MORTGAGE COMPLIANCE: FHA - New Oversight of Multifamily Risk

July 7th, 2010 · No Comments

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On July 6, 2010, HUD-FHA issued new guidelines to implement a series of changes to its multifamily insurance programs. The guidelines, provided in Mortgagee Letter 2010-21, update underwriting policies, increase lender and underwriter quality review requirements, and align loan application, submission and approval standards.

Some of the underwriting standards have not been updated since the inception of FHA’s multifamily programs over 40 years ago. On July 7, 2010, Commissioner David H. Stevens stated that "these program updates will help us to continue serving our mission of providing liquidity to the multifamily market and decent, affordable rental housing to our nation’s communities."

Program changes will be implemented as follows:

> i) 60 days after the effective date of the ML for any new pre-applications, (existing or previously submitted pre-application submissions are covered under iii. below),

> ii) up to 120 days for projects with outstanding invitation letters, or such shorter time as the invitation letter provides, so long as a complete application for Firm Commitment can be submitted within the time allowed by the invitation with no extensions, or

> iii) up to 90 days after the effective date of the ML for any complete new applications for direct to Firm Commitments.

Read More: Lenders Compliance Group

Tags: Mortgage Market

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