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Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
Camp oamp webinar fha updates thru ml 10-29 sept (2)
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Camp oamp webinar fha updates thru ml 10-29 sept (2)

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  • 1. FHA Updates U.S. Department of Housing and Urban Development September 2010 Company LOGO
  • 2. Today’s Agenda  Changes in FHA programs that may affect your transactions  Prior to 2010  Under the Housing and Economic Recovery Act of 2008  2010
  • 3. Closing Costs Lenders are expected to charge fees that are fair, reasonable, customary, and documented  Any and all fees must be disclosed Good-Faith-Estimate Non-allowable closing cost fee schedule eliminated  A borrower may pay all fees associated with the completion of the transaction  Except “Tax Service”
  • 4. Housing and Economic Recovery Act of 2008 - HERA Key FHA Provisions  Permanently increases loan limits  Lowest county limit will be $271,050  Limits vary by county (MSA)  Home Equity Conversion Mortgage limit $417,000  Banned Seller-Assisted Downpayment Assistance Programs  Provided “Hope for Homeowners Program”  Expires September 2011
  • 5. Minimum Required Investment  Minimum cash investment – down payment  3.5% of appraised value or sales price  Whichever is less  Sales price greater than appraised value then also need to pay difference  No longer calculated on “acquisition cost”  Secretary of HUD has authority to amend minimum required investment  Can set higher, but not lower required borrower investment
  • 6. Minimum Required Investment – Cont.  May come from borrower’s own funds or  100% gift  Immediate family member/close familial tie  HUD approved non-profit organization  Acceptable secondary financing  Local city, county, and state programs  All seller-assisted down payment assistance eliminated
  • 7. Maximum Loan-To-Value Ratio Purchase Transaction  Maximum LTV for purchase simplified  96.5% of sales price or appraised value  Whichever is less  Distinctions between low and high closing cost states eliminated  Maximum FHA insured mortgage Loan-to- Value with Upfront Mortgage Insurance Premium financed  May not exceed 100 percent Example: 96.5% LTV + 1% UFMIP = 97.5% (ok)
  • 8. Mortgage Limits  FHA has no minimum mortgage loan amount  Only maximum mortgage amounts  Lenders may impose a minimum loan amounts  One national limit for Home Equity Conversion Mortgage  $417,000  Temporary limit to $625,500
  • 9. Mortgage Limits Under American Recovery and Reinvestment Act Mortgagee Letters 2009 – 07 and 2009 – 50  Temporary ceiling/limit extended for 2010  175% of GSE ($417,000 x 1.75%)  $729,750  County MSA’s determine maximums  Higher in Alaska, Hawaii, Guam, and U.S. Virgin Islands  Home Equity Conversion Mortgage nationwide limit  $625,500  Expires December 31, 2010 (reverts to HERA limits)  Loan must be fully approved
  • 10. FHA Condo Loan Insurance 203(b)  Now also under FHA program code 203(b) Previous program code 234 (c)  All condo projects must be in a HUD approved project Except site-condos  Approval processing requirement dates vary  “Spot” approvals no longer allowed Case numbers assigned on/after Feb. 1, 2010
  • 11. FHA Condo Loan Insurance 203(b) - Continued May be attached, detached, row, low or high rise, and condo conversions Manufactured homes in condo projects allowed Lender cannot approve project Only HUD can approve Not treated as a site-condos Not “stick” built
  • 12. FHA Condo Loan Insurance 203(b) - Continued A site-condominium is: Stick built home 1 – unit Nothing attached (walls, garages, etc.) Legal classification is condominium Site-condos do not need to be in a HUD approved project Effective June 12, 2009
  • 13. FHA Condo Loan Insurance 203(b) - Continued  Lenders will decide on approval process Lender to review and process (DELRAP) HUD to review and process (HRAP) Lender’s choice on any given project  Project approvals good for period of 2 years Lender is required to recertify occupancy requirements and no adverse conditions exist each and every time a loan is made even if project approved
  • 14. Condo Approval Process – Cont.  Allows for minimum of 2 units in a project  Previously 4 units in a project  Condo conversions waiting period eliminated  Any and all remodeling or rehab must be 100% complete
  • 15. Condo Approval Process – Cont.  50% Owner occupancy required  Previously 51%  REO’s owned by only a foreclosing lender and/or second homes are not counted in total number of units for owner occupancy calculation  No more than 15% total units in arrears on HOA Dues  No one entity can own more than 10% of all units
  • 16. Condo Approval Process – Cont.  30% maximum FHA concentration  Temporary increase to 50% penetration of FHA insured mortgages until 12/31/10  Possible further increase to 100% FHA penetration until 12/31/10  See Mortgagee Letter for this exception  Reserve and environmental reviews/studies may be needed
  • 17. Condo Approval Process – Cont.  New construction pre-approval and inspections  Based on types of jurisdictional inspections  May or may not need Early Start Letter and ten- year HUD approved warranty plan  Project approval not required for:  HUD REO to buyer using FHA financing  FHA to FHA refinance
  • 18. Final Notes for Condo Insurance  Project approvals expire  Two years from when placed on list  If approved before 10/1/08 have until 12/7/10 Complete guidelines, requirements, and instructions contained in: Mortgagee Letters 2009 – 46A and 2009 – 46B HUD’s list of approved projects is located at: https://entp.hud.gov/idapp/html/condlook.cfm
  • 19. Mortgagee Letter 2009 – 28 September 2008 Appraiser independence  Effective for case numbers assigned January 1, 2010  Prohibits lenders from accepting appraisals selected, retained, or compensated by lender’s staff compensated on commission basis  FHA does not require use of Appraisal Management Companies (AMC’s)
  • 20. Mortgagee Letter 2009 – 29 September 2009 Appraisal Portability  FHA prohibits “Appraiser shopping”  Effective case numbers January 10, 2010  Second appraisal acceptable under limited circumstances  First appraisal contained material deficiencies (DE)  Appraiser in first appraisal excluded from lender list  Failure of first lender to provide copy of appraisal to second lender in timely fashion
  • 21. Mortgagee Letter 2009 – 30 September 2009 Appraisal Validity Periods  Effective for case numbers assigned 1/1/2010  Appraisals valid on all appraisals for 120 days  Existing, proposed, and under construction  Previously 6 months on existing property  Previously 12 months on proposed and under construction NOTE: 120 Days is NOT 4 months
  • 22. Mortgagee Letter 2009 – 52 December 2009 Short Sales and Short Pay offs  Borrowers not eligible for FHA insured financing if pursued a short sale  3 years – treated like a foreclosure  May be eligible  Did not take advantage of declining market  New purchase is at reduced price for similar or superior property within a reasonable commuting distance  Were current on mortgage and all other installment debt for immediate preceding 12 months from sale
  • 23. Mortgagee Letter 2009 – 53 December 2009 Real Estate Settlement Procedures Act  FHA no longer limits origination fees except  Rehabilitation loan programs @ 1.5%  Home Equity Conversion Mortgage @ 2%  Lenders are expected to charge fair and reasonable fees  Any and all fees must be disclosed  Good-Faith-Estimate  Regulations relating to fees handled by R.E.S.P.A.  202 – 708 – 0502
  • 24. Waiver of Requirements of 24 CFR 203.37a(b)(2) – January 2010 Property Flipping – Resale Within 90 days  Temporarily allows FHA insured financing if property resold within 90 – days  Expires 1/31/2011  Forward mortgages only (not HECM)  Must be arms length, no identity of interest, seller actually holds title, no pattern of previous flipping, marketed openly and fairly  When sales price exceeds 20% or more over and above seller’s acquisition cost  Additional conditions apply - Discuss with lender
  • 25. Mortgagee Letter 2010 – 02 January 2010 Increase Of Upfront Premiums for FHA Mortgage  Effective for case numbers issued on or after April 5, 2010  Purchase money and full credit qualifying refinance  Increased to 2.25%  Streamline refinances – all types  Increased to 2.25%  No change to annual/monthly premiums Changes again in October 2010
  • 26. Mortgagee Letter 2010 – 28 September 2010 Changes to FHA Mortgage Insurance Preimiums  Effective for case numbers issued on or after October 4, 2010  Purchase money and all refinance transactions  Upfront - decreased  Annual/monthly - increased  Home Equity Conversion Mortgage  2% Upfront and 1.25% Annual/Monthly
  • 27. Effective October 4, 2010 Mortgage Insurance Premiums (Cont.) Decrease UFMIP/Increase Monthly for case numbers assigned on or after October 4, 2010
  • 28. Mortgage Insurance Premiums (Cont.) Decrease UFMIP/Increase Monthly for case numbers assigned on or after October 4, 2010
  • 29. Mortgagee Letter 2010 – 04 January 2010 Loss Mitigations For Imminent Default  Helps current FHA borrowers avoid foreclosure  Mortgage current or less than 30 days past due  Borrower experiencing significant reduction in income or other hardship  Loss mitigation options  Forebearance  FHA Home Affordable Modification Program  FHA HAMP
  • 30. Mortgagee Letter 2010 – 13 March 2010 Appraisal Update and/or Completion Report  One time use only  Eligible intended user must be original user  Provides 30 day extension to original report  May provide up to 240 days for insuring
  • 31. Mortgagee Letter 2010 – 13 April 2010 Electronic Signatures on Third Party Documents  Electronic Signatures now acceptable  Except HUD REO contracts  Wet signatures required  Lenders reminded to employ same levels of care and due diligence
  • 32. Mortgagee Letter 2010 – 20 June 2010 Strengthening Risk Management  Eliminated approval of FHA loan correspondents  Effective May 20, 2010  Those already approved still approved until 12/31/10  Non-FHA approved originators now permitted to originate FHA insured mortgages  Third party originators  Sponsored relationship with FHA approved direct lender Additional guidance to be provided in future Mortgagee Letters
  • 33. Mortgagee Letter 2010 – 23 August 2010  FHA Refinance of Borrowers in Negative Equity Position  Enhancement to existing Making Home Affordable Program  Allows borrowers current on their mortgage to qualify for an FHA insured mortgage  Participation by existing lien holders is voluntary  Requires consent of existing lien holder  Similar to a short sale transaction See Mortgagee Letter for specific guidelines
  • 34. Mortgagee Letter 2010 – 24 August 2010 Combined Loan-to-Value Requirements For Refinance Transactions  The combined FHA insured mortgage and any subordinate lien may not exceed:  Applicable FHA loan-to-value ratios AND  Geographical maximum mortgage amount limits  Maximum combined loan-to-value limits are  97.75% rate and term refinance (no cash out)  115% refinance of borrowers in negative equity  125% FHA to FHA streamline refinance  85% Cash out refinance Effective with Case Numbers Assigned on/after September 7, 2010
  • 35. Mortgagee Letter 2010 – 29 September 2010 Minimum Credit Scores & Loan-to-Value Ratios  Effective Case Numbers assigned  On or after October 4, 2010  Does not affect Title I, Hope for Homeowners, Hawaiian Homelands, Indian Reservations, Declining Neighborhoods – Section 223(e), and Military Impact Areas of Georgia and New York
  • 36. Minimum Credit Scores and Loan-to-Value Ratios – Continued Maximum loan-to-value limits based on credit scores  Score of 580 or greater 97.75%  Scores between 500 to 579 90%  Scores less than 500 Not eligible  Disaster Relief Program  Score of 500 or greater 100%  Below 500 Not eligible  Borrowers in negative equity position  Refer to Mortgagee Letter 2010 – 23
  • 37. Where to Get More Information  1-800-CALL - FHA (1 – 800 – 225 - 5342)  A source for all FHA questions  Lenders and Consumers  www.hud.gov  On-line resource for info about FHA and FHA programs  On-line resource for other types of programs, forms, press releases, etc.  User friendly  www.fhaoutreach.gov/FHAFAQ  On-line resource to frequently asked questions
  • 38. www.hud.gov
  • 39. www.fhaoutreach.gov/FHAFAQ
  • 40. The U.S. Department of Housing and Urban Development would like to thank the California Association of Mortgage Professionals and Oregon Association of Mortgage Professionals and its’ members for your interest in FHA and FHA programs

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