FHA Revises Handbook 4000.1 | Weiner Brodsky Kider PC
In the latest Handbook 4000.1 Transmittal, FHA announced several updates that include the following highlights:
- Clarification of the approval guidelines for mortgage holders and alignment of the guideline language of the manual with the applicable regulations; and
- Update the requirements for case folder submission for the DE Authority test case phase of Title II.
- Update of required documentation and calculation of monthly student loan commitment requirements per ML 2021-13 and addition of an exception for student loans in COVID-19 related deferral;
- Inclusion of an exception granted by the Handbook Waiver that will allow individual homeowners and the homeowner community to obtain and maintain insurance coverage as required in the relevant documents for certain types of condominiums; and
- Update of the protocols regarding the transfer of control from the developer or builder to the owners of the units.
- Update of the effective date of Section III Annex 4.0 and 5.0 by extending the implementation date contained in ML 2021-14;
- Revision of guidelines for voluntary termination of mortgage insurance;
- Update of guidelines for COVID-19 related deferral and modification of loans in advance according to ML 2021-15;
- Requests to exceed the maximum property maintenance allowance must be made at least five days prior to the transfer.
- Clarification of alternative documents HUD accepts as proof of tax payment for the damage assessment.
- Updated guidance on the number of early payment defaults requiring a valuation review and clarification of the requirements for the quality control review of property valuation to include property acceptance criteria and expert and property requirements for Title II forward and reverse mortgages under ML 2021 -17 to reconcile;
- Adding a language to use mortgage loans that are not approved for eCaseBinder filing through FHA Connection to use the FHA Catalyst: Case Binder module to submit both Single Family Forward and Reverse (HECM) case files that are requested via the credit verification system for technical review after approval; and
- Clarification of existing guidelines for the verification of required documents are dated in order to demonstrate compliance with the retention and reporting periods.
Changes under Section II.A of Manual 4000.1 can be implemented immediately, but must be implemented for mortgages with case numbers assigned on or after September 20, 2021. Unless otherwise stated, all other changes can be implemented immediately, but do not have to be implemented later than 09/20/2021.