U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ...

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

ASSISTANT SECRETARY FOR HOUSINGFEDERAL HOUSING COMMISSIONER

Special Attention of: All FHA-Approved Mortgagees All Direct Endorsement Underwriters All Eligible Submission Sources for Condominium

Project Approvals All FHA Roster Appraisers All FHA-Approved 203(k) Consultants All HUD-Approved Housing Counselors All HUD-Approved Nonprofit Organizations All Governmental Entity Participants All Real Estate Brokers All Closing Agents

Transmittal: Handbook 4000.1 Issued: October 24, 2019 Effective Date: Multiple; See Below

1. This Transmits:

1. Handbook 4000.1, FHA Single Family Housing Policy Handbook.

2. Previously published updates to Handbook 4000.1, FHA Single Family Housing Policy Handbook.

____________________________ Brian D. Montgomery Assistant Secretary for Housing ? Federal Housing Commissioner

2. Explanation of Materials Transmitted:

This revision to the FHA Single Family Housing Policy Handbook, or Handbook 4000.1 (Handbook), is being published to update existing sections.

Below is a list of content updates being made to the Handbook:

Handbook Section

Handbook Changes

Page Number(s)

Section I ? Doing Business With FHA

I.A.5.e Title II Direct Endorsement Updated to note effective date

37

Lender Condominium Project

of 10/15/2019.

Review and Approval Process

Authority

Section II ? Origination Through Post-Closing /Endorsement

II.A.8.d.v(B)(1) Cash-Out Refinances ? Maximum Mortgage Amounts ? Standard

II.A.8.p Condominiums

II.A.8.p.ii(C) Condominiums ? Form HUD-9991, FHA Condominium Loan Level/SingleUnit Approval Questionnaire

Updated the Maximum LoanTo-Value (LTV) and Combined Loan-To-Value (CLTV) percentages to 80 percent on Cash-out Refinance Mortgages, consistent with ML 2019-11. Updated to note effective date of 10/15/2019. Updated requirements for units in Approved Condominium Projects to include form HUD9991. Updated numbering of subsequent sections.

417

477 478-484

II.A.8.p Condominiums

Updated required documentation to reference form HUD-9991.

II.A.8.p.iii(D)(2) Condominiums ? Requirements for Eligible Properties ? Form HUD-9991, Condominium Loan Level/SingleUnit Approval Questionnaire II.C Condominium Project Approval

Updated requirements for eligible properties to include form HUD-9991. Updated numbering of subsequent sections. Updated to note effective date of 10/15/2019.

478, 479, 480, 481-482, 484, 486, 487, 488, 489, 490, 491, 492, 493, 494,

495, 496 485-495

510

2

Handbook Section

II.C.2 Condominium Project Approval ? Project Eligibility

II.C.2.c.i Condominium Project Approval ? Project Eligibility ? Form HUD-9992, FHA Condominium Project Approval Questionnaire II.C.3.b.iv Condominium Project Approval ? Project Approval Submission ? HUD Review and Approval Process ? Submission Process

Handbook Changes

Updated required documentation to reference HUD-9992.

Updated requirements for the Condominium Project to include form HUD-9992. Updated numbering of subsequent sections. Updated Condominium Project Approval Stacking Order Documentation to include form HUD-9992.

Page Number(s) 512, 514, 518, 519, 520, 520, 521, 522, 524, 525, 526, 527, 529, 531, 532,

533 512-513

535

Section III ? Servicing and Loss Mitigation

III.A.1.h.i Insurance Coverage

Updated Hazard Insurance

Administration ? Hazard Insurance guidelines for Mortgagees and

the Payment of Renewal

Premium requirements.

III.A.1.k.ii(E) Mortgage Insurance Updated the Borrower-Initiated

Premium Cancellation and

Cancellation of MIP

Termination ? Standard ?

requirements for Mortgages

Borrower-Initiated Cancellation of with case number assignments

MIP

before June 3, 2013.

III.A.1.k.ii(F) Mortgage Insurance Updated language regarding

Premium Cancellation and

Borrowers with an outstanding

Termination ? Standard ? Artificial Partial Claim/second mortgage.

Principal Payment Reduction

Updated subsequent numbering.

III.A.2.h.ii(B)(2) Early Default

Added language regarding

Intervention ? SFDMS Default

reporting accuracy and quality

Reporting ? Standard ? Time

control.

Frame for Reporting

III.A.2.h.vi(A)(2) Collection

Clarified which electronic

Letters and Electronic

methods of communication are

Communications ? Standard ?

acceptable.

Electronic Methods of

Communication

III.A.2.j.ii(B)(2) HUD's Loss

Updated the standard

Mitigation Program ? Owner

requirement guidance for Non-

Occupancy ? Standard for Non- Occupant Borrowers.

Occupant Borrowers

623 633 633-634 644 648 666

3

Handbook Section

Handbook Changes

III.A.2.j.iii HUD's Loss Mitigation Option Priority Waterfall III.A.2.k.v(B)(2) FHA-HAMP ? Eligibility ? Borrower Qualifications

III.A.2.k.v(H)(3)(b)(ii) Entering into the Trial Payment Plan Agreement ? Standard ? Trial Payment Plan Terms III.A.2.k.v(H)(4) FHA-HAMP Trial Payment Plans ? Waiver of Late Charges III.A.2.k.v(P) FHA-HAMP ? Loss Mitigation Assumption

III.A.2.l.ii(B)(2) Home Disposition Options ? PreForeclosure Sales ? Eligibility ? Property Maintenance III.A.2.p.ii(B) Qualification Criteria for Use of Commissioner's Adjusted Fair Market Value ? Standard III.A.2.p.iii(A)(2) Property Valuation and CAFMV ? Required Appraisal ? Extension to Appraisal Validity Period

Added clarifying guidance in Step 5.

Updated qualification language and extended qualification criteria to Mortgagees in PDMDAs. Added clarifying language regarding Trial Payment Plan Terms.

Added section regarding waiver of late charges and renumbered all sections that follow. Added Loss Mitigation Assumption guidance and renumbered all sections that follow. Added Property Maintenance language. Updated subsequent numbering.

Removed language from standard to align with current policy.

Clarified requirements to Extension to Appraisal Validity Period.

III.A.2.p.iii(C) Property Valuation and CAFMV ? Damage to the Property after Appraisal III.A.2.r.ii(A)(3) Initiating Foreclosure ? Notice to HOA or Condominium Associations III.A.2.r.ii(A)(4) Initiating Foreclosure ? Outstanding HOA or Condominium Association Fees III.A.2.r.ii(H) Conduct of Foreclosure Proceedings ? CWCOT Post-Foreclosure Sales Efforts

Clarified guidance for submitting a variance.

Clarified language regarding who is notified during the foreclosure proceedings. Updated guidance to be consistent with ML 2013-18.

Updated guidance to clarify timing of sales efforts.

4

Page Number(s) 670 680

684-685 686-688

694 695-701 725-726

726

727 736 736 742

Handbook Section

III.A.2.s.iii(B) Notice to Occupant of Pending Acquisition ? Standard

III.A.2.t.ii(C)(7)(a) Mortgagee Property Preservation and Protection Action ? Securing and Maintaining the Property ? Standard III.A.2.t.iv Conveyance of Acquired Properties ? Notice of Property Transfer III.A.2.t.v(B)(1) Title Evidence ? Fee or Owner's Title Policy III.A.2.t.v(D) Submission of Title Evidence for Conveyance to HUD ? HUD Review of Title Evidence III.A.2.t.v(F) Submission of Title Evidence for Conveyance to HUD ? Return of the Original Title Evidence to the Mortgagee III.A.3.b.vii(B) Assumptions ? Acceleration of the Mortgage ? Acceleration not Permitted III.A.3.c.iv(B) Loss Mitigation for Borrowers in PDMDAs ? Forbearance Options for Borrowers in PDMDAs III.A.3.c.iv(C) Loss Mitigation for Borrowers in PDMDAs ? Disaster Loan Modification; III.A.3.c.iv(D) Disaster Standalone Partial Claim; III.A.3.c.iv(E) Required Financial Evaluation for other Loss Mitigation Home Retention Options; III.A.3.c.iv(F) Home Disposition Options

Handbook Changes Updated guidance to include instructions in the event of postponement of a foreclosure sale. Updated guidance for securing a vacant property.

Updated guidance on notice of property transfer.

Updated guidance on titles for consistency. Removed guidance to align with ML 2010-16.

Removed guidance to align with ML 2010-16.

Updated guidance for transfers by devise or descent.

Updated section title to specify Borrowers in PDMDAs, to align with ML 2019-14.

Updated guidance for Borrowers in PDMDAs, to align with ML 2019-14. Updated numbering of subsequent sections.

Page Number(s) 744

752

771 772 773 773-774

783 786

787-790

5

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