FHA issued Mortgagee Letter 2020-36 (Letter), announcing updated requirements for new construction financing. Per the Letter, the updated requirements align with the amendments announced in the 2018 final rules that streamlined inspection and warranty requirements. The changes announced in the Letter include:
- Elimination of the Early Start Letter and Pre-Approval requirements
- Consolidation of requirements regardless of loan-to-value;
- Inclusion of FORM HUD-92544 Warranty of Completion as a requirement for all new construction;
- Allowance of alternative inspections by a 3rd party who is a registered architect or structural engineer in the absence of an ICC certified residential combination inspector or combination inspector; and
- Updates to when Form HUD-NPMA-99-B (New Construction Subterranean Termite Service Record) is required (to align with the 4 acceptable termite treatment applications reflected on form HUD-NPMA-99-A).
The new requirements must be used for case numbers assigned on or after January 4, 2021 (lenders may, however, begin using the new requirements immediately).
Click here to view the FHA Mortgagee Letter 2020-36: https://www.tenaco.com/wp-content/uploads/2020/11/FHA-Mortgagee-Letter-2020-36.pdf
