The Federal Housing Administration today issued a proposal making changes to its single-family loan and lender-level certifications in an effort to encourage greater bank participation in the FHA program. Comments on the proposal will be due June 8.
FHA is proposing to revise the addendum to the Uniform Residential Loan Application to provide greater clarity, streamline information and better align language in the addendum with existing statute and FHA policy. In addition, the proposal would streamline annual lender certifications while continuing to hold lenders accountable for compliance with HUD eligibility and approval requirements.
Finally, FHA is proposing to update its defect taxonomy to include more consistent “severity tier” definitions, potential remedies that align each severity tier, revised sources and causes in certain defect areas, new defect areas for servicing loan reviews and HUD policy references.