FHA adopted rules removing the 10-year protection plan requirement for certain mortgages on newly constructed single family homes. A borrower must currently purchase a 10-year protection plan in order to qualify for FHA mortgage insurance when: the loan is a high loan-to-value mortgage loan; the dwelling was not approved for guaranty, insurance, or a direct loan prior to the time construction was commenced; and the dwelling is less than 1 year old. Effective March 14, 2019, FHA is no longer requiring the purchase of a 10-year protection plan in connection with such a mortgage loan. FHA, however, retains the requirement that a Warranty of Completion of Construction (form HUD-92544) be executed by the builder and the buyer of the newly constructed home as a condition for FHA mortgage insurance.
Click Here to View the FHA Rule Adoption – Removal of 10-Year Protection Plan Requirement
