FHA INFO Messages 2022-2023
Single Family Housing Industry News

For lenders, servicers, appraisers, and others working with FHA Single Family insurance. FHA INFO messages contain FHA Single Family Housing news including policy announcements, Mortgagee Letters, Federal Register notices, Single Family Housing Handbook updates, training and educational offerings, and more.

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December 2023

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.

November 2023

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:

Property Size	Low-Cost Area “Floor”	High-Cost Area “Ceiling”
One-Unit	$498,257	$1,149,825
Two-Units	$637,950	$1,472,250
Three-Units	$771,125	$1,779,525
Four-Units	$958,350	$2,211,600

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.

October 2023

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.

September 2023

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.

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.

August 2023

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:

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.
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.
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.

July 2023

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.

June 2023

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.

May 2023

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.

April 2023

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.

March 2023

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.

February 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.

January 2023

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.

December 2022

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:

Property Size	Low-Cost Area “Floor”	High-Cost Area “Ceiling”
One-Unit	$472,030	$1,089,300
Two-Units	$604,400	$1,394,775
Three-Units	$730,525	$1,685,850
Four-Units	$907,900	$2,095,200

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.

November 2022

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.

October 2022

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.

September 2022

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.

August 2022

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.

July 2022

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.

June 2022

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.

May 2022

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.

April 2022

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.

March 2022

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.

February 2022

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.

January 2022

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.

Need Support? Contact the FHA Resource Center.

Visit our knowledge base to obtain answers to frequently asked questions 24/7 at www.hud.gov/answers.
E-mail answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

About FHA INFO

FHA INFO is a publication of the Federal Housing Administration's (FHA), Office of Single Family Housing, U.S. Department of Housing and Urban Development, 451 7th Street, SW, Washington, DC 20410. We safeguard our lists and do not rent, sell, or permit the use of our lists by others, at any time, for any reason.

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