www.hudclips.org 


U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410-8000

March 11, 1991
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 91-15
   TO:  ALL APPROVED MORTGAGEES
   SUBJECT:  Single Family Loan Production - Clarification to
               Mortgagee Letter 89-31 (Elimination of Private Investors)
 
        The purpose of this letter is to clarify HUD policy concerning
   cases involving private investors.  The HUD Reform Act of 1989 (1989
   Act) eliminated the eligibility of private investors for mortgages
   insured under most of HUD's Single Family Mortgage Insurance programs
   (refer to Mortgagee Letter 89-31 for exceptions).  The ban on investors
   was effective for mortgages insured pursuant to conditional commitments,
   master conditional commitments (MCC), master appraisal reports
   (MAR) or master certificates of reasonable value (MCRV) issued on or
   after December 15, 1989.
 
        This is to advise lenders that a proposed construction case
   involving an investor cannot be insured using an extension to an
   appraisal, MCC, MAR or MCRV, unless a sales contract was signed by the
   investor and construction of the property was started prior to the date
   of extension of the appraisal.
 
        If you have any questions concerning this letter, please contact
   your local HUD Field Office.
 
                                 Very sincerely yours,
 
                                 Arthur J. Hill
                                 Acting Assistant Secretary for
                                   Housing-Federal Housing Commission