On May 9, HUD announced several proposed revisions to the Federal Housing Administration’s (FHA) lender certification requirements in an effort to provide lenders and servicers “greater certainty in how to satisfy the agency’s compliance requirements.” HUD stated that the revisions are in response to the White House’s March Memorandum on Federal Housing Finance Reform, which included a directive that FHA work to diversify the network of FHA-approved lenders. (Covered by InfoBytes here.) The proposed changes include:

  • Loan-Level Certifications. FHA released proposed changes to the Addendum to the Uniform Residential Loan Application (Form 92900-A), reorganizing the Form in a “logical, easy to read, and understandable format” and eliminating “duplicative information collected elsewhere.”
  • Annual Lender Certification Statements. FHA released proposed changes to the Annual Lender Certification Statements, including a side-by-side comparison of the current and proposed changes. The changes are intended to “better align [the certifications] with National Housing Act standards while continuing to hold lenders accountable for compliance with HUD eligibility requirements.” The proposed changes include deleting redundancies and replacing handbook references with a general certification to compliance with the requirements of 24 CFR § 202.5.
  • Defect Taxonomy. FHA released proposed changes to the Defect Taxonomy. The draft of the Defect Taxonomy Version 2 includes (i) changes to the Severity Tier definitions; (ii) potential remedies that align with each Severity Tier; (iii) revised sources and causes in certain defect areas; (iv) new defect areas for servicing loan reviews; and (v) HUD policy references.

All proposals are posted on the FHA’s Drafting Table for 30-day feedback through June 8.