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 FHA Roster Appraisers All FHA Roster Inspectors 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: September 30, 2016 Effective Date: Multiple; See Below
1. This Transmits: Handbook 4000.1, FHA Single Family Housing Policy Handbook. 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)
Asterisks (*) in document identify items with effective dates that differ from the September 30,
2016 effective date. Refer to Section 3 below for more information.
Section I ? Doing Business with FHA
I.B.2.b.iii 203(k) Consultants ? Provided additional guidance for
67, 92, 94
Application and Approval
prospective 203(k) Consultants and
Process ? Incomplete
nonprofit and Governmental Entities
Application;
who submit incomplete applications.
I.B.4.b.vi Nonprofits and
Governmental Entities ?
Application and Approval
Process ? Incomplete
Application;
I.B.4.b.ix(C) Nonprofits and
Governmental Entities ?
Recertification ? Incomplete
Recertification Application
Handbook Section I.B.4.a.i(A) HUD Homes
Handbook Changes
Updated guidance for nonprofit programs purchasing HUD Homes.
Page Number(s) 70
Section II ? Origination through Post-Closing/Endorsement
II.A.1.a.i(A)(4)(c)(vi) Single Use Incorporated change as announced in
111
of Signature
E-SIGN waiver, dated May 19, 2016.
II.A.1.a.i(E)(1)(a)(iii) Property Incorporated PACE guidance to
117, 125-126, 146-
Assessed Clean Energy;
reflect ML 2016-11.
147, 177, 231, 306,
II.A.1.a.iii(B)(6)(e) Additional
323, 341, 542-543
Requirements When Ordering an
Appraisal;
II.A.1.b.iv(A)(6) Property
Assessed Clean Energy
II.A.4.a.iii(A)(1) Automated
Underwriting System Data Entry
Requirements ? Mortgagees;
II.A.4.d.iii(G)(2) Interested Party
Contributions (TOTAL) ?
Standard;
II.A.5.c.iii(G)(2) Interested Party
Contributions (Manual) -
Standard;
II.A.5.d.vii(B) Calculating Total
Mortgage Payment;
II.A.6.a.viii(A) Monthly Escrow
Obligations;
II.D.12.d.iv Property Assessed
Clean Energy
II.A.1.a.iii(B)(6) Ordering
Removed redundant language in
123
Appraisals
Ordering Appraisals section.
II.A.1.a.iii(B)(7) Appraisal
Clarified that the effective date of the
126, 480
Effective Date;
appraisal cannot be a date before
II.D.1.a Information Required FHA case number assignment and
before Commencement of the provided additional guidance on the
Appraisal
use of conventional or other
government-guaranteed appraisals.
II.A.1.b.ii(B)(2)(a) Other Parties Added Closing Agent and title
138
to the Transaction - Standard
company to list to make consistent
with Section V.A.3.f.i(A) Ineligible
Participants ? Origination and
Underwriting Reviews ? Standard.
II.A.1.b.iv(A)(1)(e) Required
Removed and revised language to
143
Flood Insurance Amount
make consistent with 24 CFR
203.16a.
2
Handbook Section
II.A.1.b.iv(A)(7) Dwelling Unit Limitation; II.A.5.d.xii(C) Dwelling Unit Limitations; II.A.8.a.iii(A) Dwelling Unit Limitation
II.A.3.a.ii(F) Requirements for Living Unit; II.D.3.e Appliances II.A.3.a.ii(P) Individual Residential Water Purification Systems; II.A.6.a.viii(A) Monthly Escrow Obligations; II.D.3.p.vi Individual Residential Water Purification Systems II.A.4.a.v Accept Risk Classifications Requiring a Downgrade to Manual Underwriting (TOTAL); II.A.4.b.iv(C) Undisclosed Mortgage Debt (TOTAL) II.A.5.d.ix(F)(1) Calculating Residual Income
II.A.6.b.i Mortgage and Note Definitions II.A.7.d.ii(C) Uniform Case Binder Stacking Order
II.A.8.a.x(B) Maximum Mortgage Amount for Refinance ? Required Documentation
Handbook Changes
Moved section from II.A.5.d.xii(C) to II.A.1.b.iv(A)(7), and revised to clarify that guidance applies to Governmental Entities or nonprofit Borrowers. Subsequent heading numbers were renumbered. Updated heading in II.A.8.a.iii(A) for consistency. Clarified definition, standard, and reporting requirements for appliances. Added guidance for individual residential water purification systems.
Clarified guidance for when mortgage debt requires a downgrade to manual underwriting.
Clarified that total fixed payment should be part of residual income calculations. Updated definition of Mortgage.
Clarified requirement that, when applicable, Mortgagees must include Affiliated Business Arrangement disclosures in case binders. Removed unnecessary language in 203(k) Maximum Mortgage Amount for Refinance section.
Page Number(s) 147-148, 335, 364
164, 500-501 170-173, 341, 511
179, 188
327 345 355 379
II.A.8.a.xv(A)(2)(a) Initial Draw Amended origination fees and
384
at Closing ? Standard 203(k);
discount points as allowable
II.A.8.a.xv(A)(2)(b) Initial Draw disbursements at closing.
at Closing ? Limited 203(k)
3
Handbook Section
Handbook Changes
II.A.8.a.xvi Data Delivery/203(k) Calculator
Removed unnecessary lowest acquisition cost information and added credit for lead-based paint stabilization.
Page Number(s) 386
II.A.8.d.vi(A)(2)(b)(i) Calculating Maximum Mortgage Amount ? Standard; II.A.8.d.vi(B)(3)(a) Calculating Maximum Mortgage Amount for Simple Refinance Transactions Standard II.A.8.d.vi(A)(1)(b)(i) Rate and Term ? Payment History Requirements (Manually Underwritten) - Standard II.A.8.d.vi(B)(1)(b)(i) Simple Refinance ? Payment History Requirements (Manually Underwritten) ? Standard; II.A.8.d.vi(C)(2)(b)(i) Streamline Refinances ? Payment History Requirements - Standard II.A.8.i.i New Construction Definitions
Removed language regarding UFMIP refund applying only when the Mortgage included financed UFMIP.
Updated payment history requirements for No Cash-Out Refinances.
Clarified that Properties less than one-year old subject to a second sale are treated like existing properties.
411, 414 410, 413, 417-418
437
II.A.8.n.iv(A) Processing of an Assumption ? Initiating Processing
II.A.8.o.i(C)(2) Section 203(b) With Repair Escrow; II.A.8.o.vi(B) Section 203(b) With Repair Escrow; II.A.8.o.vi(C)(3) Section 203(b) With Repair Escrow; II.A.8.o.vi(D)(2) Section 203(b) With Repair Escrow
Replaced reference to outdated HUD-92210, and updated with instructions to notify HUD of assumptions via FHA Connection. Revised repair escrow amount to $10,000, in response to Final Rule "Disposition of HUD-Acquired Single Family Properties; Updating HUD's Single Family Property Disposition Regulations," published August 11, 2016.
456 459, 463, 464
4
Handbook Section
Handbook Changes
II.A.8.o.v(B)(2) Investment Property ? Investor Buyer; II.A.8.o.vi(A)(3) Section 203(b) ? Investor Buyer II.A.9.c.iii Draw Inspection Fee
II.D.3.c.iii(C)(7) Stationary Storage Tanks II.D.3.g Mechanical Components and Utilities II.D.3.g.iii Plumbing System
Updated headings to clarify that the section is relevant for an "Investor Buyer" rather than general investors.
Updated draw inspection fee guidance to reflect ML 2016-12. Revised language about stationary storage tanks and MPR/MPS. Updated language for appraisal of mechanical components and utilities. Clarified language for appraisal of plumbing systems.
Section III ? Servicing and Loss Mitigation
III.A.1.l.ii(A) Termination of
Clarified language on termination of
Mortgage Insurance
mortgage insurance.
III.A.2.a.i Mortgages in
Updated definition for consistency
Delinquency or Default ?
with the regulation.
Definitions
III.A.2.h.xii(A)(2) Reasonable Clarified that the Mortgagee must
Effort in Arranging a Face-to- send the request for an interview by
Face Interview
certificate of mailing or certified
mail.
III.A.2.i.iii(A) Borrower's
Added language regarding
Financial Information
Borrower's financial information,
including new sub-sections on
Living Expenses, Borrower Income,
and Hardship.
III.A.2.i.viii Notice to Borrower Added language regarding
after Loss Mitigation Review
Mortgagee's Notice to the Borrower.
III.A.2.j.i HUD's Loss Mitigation Removed Informal and Formal
Program ? Definitions
Forbearances from definition of Loss
Mitigation Options, since they are
workout tools.
III.A.2.j.iii HUD's Loss
Updated the Loss Mitigation Option
Mitigation Option Priority
Priority Waterfall table.
Waterfall
III.A.2.k.iv(D)(2) Special
Updated language on the date the
Forbearance ? Unemployment SFB ? Unemployment Agreement
Agreement ? Standard
expires.
III.A.2.k.v Loan Modification Added effective date language.
Page Number(s) 462, 463
469 490 501 503
575 579 594
598-598
601-602 604
608-610 614 617
5
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