The Federal Housing Administration (FHA) published two notices soliciting public comment on proposed information collection for its Single Family Loan Level Certification and Annual Certification on September 1, 2015. According to the U.S. Department of Housing and Urban Development (HUD), the proposals were intended to update these documents, provide clarity, and improve HUD’s enforcement capabilities.

In its 60-Day Notice of Proposed Information Collection: FHA Lender Approval, Annual Renewal, Periodic Updates and Required Reports by FHA-Approved Lenders (“lender-level”), one significant certification addition has been proposed to the Annual Certification for FHA-approved lenders and mortgagees. The proposal requires lenders to certify the following:

• They have not been Debarred, Suspended, Proposed for Debarment, declared ineligible, or voluntarily excluded from covered transactions suspended by any Federal department or agency;
• Within a three-year period preceding the certification, they have not been convicted of or had a civil judgment committed rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public transaction or contract under a public transaction or contract under a public transaction; or violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; They were not indicted for or otherwise criminally or civilly charged by a governmental entity  with commission of any of the offenses enumerated; and
• Within a three-year period preceding this certification, they have not had one or more public transactions terminated for cause or default, except for those occurrences, if any, the Mortgagee reported to HUD during the Certification Period and for which the Mortgagee received explicit clearance from HUD to continue with the certification process.

The Online Application Lender Approval (previously HUD-92001-A) would include a similar certification statement with minor technical differences due to the format of the Online Application. This certification will apply at the lender level instead of the loan level, and thus, any related noncompliance is subject to the procedures of the Mortgagee Review Board.  Comments are due on November 2, 2015.

In addition, effective September 14, 2015, other technical revisions have been made, including the renumbering of statements, minor language changes for consistency between certification versions, terminology updates to reflect the new Single Family Housing Handbook 4000.1, and the removal of ambiguous terms that are captured in requirements or other well-defined terms found in Handbook 4000.1.

In its 30-Day Notice of Proposed Information Collection (“loan-level”), further proposals have been made to the Application for FHA Insured Mortgages (Form HUD-92900-A), FHA/VA Addendum to Uniform Residential Loan Application, which was subject to 60 days of public comment on May 15, 2015. The new proposed revisions add language to the loan-level certification that the lender has not participated in certain prohibited activity. Lenders also must certify at the loan level that they have reviewed the mortgage documents, closing statements, application for insurance endorsement, and all accompanying documents and found it eligible for FHA insurance.

Additional proposed revisions remove references to HUD Handbooks no longer in use by the Office of the Single Family Housing, update language regarding acceptable sources of funds, provide updated non-discrimination language, and update terminology to reflect the new Single Family Housing Handbook 4000.1. Comments are due by October 1, 2015.

The proposed revisions to FHA’s “loan-level” and “lender-level” certifications can be found at this link.