I was fairly excited to see HUD’s press release on Thursday that they had taken action against more than 120 lenders who had violated HUD guidelines. 102 FHA approved lenders were cut off from participation in the FHA program for various reasons. This excitement was only slightly tempered by my knowledge that some of the “cut off” lenders were already out of business anyway for other reasons.
FHA released a notice the other day extending the property flipping waiver, but I didn’t relay the information since I saw there was an obvious mistake in the notice. Please note that this still does not mean that investors can buy properties and resell them with FHA financing prior to the expiration of the 90 day period. This rule is designed to adapt the rule to the fact that lenders often hire other firms or subsidiaries to handle foreclosure sales.
I have been receiving emails and even phone calls asking for the location of the HUD Mortgagee Letter about this all morning so I thought I needed to go ahead and post the details that I have. [Details are now available here]
HUD has created a new online version of the FHA guidelines. There will still be confusion – because HUD rarely makes the implementation of their guidelines completely clear – but at least the HUD 4155 will be up to date. Loan officers and processors can find the new online handbooks here.
For the first time ever, FHA appraisals have effectively actually had fewer extra requirements than conventional loan appraisals. This has been corrected effective April 1st with HUD Mortgagee Letter 2009-09 which establishes appraisal requirements for declining (in other words, most) markets. Of course, many of these policies have already been implicated in practice by lenders.
The long expected lowering of the FHA Cash Out Refinance Loan to Value has now occurred effective for Case Numbers dated April 1, 2009 or later. Details are available in Mortgagee Letter 2009-08 (opens as a Word document) dated March 12, 2009.
As a loan officer, I first began using seller paid down payment assistance programs with my customers almost as soon as the program was available in my area. I remember very clearly the feeling I had at the time that the programs could not last long before HUD put a stop to them. I told every customer I prequalified for the first couple of years that they better hurry up and find a home because their down payment program couldn’t possibly last very long.
FHA 
