The Federal Housing Administration (FHA) published the latest update to its Single Family Housing Policy Handbook 4000.1 (SF Handbook). The update contains enhancements that continue to make the SF Handbook a comprehensive and consistent source for FHA Single Family Housing policy.
Also concurrent with this update, the previously published sections covering Claims and Disposition for Title II forward mortgages became effective today. These were the last major sections needed for mortgagees and other stakeholders in FHA transactions to use the SF Handbook as a full, end-to-end resource for Title II forward mortgages. Condominium Project Approval policies, to be a subsection of the SF Handbook’s Origination through Post-Closing/Endorsement section for Title II forward mortgages, is still in progress.
The September 30th SF Handbook update contains technical changes for consistency and clarity, and several policy updates. The SF
Handbook September 30th Transmittal, available in FHA’s Online Housing Policy Library, includes the following key updates:
Origination and Underwriting: an increase from $5,000 to $10,000 for the maximum amount that buyers of HUD realestate
owned (REO) homes are required to place into escrow for repairs on HUD REO properties that do not meet FHA’s minimum property standards. This change may increase the number of borrowers willing and able to qualify for FHA financing when purchasing a HUD REO property needing repairs.
Appraisal and Property Requirements:
— Additions related to residential Water Purification Systems, and the addition of a Notice of Water Purification System sample document, are not policy changes, as they are contained in FHA regulations. These additions do, however, enhance the
comprehensive nature of the SF Handbook and its consistency with regulations.
— The addition of language regarding the Appraisal Effective Date, which cannot be a date before the FHA Case Number assignment, adds specificity to the SF Handbook on this operational practice.
Servicing: Changes throughout the Servicing and Loss Mitigation section revise policy to integrate into the SF Handbook policy changes announced in Mortgagee Letter 2016-14. These changes must be implemented, as announced in Mortgagee Letter 2016-14, by December 1st, 2016.
Quality Control, Oversight, and Compliance for Mortgagees with Multifamily Authority: exceptions to the Quality Control, Oversight, and Compliance section clarify that certain sections do not apply to mortgagees with: Originate Multifamily authority; Service Multifamily authority; or Service/Originate Multifamily authority; nor to Multifamily operations when a mortgagee has both Single Family and Multifamily authority. This change addresses Multifamily mortgagee requests for clarity on this issue.
New and Updated Supplemental and Model Documents
Concurrent with the September 30th SF Handbook update, FHA made the following supplemental and model documents available on its Supplemental Documents and Model Documents web pages, respectively:
Added Borrower Notice of Water Purification System supplemental document, which contains sample language that mortgagees may choose to use to comply with FHA’s individual residential water purification systems policies;
Updated Single Family Default Monitoring System Reporting Codes and Termite Treatment Exception Areas supplemental documents; and
Updated HUD Earnest Money Forfeiture and Return Policy model document.
In addition, the three SF Handbook waivers noted below expire as of September 30th, 2016. FHA has not extended these waivers, as the provisions they contain have been incorporated into the SF Handbook:
Single Use of Signatures;
MIP Factor for 203(k) Loans and Simple Refinance Transactions; and
FHA Model Mortgage.
Previous versions of the updated supplemental and model documents, and the expired waivers referenced above, can be accessed for research purposes on FHA’s Single Family Housing Supplemental Documents Archive web page.
To see this notice online or find more information, visit http://portal.hud.gov/hudportal/documents/huddoc?id=SFHB_Online_9_30_16Update.pdf