FHA issued Mortgagee Letter 2024-06, updating acceptable funding sources for satisfying a borrower’s monetary investment related to HECM for Purchase transactions. Per the Mortgagee Letter (ML), FHA:
- Added premium pricing as an unacceptable monetary investment funding source;
- Removed discount points from the definition of and standard for interested party contributions (IPCs);
- Updated the standard for IPCs to remove interested party payments for permanent and temporary interest rate buydowns and to exclude mortgagees and third-party originators (TPOs) from making IPCs;
- Removed premium pricing as an exception to IPCs and added an exception for certain fees paid by a mortgagee for services performed by a sponsored TPO;
- Updated the requirements for documenting IPCs;
- Prohibited discount points and interest rate buydowns to be considered as closing costs and fees; and
- Modified model HECM Fixed Mortgage Payment Plan, model Adjustable Rate Mortgage Payment Plans, and model Exhibit II-Schedule of Closing Costs to align with the provisions of this ML.
The provisions of this ML are effective for all HECM case numbers assigned on or after April 29, 2024.
Click to view the FHA Mortgagee Letter 2024-06: https://www.tenaco.com/wp-content/uploads/2024/04/FHA-Mortgagee-Letter-2024-06-04-26-24.pdf
Click to view the FHA Info #2024-22: https://www.tenaco.com/wp-content/uploads/2024/04/FHA-Info-2024-22-04-26-24.pdf
