The U.S. Department of Housing and Urban Development (HUD) recently announced 14 policy changes to the Federal Housing Administration (FHA) Single Family mortgage insurance program that will reduce regulatory burdens and lower costs. The changes span FHA policies from mortgage origination through servicing and quality control.
“Every unnecessary regulation comes with a cost, and too often homebuyers pay the price,” HUD Secretary Scott Turner said. “If a policy does not protect taxpayers, improve affordability, or expand opportunity for Americans, we should rethink it. As we recognize National Homeownership Month, these FHA actions reflect that commitment by eliminating barriers to expand homeownership opportunities.”
Policy changes include:
Appraisal field review requirements have been streamlined. The average field review previously cost $425. The change is estimated to save industry partners approximately $3.3 million annually.
The number of contractor draw requests was increased under the Limited 203(k) Rehabilitation Mortgage Insurance Program.
Early payment defaults resulting from natural disasters were permanently exempted from the required quality control review sample for FHA Mortgagee Approval and Quality Control.
The Duplicative Requirement for Lenders to Use the Important Notice to Homebuyers Form 92900-B was eliminated.
Safeguards to prevent abuse and ensure that proactive borrowers are not penalized were added to protect the FHA Mutual Mortgage Insurance Fund.