Updated HECM Handbook Has Arrived

Updated HECM Handbook Has Arrived

NRMLA’s leadership, committees, and outside counsel are all carefully reviewing the HECM section of the Single-Family Housing Policy Handbook 4000.1 that the Department of Housing and Urban Development (HUD) released this week.

While there’s still a lot of content to digest, we do know that as was published in the recent Federal Register Notice 6382-N-01, HUD included the proposed changes to the HECM for Purchase program in the newly published Handbook 4000.1. Notably, the proposed changes will allow HECM borrowers to satisfy their monetary investment requirement through additional funding sources, such as premium pricing and gifts, and will permit interested party contributions, up to six percent of the sales price, to be used toward the borrower’s origination fees and other closing costs.

The new HECM sections consolidate existing program guidance currently found in over 100 mortgagee letters, various handbooks, the HECM Financial Assessment and Property Charge Guide, and various other policy materials. The sections contain revisions to policy for clarity and consistency, and to conform to the published Handbook 4000.1 organizational structure.

HUD also published new model HECM loan documents and other HECM-specific documents which can be found on HUD’s Single Family Model Documents webpage.

“HECM mortgages are an important tool to help senior homeowners age with security and dignity in their own homes,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “The completion of the HECM sections of our Single-Family Handbook reinforces FHA’s commitment to the HECM program and is part of a larger effort to retool the program for long-term success.”

The HECM policies contained in Handbook 4000.1 can be implemented immediately but must be implemented by April 29, 2024. HUD has invited interested stakeholders to submit comments within 30 calendar days. NRMLA will provide additional updates as we learn more. Download a copy of the Handbook 4000.1. The section on HECMs begins on page 539.

Published by

Darryl Hicks

Darryl Hicks is Vice President of Communications for the National Reverse Mortgage Lenders Association. In this capacity, Hicks writes for NRMLA's publications, manages the association's web sites and social media accounts, assists committees and the Board of Directors, and manages the Certified Reverse Mortgage Professional designation. Prior to joining NRMLA in 1999, Hicks spent three years in the Washington, D.C. bureau for National Mortgage News.