FHA Mortgages

FHA/HUD Close to Present Deadlines For Ending COVID “Flexibilities”


March 2020, the President of the United States declared a national emergency in connection with the COVID-19 pandemic.

Not long after that, the FHA and the HUD released details of revised FHA loan procedures designed to reduce the risk of COVID-19 spreading.

These changed procedures included modified employment reviews, appraisal processes and appraisal protocols such as: B. only external options. The HUD guidelines for these amended guidelines should address the specific needs and risks associated with personal requirements during COVID.

Some of the temporary guidelines were allowed to expire, but were then reinstated. Others simply extended their deadlines.

In January 2021, President Joseph R. Biden announced a plan called the National Strategy for Responding to COVID-19 and Preparing for a Pandemic, and in response, temporary FHA and HUD guidelines were extended.

This extension included new deadlines for the end of assessments, which are intended for outdoor use only, for revised employment screening guidelines, and others created to reduce the need for face-to-face contact where possible.

At the time of this writing, the deadlines in the HUD extensions have not yet been changed, meaning that some of these actions will soon revert to their original guidelines.

How soon?

FHA Mortgagee Letter 2021-06 contained the following information; the “Continuation of the Employment Guidelines Re-Examination” published in FHA Mortgagee Letter 2020-05 is “effective for cases closed on or before June 30, 2021.

The pandemic extension of the External Rating Only option in FHA Mortgagee Letter 2020-37 is for ratings “with an expiration date on or before June 30, 2021”.

These policy changes have always been considered temporary and “will not be included in the Department of Housing and Urban Development (HUD) manual 4000.1” according to the latest guidance available at the time of going to press.

The government has issued many extensions to these guidelines over time; At the time of going to press it remains unclear whether an additional or final extension beyond June 20, 2021 is planned. If you are unsure how these guidelines can affect your home loan transaction, it is best to discuss your concerns with the participating FHA lender.

It is important to note that the guidelines mentioned here generally do not address post-closing mortgage loan issues related to credit defaults, mortgage relief or other post-close issues, missed payments, need for FHA loan forbearance, etc.

Borrowers who need such assistance to catch up on their mortgages, avoid foreclosures, and get their payments back on track should contact the FHA lender as soon as it becomes known that financial difficulties could affect the on-time payment of your mortgage.

Mortgage relief is not automatic – it must be applied for and requires the involvement of your loan officer. Don’t hesitate to seek help with your mortgage. You have more options if you act as early as possible.