By aligning the Federal Housing Administration’s single-family minimum property requirements with those used by Fannie Mae and Freddie Mac, federal housing authorities would be making one of the most meaningful updates to FHA valuation policy in years, the American Bankers Association and a coalition of roughly a dozen housing and banking groups said today.
Earlier this year, the Department of Housing and Urban Development opened a review of single-family MPRs for FHA mortgages as part of President Trump’s March executive order on promoting access to mortgage credit. FHA later proposed revising its MPRs by aligning them with other industry standards.
ABA previously joined with other associations in urging HUD to align FHA requirements with those used by Fannie and Freddie. In a new letter, ABA and the other signatories said the proposed revisions would make FHA loans more efficient to originate, reducing the costs for lenders and consumers alike.
“By aligning FHA property valuation policies with those of Fannie Mae and Freddie Mac, the proposal will reduce operational, staffing, and compliance costs for lenders and appraisers, while extending to consumers the protections associated with the market’s most widely used financing programs,” the groups said. “This change would significantly reduce the regulatory burden of the FHA program, expanding access for creditworthy borrowers to safe housing with affordable financing.”
