HUD Updates FHA New Construction Requirements

Weiner Brodsky Kider PC

Weiner Brodsky Kider PC

HUD recently published Mortgagee Letter 2020-36 (ML 2020-36), which updates Federal Housing Administration (FHA) New Construction financing requirements.

The updates include, among others:

  • The removal of the Early Start Letter and Pre-Approval requirements;
  • The consolidation of the requirements for Site Built Housing and Condominium units and Manufactured Housing, regardless of loan-to-value (LTV);
  • The addition of Form HUD-92544 Warranty of Completion as a requirement for all New Construction;
  • The provision for alternative inspections options by a third party, who is a registered architect or structural engineer, in the absence of an International Code Council certified Residential Combination Inspector or Combination Inspector; and
  • The addition of Form HUD-NPMA-99-B, New Construction Subterranean Termite Service Record, as a requirement when New Construction Property is treated with a Physical Barrier System, as reflected on the HUDNPMA-99-A form.

The guidance provided by ML 2020-36 may be used immediately for existing cases but is mandatory for FHA case numbers assigned on or after January 4, 2021.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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