New FHA Policies To Be Implemented

October 12, 2009

New FHA policies now being finalized will be implemented on January 1, 2010. In a letter sent to mortgagees, FHA said it will reaffirm existing policy on appraiser independence and geographic competence. FHA’s appraisal validity period will be reduced from six months to four months. And HUD acknowledged that FHA is considering implementing certain components of HVCC (Home Valuation Code of Conduct) for FHA-insured mortgages, according to a report from the National Association of Realtors.

The mortgagee letter also noted that audited financial statements will be required from supervised mortgagees. FHA will modify its streamline finance process and enhance appraiser independence. The streamline refinance process will include new requirements for seasoning, payment history, income verification, and demonstration of net tangible benefit to the borrower.

Posted in Real Estate