but must be implemented no later than December 31, 2022.

These updates will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

FHA INFO 2022-76 - FHA and Ginnie Mae Seeks Public Input on Enhancements to its Title I Manufactured Housing Programs

August 11, 2022 - Recently, FHA and Ginnie Mae published a Request for Information (RFI) to seek public input on their Title I Manufactured Housing Programs. The RFI supports the ongoing efforts of the Biden-Harris Administration to increase the supply of affordable housing options through manufactured housing.

The RFI gives industry stakeholders an opportunity to address a range of questions regarding the following topics:

• opportunities to improve the use and effectiveness of the Title I manufactured housing program, including the program's loan limits;
• FHA and Ginnie Mae lender eligibility requirements: and
• how to make the programs more competitive in both the primary and secondary markets.

Interested stakeholders are encouraged to provide input on the RFI prior to the conclusion of the comment period, which ends on September 26, 2022. For instructions on how to submit input, stakeholders must follow the instructions outlined in the RFI also available on Ginnie Mae's Newsroom web page. For more information, read Ginnie Mae's press release.

FHA INFO 2022-71 - Revised Appraisal Validity Periods (ML 2022-11); Appraisal Logging Changes in FHA Connection

July 12, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-11, Revised Appraisal Validity Periods.

For most Title II forward and Home Equity Conversion Mortgage (HECM) originations, FHA is extending the initial appraisal validity period from 120 days to 180 days and the appraisal update validity period from 240 days to one year. These changes align FHA appraisal validity periods with industry practices, making it easier for lenders to operationally manage appraisal validity while potentially reducing appraisal costs for mortgagees and ultimately, borrowers seeking FHA-insured mortgage financing.

The appraisal validity period establishes the maximum time mortgagees may use an appraisal report for an FHA-insured mortgage. This also includes the time FHA permits mortgagees to utilize an appraisal update to extend the initial appraisal validity period. With these changes, the current optional 30-day extension is no longer necessary. In addition, FHA is removing the requirement for an update to be performed before the initial appraisal has expired.

The ML, which applies to the following FHA Single Family Title II Forward and HECM programs, outlines the policy updates noted below:

For Origination through Post-Closing/Endorsement, the ML:

• applies to case numbers assigned on or after June 1, 2022;
• updates the initial appraisal validity period from 120 days to 180 days from the effective date of the appraisal report;
• extends the appraisal update validity period from 240 days to one year from the effective date of the initial appraisal report; and
• eliminates the optional 30-day extension.

For Servicing and Loss Mitigation, the ML:

• applies to appraisals with effective dates on or after July 12, 2022; and
• updates the initial appraisal validity period from 120 days to 180 days from the effective date of the appraisal report.

For HECM Financial Assessment and Property Charge, the ML:

• applies to case numbers assigned on or after June 1, 2022;
• updates the initial appraisal validity period from 120 days to 180 days from the effective date of the appraisal report; and
• extends the appraisal update validity period from 240 days to one year.

The updates highlighted in this ML will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

Appraisal Logging Changes in FHA Connection

Modifications to the appraisal-related functionality in FHA Connection (FHAC) will also be implemented. For all case numbers assigned on or after September 6, 2022, the Appraisal Effective Date field on the FHAC Appraisal Logging screen will no longer be editable.

Appraisal Logging for this field is automatically pre-filled with the information submitted from the electronic appraisal report.

The effective date of the appraisal establishes the start of the appraisal validity period and indicates the date the appraiser inspected the property. The effective date of the appraisal must be reported accurately on the appraisal report and in FHA systems. A revised appraisal submission will be required for any changes to the Appraisal Effective Date field in FHAC.

Edits to this field submitted through the Business-to-Government (B2G) connection, for case numbers assigned on or after September 6, 2022, will not be processed.

FHA INFO 2022-69 - FHA Offers New Flexibilities for Borrowers Previously Affected by COVID-19

July 7, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-09, Calculating Effective Income after a Reduction or Loss of Income for Borrowers Affected by Presidentially-Declared COVID-19 National Emergency.

The guidance in this ML allows flexibility in calculating income for borrowers who experienced a gap in employment and/or a reduction or loss of income due to a COVID-19 related economic event, where the borrower’s effective income is now stable. These flexibilities will allow more borrowers who have recovered from a COVID-19 related economic event to be appropriately evaluated for FHA financing.

FHA defines a COVID-19 Related Economic Event as a temporary: (1) loss of employment, (2) reduction of income, and/or (3) reduction of hours worked during the Presidentially-Declared COVID-19 National Emergency. As a result, the ML updates the borrower’s effective income calculation guidelines for the following sections in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1):

• Sections II.A.4.c.iii and II.A.5.b.iii ‒ Primary Employment
• Sections II.A.4.c.iv and II.A.5.b.iv ‒ Part-Time Employment
• Sections II.A.4.c.v andA.5.b.v ‒ Overtime, Bonus or Tip Income
• Sections II.A.4.c.viii and II.A.5.b.viii ‒ Employed by Family-Owned Business
• Sections II.A.4.c.ix and II.A.5.b.ix ‒ Commission Income
• Sections II.A.4.c.x and II.A.5.b.x ‒ Self-Employment Income
• Sections II.A.4.c.xi and II.A.5.b.xi - Additional Required Analysis of Stability of Employment Income

The policies in this ML are effective for case numbers assigned on or after September 5, 2022; however, mortgagees may begin implementing immediately.

These updates will be incorporated in a future version of Handbook 4000.1.

FHA INFO 2022-68 - FHA Publishes Updates to Single Family Housing Policy Handbook 4000.1

June 30, 2022 - Today, the Federal Housing Administration (FHA) published the latest version of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). This update includes enhancements and revisions to existing guidance as well as various technical edits. In most cases, this newly added language augments and enhances existing policy.

FHA remains committed to making it easier for stakeholders to conduct business by maintaining and enhancing Handbook 4000.1 with regularly scheduled updates to ensure it remains the comprehensive source of policy guidance for single family mortgage originators, servicers, and other stakeholders.

This update contains revisions and reflects the incorporation of certain Mortgagee Letters (MLs) with the effective dates as announced in those MLs and to Handbook 4000.1 Sections I, II, III, and IV, Appendix 4.0, Glossary, and the Claim Filing Technical Guide. Handbook 4000.1 updates are effective as follows:

• The Handbook 4000.1 Transmittal reflects incorporation of certain MLs with the effective dates as previously announced in the corresponding ML.
• Changes identified in the Transmittal for i Section II.A of Handbook 4000.1 may be implemented immediately but must be implemented for mortgages with case numbers assigned on or after September 26, 2022.
• All other changes may be implemented immediately but must be implemented no later than September 26, 2022.

In addition to the incorporation of MLs, highlights of updates include, but are not limited to, the following new guidance:

• Section I — Doing Business with FHA
  • I.A.6.j.i Use of Contractors – Permissible Use: Updated guidance to include the use of Third Party Verification vendors for occupancy verification.
• Section II — Origination through Post-Closing/Endorsement
  • II.A.1.a.i(A)(2)(b) Information Obtained via Internet: Removed requirement to review the URL for documents obtained from a website.
  • II.A.8.d.vi(C)(2)(a)(ii) Streamline Refinances – Occupancy Requirements – Required Documentation: Updated guidance to include the use of Third Party Verification vendors for occupancy verification for streamline refinances.
• Section III — Servicing and Loss Litigation
  • III.A.2.i.ii(A) Loss Mitigation Review Process – Review Requirements – 90-Day Review; and III.A.2.i.vii(A) Loss Mitigation Review Process – Loss Mitigation Agreements – Standard: Clarified the Mortgagee must exclude certain coBorrowers from the loss mitigation review requirements to comply with state, local, and federal servicing laws.
• Section IV — Claims and Disposition
  • IV.A.2.a.ii(D) Claim Type 01 – Conveyances – Computation of Claim Amount – Property Preservation and Protection Costs: Clarifies timing of reimbursement of property Preservation and Protection costs.

Stakeholders are encouraged to review and familiarize themselves with the changes outlined in the Handbook 4000.1 Transmittal in its entirety. Additionally, a separate redline version of the Handbook 4000.1 has been posted on the Handbook 4000.1 Information Page. The online version of Handbook 4000.1 is currently being updated and will be available soon.

FHA INFO 2022-65 - FHA Releases Third Webinar in Dispelling Homebuying Myths Series; Finding the Right Home

June 23, 2022 - Today, the Federal Housing Administration (FHA) is launching, Dispelling Homebuying Myths: Finding the Right Home, the third in its four-part webinar series. The webinar series is available on the Single Family Housing Events and Training webpage on HUD.gov and reveals the truth about common myths associated with using an FHA-insured loan to purchase a home.

In addition to providing a resource to prospective homebuyers, this webinar may be useful for loan originators, real estate professionals, and others interested in learning more about FHA insured loans and misconceptions in the homebuying process.

Also released or scheduled for release during National Homeownership Month are additional topics in the series, including Qualifying for a Loan, Affording a Home, and Tips for Buying Your First Home. FHA will communicate details in a future FHA INFO

FHA INFO 2022-64 - FHA Extends Temporary Partial Waivers to its Home Equity Conversion Mortgage Policy for Senior Borrowers Impacted by COVID-19

June 23, 2022 - Today, the Federal Housing Administration (FHA) issued the following temporary partial waivers to its Home Equity Conversion Mortgage (HECM) policies. These waivers provide mortgagees with expanded flexibility to help senior homeowners with HECMs who continue to experience significant financial difficulties due to the COVID-19 pandemic.

• Temporary partial waiver of Mortgagee Letter 2015-11. This waiver allows mortgagees to offer repayment plans to HECM borrowers with unpaid property charges regardless of their total outstanding arrearage and is effective through December 31, 2022.
• Temporary partial waiver of Mortgagee Letter 2016-07. This waiver permits mortgagees to seek assignment of a HECM immediately after using their own funds to pay unpaid property taxes and insurance on or after March 1, 2020, by temporarily eliminating the three-year waiting period for such assignments. The waiver is effective through December 31, 2022.

As the nation continues its recovery from COVID-19, these waivers offer relief to HECM borrowers who were unable to make timely property charge payments due to financial hardships resulting from the pandemic.

Mortgagees are encouraged to thoroughly review both waivers and the policies outlined in Mortgagee Letters 2015-11 and 2016-07.

FHA INFO 2022-58 - FHA Frequently Asked Questions Website Transitions to New Platform

June 13, 2022 - Today, the Federal Housing Administration (FHA) announced that its Frequently Asked Questions (FAQ) website has transitioned to a new platform. The website provides information about FHA’s products and services to industry stakeholders and consumers.

The new platform introduces improvements to the search functionality and the overall user experience. FHA will continue to expand on these enhancements in the coming months.

Interested parties may continue to view the FHA FAQ website at www.hud.gov/answers, which will automatically redirect to the new platform. For the best user experience, access the website through the Google Chrome or Microsoft Edge browsers.

FHA INFO 2022-46 - Updated Frequently Asked Questions and Industry Conference Call Regarding the Department of Treasury's Homeowner Assistance Fund

May 6, 2022 - Today, the Federal Housing Administration (FHA) is releasing updated frequently asked questions (FAQs) regarding the Department of Treasury's Homeowner Assistance Fund (HAF).

The FAQs clarify when a mortgagee may place a foreclosure action on hold when a borrower has applied for or will be utilizing HAF funds. Mortgagees are strongly encouraged to work with borrowers to explore eligible options that promote sustainable homeownership.

For additional information, FHA will host an industry conference call for servicers of FHA insured mortgages and other interested stakeholders. The details are as follows:

Date: Thursday, May 12 at 2:00 PM ET
Phone: 1-844-867-6167
Access Code: 9149374

Stakeholders are encouraged to join the call and can view the FAQs by visiting the FHA Knowledge Base webpage at www.hud.gov/answers, and simply type “HAF” in the search box or select “HUD NSC Servicing” on the left panel, then select the subcategory “Treasury Homeowner Assistance (HAF) Program."

FHA INFO 2022-45 - Expanding Affordable Housing Supply Through FHA's Claims Without Conveyance of Title (CWCOT) Process (ML 2022-08)

May 5, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-08, Expanding Affordable Housing Supply Through FHA’s Claims Without Conveyance of Title (CWCOT) Process, which supports the Biden Administration’s efforts to increase the supply of affordable housing and expand access to homeownership for low- and moderate-income homebuyers. The CWCOT post-foreclosure sale process enables mortgagees to sell foreclosed properties that were FHA-insured directly to third parties.

This ML adds an initial 30-day exclusive sales period to benefit buyers that are owner occupants, HUD-approved nonprofits, and governmental entities. Through the exclusive sales period, these specified buyers may bid on properties foreclosed through the CWCOT post foreclosure process before investors have an opportunity to do so. This ML also extends the mortgagee’s conveyance timeline to provide these buyers additional time to obtain financing and complete the sale.

Mortgagees must report the Delinquency/Default Status (DDS) Codes that apply to the CWCOT or CWCOT post-foreclosure sale at the end of each reporting cycle in the Single Family Default Monitoring System (SFDMS). The updated SFDMS Reporting Codes and Reporting Data Elements document is available on the Single Family Housing Policy Handbook 4000.1 Supplemental Documents web page.

This policy may be implemented immediately; however, it must be implemented for all post foreclosure sales associated with defaulted FHA-insured mortgages scheduled to occur 90 days from the publication date of this Mortgagee Letter.

These updates will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2022-43 - Loan Review System (LRS) Access Restored

May 2, 2022 - Today, access to the Federal Housing Administration’s (FHA) Loan Review System (LRS) was restored after it was temporarily shut down while system teams worked to resolve various document errors. FHA has reverted review levels and reset response due dates to minimize the impact on lenders and FHA staff. The system shutdown reduced the number of active reviews that require resubmission of response documents; however, lenders may need to resubmit documents for some cases. Users may need to clear their internet browser caches to access the system.

For technical reasons, FHA was unable to revert Lender Monitoring reviews and some additional loan reviews. FHA staff will work with individual lenders to make appropriate adjustments for those cases. Lenders with other specific requests should contact the FHA Resource Center referenced below.

Although LRS errors have been resolved for new document uploads, lenders and FHA staff are still unable to access most documents submitted prior to the shutdown. System teams continue to work on a comprehensive solution that will restore access to all documents in LRS. FHA will communicate through a future FHA INFO when this solution is implemented.

FHA INFO 2022-41 - Loan Review System (LRS) Temporary Shutdown Extended to May 2, 2022

April 21, 2022 - On Monday, April 11, 2022, the Federal Housing Administration’s (FHA) Loan Review System (LRS) was temporarily shut down while system teams work to troubleshoot and resolve various document errors. The shutdown was implemented to minimize the need for lenders to resubmit response documents once the errors are resolved.

FHA originally estimated that LRS access would be restored by Monday, April 25, 2022. Based on the status of system testing, FHA now expects LRS access to be restored on Monday, May 2, 2022. To ensure that lenders are not adversely impacted by the outage, FHA will reset response due dates and make other appropriate adjustments. Once LRS access is restored

FHA INFO 2022-39 - Federal Register (FR) Notice, Mortgagee Review Board: Administrative Actions (Docket No. FR-6317-N-01)

April 19, 2022 - Today, the Federal Housing Administration (FHA) published in the Federal Register (FR), Mortgagee Review Board: Administrative Actions (Docket No. FR-6317-N-01). This FR Notice is the annual notification of all completed administrative actions taken by the Department of Housing and Urban Development’s (HUD) Mortgagee Review Board from October 1, 2020, through September 30, 2021, where settlement agreements have been reached as of February 28, 2022. The FR notice also includes one notice of administrative action (a withdrawal) which was issued in fiscal year 2019.

The FR Notice provides a description of, and the cause for, the Mortgagee Review Board’s administrative actions against HUD-approved mortgagees in 81 fact-based cases and 17 annual recertification violations.

Read the entire FR Notice by visiting Mortgagee Review Board: Administrative Actions.

FHA INFO 2022-38 - Update to the COVID-19 Recovery Loss Mitigation Options (ML 2022-07)

April 18, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-07, Update to the COVID-19 Recovery Loss Mitigation Options. The ML adds to FHA’s COVID-19 Recovery Loss Mitigation Options, a loan modification with a 40-year term used together with a partial claim.

This ML enables mortgagees to provide a 40-year loan modification with a partial claim option to assist struggling homeowners that are behind on their mortgage payments. The policy is designed to help homeowners reach the targeted 25 percent reduction on the monthly principal and interest portion on their mortgage payment when other COVID-19 Recovery Loss Mitigation Options are unable to do so. Through the 40-year loan modification with a partial claim, more homeowners can retain their homes and avoid foreclosure.

The ML may be implemented immediately; however, it must be implemented no later than 90 calendar days from the publication date of this ML. Additionally, the policy does not affect the effective dates for the COVID-19 Recovery Loss Mitigation Options announced in Mortgagee Letter 2021-18. Mortgagees are encouraged to review this ML in its entirety for detailed policy guidance.

These updates will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2022-36 - Loan Review System Temporary Shutdown

April 11, 2022 - Users of the Federal Housing Administration's (FHA) Loan Review System (LRS) have been experiencing various document errors over the last several weeks. Efforts to resolve the errors have had mixed results. On Monday, April 11, 2022, LRS was temporarily shut down while system teams continue to troubleshoot the issue. The shutdown will minimize the need for lenders to resubmit response documents once the errors are resolved.

FHA anticipates that LRS access will be restored no later than Monday, April 25. To ensure that lenders are not adversely impacted by the outage, FHA will reset response due dates and make other appropriate adjustments. Once LRS access is restored, lenders with specific requests should contact the FHA Resource Center referenced below.

FHA INFO 2022-34 - 40-Year Loan Modification Proposed Rule Will Publish in the Federal Register for Public Comment (Docket No. FR-6263-P-01)

March 31, 2022 - On April 1, 2022, the Department of Housing and Urban Development (HUD) will publish a proposed rule in the Federal Register, Increased Forty-Year Term for Loan Modifications (Docket No. FR-6263-P-01) for public comment; however, it is available to preview today. The rule proposes to increase the maximum modification loan term limit from 360 to 480 months and expands FHA’s current loan modification policy.

When finalized, FHA’s proposal would allow mortgagees to provide a 40-year loan modification option to borrowers who may not otherwise qualify for payment reduction or other loss mitigation options. The proposal also offers an option to borrowers that are facing or experiencing a financial hardship, including those that were financially impacted by the COVID19 pandemic. Extending the loan term limit to 480 months can help borrowers avoid foreclosure by spreading the outstanding mortgage balance over a longer period and making their monthly mortgage payments more affordable.

This change would also align FHA with modifications available to borrowers with mortgages backed by the Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Unites States Department of Agriculture (USDA), which all currently provide a 40-year loan modification option to borrowers.

Interested stakeholders are encouraged to review and provide comments on the proposed rule using the methods outlined in the Federal Register no later than 60 days after the date of publication in the Federal Register.

FHA INFO 2022-32 - Establishing the Claims Standard for Reasonable Payments for Property Preservation and Protection Costs (ML 2022-06)

March 29, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-06, Establishing the Claims Standard for Reasonable Payments for Property Preservation and Protection Costs. This ML updates the policy for property preservation and protection (P&P) costs by establishing a standard for the Department of Housing and Urban Development's (HUD) reimbursement of reasonable P&P costs incurred in connection with Claims without Conveyance of Title (CWCOT) and Conveyance claims.

This FHA policy update ensures that HUD reimburses mortgagees for P&P costs in accordance with FHA’s claim regulations, which provide for reimbursement of reasonable payments for P&P costs. Mortgagee payments for P&P costs are considered reasonable if they are incurred during the P&P period, consisting of the mortgagee’s Reasonable Diligence Time Frame and Conveyance or CWCOT Time Frame, and meet the eligibility and allowance requirements set forth in FHA requirements.

Additionally, the ML updates the following sections of the Single Family Housing Policy Handbook 4000.1:

• Section III.A.2.T.ii(E), Curtailment of Claims; and
• Section IV.A.2.a.ii(D), Claim Type 01 - Conveyances, Computation of Claim Amount, Property Preservation and Protection Costs.

This policy may be implemented immediately; however, it must be implemented no later than 90 days from the date of publication of this ML.

The updates will be incorporated into a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2022-27 - FHA's COVID-19 Recovery Loss Mitigation Options Webinar Available in Spanish

March 18, 2022 - Today, the Federal Housing Administration (FHA) is announcing the availability of a Spanish version of the COVID-19 Recovery Loss Mitigation Options Mortgagee Letter (ML) 2021-18 training webinar.

This pre-recorded webinar discusses in detail FHA’s COVID-19 Loss Mitigation Policy including: all available COVID-19 Loss Mitigation Options and the new COVID-19 Recovery Loss Mitigation Options announced in ML 2021-18.

Servicers of FHA-insured mortgages and other interested stakeholders in FHA transactions can now register to view this no cost, on demand webinar. The webinar is also available on the FHA Servicing & Loss Mitigation Classroom and Webinar Training web page on hud.gov.

En español a continuación:

Este seminario web pregrabado analiza en detalle la Política de Mitigación de Pérdidas por COVID-19 de la FHA, incluyendo: todas las Opciones de Mitigación de Pérdidas causadas por COVID-19 disponibles y las nuevas Opciones de Mitigación de Pérdidas de Recuperación por COVID-19 anunciadas en ML 2021-18.

Los administradores de hipotecas aseguradas por la FHA y otras partes interesadas en las transacciones de la FHA ahora pueden registrarse para poder ver este seminario web en forma gratuita y a petición. El seminario web también está disponible en el Aula de Servicios y Mitigación de Pérdidas de la FHA y en la página web de Seminarios de Capacitación en hud.gov.

FHA INFO 2022-25 - FHA Implements System Enhancements for the Electronic Submission of Flood Insurance Data

March 9, 2022 - Today, the Federal Housing Administration (FHA) is announcing enhancements to FHA Connection (FHAC) that require mortgagees to indicate if property improvements are in a Special Flood Hazard Area (SFHA) and if so, provide the applicable flood insurance data electronically. The enhancements implement new fields for the electronic submission of floodrelated data currently contained in FHA case binders.

This electronic data collection will enable FHA to perform more data analytics on FHA-insured properties in flood zones.

Mortgagees can now submit the following additional flood-related data electronically for single family forward mortgages and Home Equity Conversion Mortgages (HECM) on the corresponding Insurance Application Screens in FHAC:

• Specify if the property improvement is in a SFHA (Zones with “A” or “V” designations)
• Indicate the existence of a final Letter of Map Amendment (LOMA), final Letter of Map Revision (LOMR), or a Federal Emergency Management Agency (FEMA) National Flood Insurance Program Elevation Certificate (FEMA Form 086-0-33) to verify that the property is not in a SFHA
• Provide additional details, as required, which may include:
  • Flood insurance building coverage
  • Flood insurance company
  • Flood insurance policy number
  • Outstanding loan balance at closing
  • 100 percent replacement cost
  • Land cost
  • Land cost source

Mortgagees must continue to include the flood insurance documentation noted above in the FHA Case Binder. These updates are effective for case numbers assigned on or after April 11, 2022. For submissions through FHAC Business-to-Government (B2G), the data must be submitted for case numbers assigned on or after July 11, 2022. The FHAC B2G submission requirements accommodate the new data fields. Refer to the B2G Interface webpage for technical requirements.

Note, these enhancements do not change FHA’s existing flood insurance policy detailed in the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2022-21 - FHA Implements New Portal to Obtain Partial Claim Payoffs or Subordination Checklists

February 24, 2022 - Today, the Federal Housing Administration (FHA) is announcing the availability of a new portal for the Department of Housing and Urban Development’s (HUD) Single Family Mortgage Asset Recovery Technology (SMART) system. This self-service portal – the SMART Integrated Portal (SIP) – allows borrowers, servicers, and third parties to request payoff amounts in realtime for FHA partial claims or subordination checklists.

The following can create accounts in SIP:

• Individual borrowers seeking information on their own loans;
• Servicers seeking information on loans that are in their FHA portfolio; and
• Third parties, including title companies, originating lenders, and attorneys acting on behalf of borrowers and title companies. A third-party authorization (TPA) or other document showing legal authorization will be required at the time of account creation for all users who are not the FHA borrower or current servicer.

Creating a SIP Account

New users are required to create an account by following the instructions on the SIP Support Center web page. To complete the account registration process, new users must complete the Multi-Factor Authentication (MFA) process that verifies their account by sending a 6-digit code via text or email.

If assistance is required after an account is created, users may view training videos and user guides after logging on to SIP. Users that are unable to create an account should contact Tech Support using the online chat on the right side of the SIP Support Center web page, which is available Monday through Friday from 8:00 AM to 5:00 PM Central Time.

FHA INFO 2022-18 - Onboarding update for the Transition to the FHA Catalyst: Single Family Default Monitoring System (SFDMS) Reporting Module

February 17, 2022 - Today, the Federal Housing Administration (FHA) is issuing a reminder and onboarding update regarding the transition to the FHA Catalyst: Single Family Default Monitoring System (SFDMS) Reporting Module. Mortgagees can begin reporting delinquent mortgage data through the FHA Catalyst platform beginning March 1, 2022, as announced in Mortgagee Letter 2021-31.

The FHA Catalyst: SFDMS Reporting Module features a modern interface and provides mortgagees with enhanced functionality for default reporting. Additionally, the module offers expanded reporting capabilities, improved data integrity, and the ability to monitor default data in real-time.

Mortgagees should note the following in preparation for the March 1, 2022, transition date:

• Mortgagees that previously requested module access will automatically have their accounts set-up within the FHA Catalyst platform by February 24, 2022. FHA will no longer accept FHA Catalyst: External User Access Request Forms for SFDMS after this date.
• On February 24, 2022, Mortgagee Administrators will begin managing FHA Catalyst: SFDMS module access for their organization’s users. Note, only FHA Connection (FHAC) Application Coordinators are permitted to be FHA Catalyst Mortgagee Administrators.
• Mortgagees should contact their Mortgagee Administrator if they forgot their password, did not receive an account set-up email, or their registration link has expired.

Resources

Mortgagee Administrators are encouraged to review the pre-recorded webinar and user guide on the FHA Catalyst User Access Management web page for more information.

For additional guidance on the FHA Catalyst: SFDMS Reporting Module, mortgagees should reference the user guide and four new pre-recorded webinars available on the FHA Catalyst: SFDMS Reporting Module web page.

FHA INFO 2022-16 - Update to the Mandatory Use Date for the Federal Housing Administration (FHA) Catalyst: Electronic Appraisal Delivery (EAD) Module (ML 2022-04)

February 15, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-04, Update to the Mandatory Use Date for the Federal Housing Administration (FHA) Catalyst: Electronic Appraisal Delivery (EAD) Module. The ML announces an extension of the mandatory use dates for mortgagees to submit appraisals for single family forward and reverse mortgage endorsements through the FHA Catalyst: EAD Module.

Mortgagees should note the revised transition dates below:

• Effective on and after March 14, 2023, appraisal delivery through the FHA Catalyst: EAD Module is mandatory for all cases unless a previous appraisal version has been submitted to the legacy EAD portal.
• For cases with a previous appraisal submission in the legacy EAD portal before March 14, 2023, appraisal resubmissions may continue to be delivered through the legacy EAD portal until April 17, 2023.
• After April 17, 2023, appraisal submissions for all cases, regardless of previous submission status, must be delivered through the FHA Catalyst: EAD Module.

These revised dates were implemented in response to industry feedback that FHA received regarding the transition timeline announced in Mortgagee Letter (ML) 2021-23 on September 15, 2021. Mortgagees and their technology service providers are encouraged to use the additional time to prepare for integration and should refer to the FHA Catalyst: EAD Module web page for more information. Further information related to onboarding and registration will be communicated at a later date.

The updates will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2022-13 - Technical Update to the Extension of the Deadlines for the First Legal Action and Reasonable Diligence Time Frame (ML 2022-02)

February 7, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-02, Technical Update to the Extension of the Deadlines for the First Legal Action and Reasonable Diligence Time Frame. The ML provides a technical update to clarify the extension of the deadlines for the first legal action and Reasonable Diligence Time Frame that was last announced in ML 2021-15.

FHA is clarifying the prior deadline extensions, which provide flexibility to mortgagees impacted by the COVID-19 pandemic. The ML clarifies that the first legal deadline and Reasonable Diligence Time Frame are extended by 180 days from the later of either:

• the expiration of the foreclosure moratorium for FHA-insured Single Family Mortgages; or
• the expiration of the borrower’s COVID-19 forbearance or the Home Equity Conversion Mortgage (HECM) COVID-19 extension period.

The ML updates the following policies:

• For forward mortgages: Section III.A.2.o.v, Extension of First Legal Deadline Date, of FHA Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1); and
• For HECMs: the Moratorium on Foreclosures and Evictions and Extension of Deadlines section of ML 2021-15, Extension of the Foreclosure and Eviction Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency, Further Expansion of the COVID-19 Forbearance and the COVID-19 Home Equity Conversion Mortgage (HECM) Extensions, and Establishment of the COVID-19 Advance Loan Modification (COVID-19 ALM).

The policies in the ML are effective immediately and will be incorporated in a future version of Handbook 4000.1.

FHA INFO 2022-07 - FHA Implements Mortgagee Administrator Role in FHA Catalyst

January 20, 2022 - The Federal Housing Administration (FHA) is announcing new functionality on its FHA Catalyst platform – the Mortgagee Administrator role. The role enables mortgagees to manage their organization’s user access on several Single Family modules within the FHA Catalyst platform. A Mortgagee Administrator must be established in FHA Catalyst. Only users who are active FHA Connection (FHAC) Application Coordinators will be granted Mortgagee Administrator access.

Mortgagee Administrators are able to perform the following actions on behalf of their organization:

• Set up new users.
• Manage existing user information, including name and contact details.
• Assign module access and permissions to users.
• Freeze or deactivate user access.
• View users in their organization, including other Mortgagee Administrators, and user reports.

The actions above can be performed by Mortgagee Administrators for the following modules only:

• FHA Catalyst: Case Binder Module
• FHA Catalyst: Electronic Appraisal Delivery (EAD) Module – Access Limited to Lender Users and Service Bureau Coordinators Only.
• FHA Catalyst: Claims Module – Access Limited to Claims Managers Only

Mortgagee Administrator Registration for Existing FHAC Application Coordinators

Existing FHAC Application Coordinators, with access to any FHA Catalyst module, were automatically registered as Mortgagee Administrators and the role was enabled in their FHA Catalyst profile. Additional details are outlined in the FHA Catalyst Mortgagee Administrator User Guide.

Current FHAC Application Coordinators without access to any of the FHA Catalyst modules were sent an email from FHACatalyst@hud.gov with a registration link and instructions on how to become a Mortgagee Administrator. If the email was not received, send the completed FHA Catalyst External User Access Request Form to answers@hud.gov with the subject line: FHA Catalyst Mortgagee Administrator.

Access for New Mortgagee Administrators

Users that were not automatically registered or did not receive the registration link for the Mortgagee Administrator role, should send the completed FHA Catalyst External User Access Request Form to answers@hud.gov with the subject line: FHA Catalyst Mortgagee Administrator.

Resources

Mortgagee Administrators are encouraged to refer to the FHA Catalyst: Mortgagee Administrator pre-recorded webinar and FHA Catalyst Mortgagee Administrator User Guide. These resources and further details are also available on the FHA Catalyst User Access Management web page.

FHA INFO 2022-03 - Expansion of the Exclusive Listing Period for HUD Real Estate Owned Properties (ML 2022-01)

January 13, 2022 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2022-01, Expansion of the Exclusive Listing Period for HUD Real Estate Owned Properties. This ML aligns with the Biden Administration’s efforts to increase the supply of affordable housing to first-time, low- and moderate-income homebuyers by extending the time that the Department of Housing and Urban Development (HUD) real estate owned properties are exclusively available to owner-occupant, HUD-approved nonprofit, and government buyers.

Through this ML, HUD is extending its current Exclusive Listing Period from 15 days to 30 days on single family properties that are eligible for financing under the 203(b) program on HUD’s real estate site – the HUD HomeStore. During this extended period, owner-occupants, governmental entities, and HUD-approved nonprofits may submit bids for HUD’s review. If a bid is not selected during the 30-day Exclusive Listing Period, HUD will make the property listing available to all other buyers, including investors.

The policies in this ML are effective beginning March 1, 2022, and will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.