Compliance Calendar

This Announcement describes the following updates:

▪ Updates to Expense Reimbursement*: provides clarification and further instruction related to expense reimbursement policies

▪ Miscellaneous update:

o Retirement of Form 2200

View the list of impacted topics.

*Policy change not applicable to reverse mortgage loans.

In the wake of the devastation caused by Hurricane Helene, the Federal Housing Administration (FHA) reminds mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations in the U.S. and its territories where the President has declared a Major Disaster under the Stafford Act. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond.

The following guidance serves as a reminder that applies to all Presidentially-Declared Major Disaster Areas (PDMDA), which can be found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1):

Loan Servicing and Loss Mitigation

The mortgagee may offer forbearance relief to a borrower with a mortgaged property or place of employment located within a PDMDA as follows:

• Informal Forbearance for Borrowers in PDMDAs. The mortgagee may consider borrowers in PDMDAs for an Informal Forbearance and may offer additional Informal
Forbearance periods if the foreclosure moratorium is extended, as mentioned below.

• Formal Forbearance for Borrowers in PDMDAs. The mortgagee may consider Formal Forbearances for borrowers in PDMDAs while they are pursuing home repairs
and/or resolving verifiable financial difficulties related to the disaster, provided that:

o The forbearance period does not exceed the estimated time needed to complete the home repairs and

o The total accumulated mortgage arrearages during the forbearance period do not exceed the equivalent of 12 months of principal, interest, taxes, and
insurance (PITI).

• FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster declaration.

• In PDMDAs, FHA provides mortgagees an automatic 90-day extension from the foreclosure moratorium expiration date to commence or recommence a foreclosure
action or evaluate the borrower under HUD’s Loss Mitigation Program.

• For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Handbook 4000.1 Section III.A.3.c.iii, Monitoring of Repairs to
Substantially Damaged Homes.

Mortgagees should review complete servicing guidance in Handbook 4000.1, Sections III.A.2, relating to the servicing of mortgages in PDMDAs.

Mortgagees are reminded to contact affected borrowers who may require loss mitigation assistance as soon as possible post-disaster, and FHA encourages mortgagees to use any permissible means to contact borrowers to provide them with needed forbearance relief. Because of the extensive destruction in connection with Hurricane Helene and disruption to modes of communication, mortgagees may offer and provide the forbearance unless the borrower affirmatively declines the offer.

Home Equity Conversion Mortgages

• HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day
extension of HECM foreclosure timelines.

• In PDMDAs, FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure extension expiration date to commence or
recommence a foreclosure action.

This Guide Bulletin announces:

• CHOICERenovation® and CHOICEReno eXPress® Mortgages

➢ The refactoring of Guide Chapter 4607

➢ The introduction of Loan Status HubSM – November 2, 2024

➢ Updates to CHOICERenovation Mortgages – November 25, 2024

➢ New delivery requirements – March 31, 2025

• Asset and income modeler

➢ An enhancement to automated employment assessment with Loan Product Advisor® – October 14, 2024

• Duty to Serve Credit Fee Cap

➢ Pricing pipeline coverage for Mortgages originated by a Small Financial Institution – January 1, 2025

• Additional Guide updates

➢ Further updates as described in the Additional Guide updates section of this Bulletin

EFFECTIVE DATE

All of the changes announced in this Bulletin are effective immediately unless otherwise noted.

USDA Rural Development (RD) remains committed to assisting borrowers impacted by disasters and understands that some may experience unique and unparalleled circumstances in their hardships. Due to the magnitude and devastation of Hurricane Helene, the USDA reminds servicers of guidance for servicing accounts when a county, parish or municipality has been identified as a Presidentially Declared Disaster (PDD) area.

This announcement outlines relief measures that holders and/or loan servicers of USDA RD mortgages should implement to assist USDA RD borrowers affected by PDDs. Homeowners impacted may be eligible for temporary relief. Servicers can immediately implement the following for borrowers in the designated areas.

1. FORECLOSURE SUSPENSION: The servicer must suspend all foreclosure actions for 90 days for borrowers whose properties or place of employment have been directly impacted in the PDD. This applies to both the initiation of new foreclosures, as well as foreclosures already in process. This suspension shall expire no earlier than 90 days after the date of the PDD unless extended by the USDA.

2. FORBEARANCE: USDA encourages loan servicers to evaluate forbearance options for borrowers in distress in a PDD. Borrowers impacted may be placed on a forbearance of up to 12 months to provide payment relief from their mortgage obligation during this time. Precise and consistent communication with borrowers should help determine whether their difficulties are directly or indirectly related to the PDD, or whether the issue stems from other sources which must be addressed. Guidance relating to this topic can be found in ‘Assistance in Natural Disasters’ located in Chapter 18 of the technical Handbook.

3. REPORTING: Servicers are reminded that they must report the appropriate default status codes associated with the actions taking place. These instructions apply only to USDA Electronic Status Reporting requirements and do not apply to credit bureau reporting. Servicers should confer with their legal team for requirements pertaining to credit bureau reporting.

4. DOCUMENTATION: Servicers should fully document their decisions when loss mitigation servicing actions are implemented. The documentation should substantiate their loss mitigation decision and should follow the Agency’s outline in ‘Assistance in Natural Disasters’, located in Chapter 18 of the technical Handbook.

Questions regarding program policy and this announcement may be directed to the SFHGLP Servicing Division at sfhglpServicing@usda.gov or (833) 314-0168 option 4.

Thank you for your support of the Single-Family Housing Guaranteed Loan Program.

This Guide Bulletin announces:

• Resolve®

➢ The refactoring of sections impacted by the Resolve update

➢ The retirement of Servicing tools – December 9, 2024

➢ Updates related to make-whole pre-foreclosure sales – December 9, 2024

➢ Revised short sale and Freddie Mac Flex Modification® imminent default rules – December 9, 2024

• Freddie Mac Flex Modification

➢ A clarification related to Freddie Mac Flex Modification interest rate determination requirements

• Acknowledgment Agreements

➢ Updates to Acknowledgment Agreements in connection with Servicing Contract Rights

U.S. Department of Agriculture (USDA) Rural Development is extending a pilot program for people in Virginia and 22 other states looking to access affordable financing for building manufactured homes in rural communities.

Originally launched in 2016, the pilot was renewed in 2022 and was set to expire on Nov. 4, 2024. Through the extension, USDA will continue to waive regulatory requirements until May 1, 2025, for applicants seeking financing to build these types of houses. Loans may be used to fund existing manufactured structures and modular homes or build energy-efficient manufactured and modular homes if the applicant is leasing the land on which the home will be built.

This financing is made possible through the Single Family Housing Direct Loans and Single Family Housing Guaranteed Loan programs, which help low- and very-low-income applicants obtain decent and safe homes and assist approved lenders in providing low- and moderate-income households the opportunity to buy or build modest, decent and safe homes in eligible rural areas.

Today’s announcement supports the Biden-Harris Administration’s Housing Supply Action Plan, which seeks to boost new financing mechanisms for building and supplying quality and affordable homes. The pilot is also effective in Colorado, Iowa, Louisiana, Michigan, Mississippi, Montana, Nevada, New Hampshire, New York, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming.

The Department expects to issue a final rule in 2025 to make these waivers permanent. Additional information will be made available in the coming months. See page 82484 of the Oct. 11, 2024, Federal Register to learn more about the pilot extension.

In this Announcement:

• 203(k) Limited Temporary Waiver Hurricane Helene
• Temporary Waiver of 14-day Damage Inspection Reports in Overlapping Presidentially-declared Major Disaster Areas

See below for details:

203(k) Limited Temporary Waiver Hurricane/Tropical Storm Helene and Hurricane Milton

Today, the Federal Housing Administration (FHA) posted a temporary waiver on hud.gov of its 203(k) Rehabilitation Mortgage Insurance Program requirement that states, when a repair is considered "major,” it becomes ineligible to be financed as part of the 203(k) Limited program, if the repairs prevent the borrower from occupying the property for more than 15 days.

As result of the Presidentially-declared Major Disaster Areas (PDMDAs) related to Hurricane/Tropical Storm Helene and Hurricane Milton, many properties were severely impacted or destroyed and are now in serious need of rehabilitation and/or repair. FHA believes a temporary waiver of its definition of "major repair" related to the 15 days (or 30 days after November 4, 2024) needed for repair completion is crucial to ensure homeowners in this PDMDA can rebuild their properties.

Today’s temporary waiver applies to FHA-insured Limited 203(k) mortgages closed on or before August 31, 2025. While this temporary policy waives the 15-day occupancy requirement for this PDMDA, the requirement that at least one borrower resides in the property within 60 days remains the same. For more information, view the published policy in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) II.A.1.b.iii (A) for Principal Residences.

This temporary policy waiver is effective through August 31, 2025. The extended waiver period accounts for any construction delays possibly due to the continued hurricane season as well as the upcoming winter season.

Temporary Waiver of 14-day Damage Inspection Report Requirement in Overlapping Presidentially-declared Major Disaster Areas

Today, the Federal Housing Administration (FHA) issued a temporary waiver of its policy requiring damage inspection reports for properties in Presidentially-declared Major Disaster Areas (PDMDAs) that must be completed after the closure date of an incident period as determined by the Federal Emergency Management Agency (FEMA), or at least 14-days from the start of the incident period, whichever is earlier. This temporary waiver of a second 14-day incident period applies specifically to inspection reports associated with the Hurricane Milton PDMDA (DR-4834-FL), as declared on October 11, 2024.

Due to Hurricane/Tropical Storm Helene and Hurricane Milton, both of which severely impacted similar regions within a 14-day period, FHA’s current policy of requiring a
separate 14-day waiting period for damage inspections and reports following each event has created the potential for extensive repair/rehabilitation delays for homebuyers and sellers.

FHA believes that the presence of FEMA in areas already included in the multiple Hurricane/Tropical Storm Helene PDMDAs provides enough stability and risk mitigation to eliminate the requirement for a second 14-day waiting period for inspection and damage reports associated with the Hurricane Milton PDMDA (DR-4834-FL). While this policy waves the 14-day waiting period to conduct the damage inspection report, the requirement to conduct a damage inspection report, and other inspection and repair escrow requirements, for all properties with pending mortgages or endorsements in the PDMDAs remain the same.

In summary, this temporary waiver:

• applies only to properties located within the overlapping PDMDAs;
• waives the 14-day waiting period to conduct the damage inspection report;
• does not waive the damage inspection report or inspection and repair escrow requirements;
• is not applicable to properties located in areas included in the Florida Hurricane Milton PDMDA (DR-4834-FL), unless the properties were also included in a
PDMDA associated with Hurricane/Tropical Storm Helene.

This waiver of Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) policy —sections II.A.7.c, II.B.6.a.xiii, and II.B.7.c. — is effective immediately.
Mortgagees are encouraged to review both waivers. For questions or additional information, contact the FHA Resource Center, referenced below.

Click the link to review the full VA pamphlet.