To: All NRMLA Members
As we reported in last evening’s Weekly Report, NRMLA has been communicating with the Department of Housing and Urban Development on HECM for Purchase issues and asking for relief for those borrowers who may have made earnest money deposits ahead of the pending PLF changes.
In response, the Federal Housing Administration this afternoon published FHA Info #17-44 and announced that it has updated its FHA Resource Center Knowledge Base with the following new frequently asked questions (FAQs) regarding Home Equity Conversion Mortgage (HECM) for Purchase Transactions, following the September 19th effective date of the HECM Final Rule. FHA will make further updates to its FAQs in the near future.
When can a Mortgagee take the HECM initial loan application on a property that will serve as collateral for a HECM for Purchase transaction?
The Mortgagee may take the initial loan application either prior to or after the completion of HECM counseling.
Must the Mortgagee obtain a copy of the Certificate of Occupancy?
Yes. Properties are eligible for FHA insurance under the HECM for Purchase program when construction is completed and the property is habitable, as evidenced by the issuance of the Certificate of Occupancy, or its equivalent, by the local jurisdiction. The Certificate of Occupancy is required to be included in the case binder. Mortgagees may obtain the Certificate of Occupancy at any time prior to submission for endorsement.
NRMLA will notify the membership on further updates to this issue.