|The Federal Housing Administration came into existence as a result of the National Housing Act of 1934. The main objective behind its establishment was to insure home mortgage made by private lenders and help them underwrite loans for those who may otherwise not qualify for a conventional loan. It became a part of the United States Department of Housing and Urban Development (HUD) in 1965, and since then it has been functioning under this apex body of federal government. The guidelines regarding FHA-insured loans for lenders, appraisers, borrowers and sellers are issued by HUD and are made available through various handbooks and mortgagee letters (ML).
The appraisal guidelines are contained in the handbook 4150.2 whereas the handbooks 4155.1 and 4155.2 contain the underwriting guidelines for lenders and professional underwriters. Similar handbooks and MLs can be found for guidelines regarding loan servicing, short sale and many other mortgage issues. The appraisers must follow the HUD appraisal guidelines in order to bring out any deficiencies in the property concerned and protect the financial interest of the Federal Housing Administration. For proposed, under construction and recently constructed properties, appraisers must receive a fully executed form 92541, Builder’s Certification of Plans and many other documents before beginning the appraisal work.
A lender will require one year builder’s warranty executed on HUD form 92544 in order to finance an FHA-insured single family mortgage. Property inspection is mandatory and must be performed by a certified home inspector. The clearance needs to be documented and the compliance inspector must use the Compliance Inspection Report, form HUD 92051 for that purpose. Similarly there are affidavit form, addendum and other documents that need to be filled during the loan processing system. HUDCLIPS is the source where you can obtain all required forms, handbooks and mortgagee letters. Approved lenders and appraisers can use information stored on federal computers through FHA Connection.
HUD also has a refund program to give back the money it owes to borrowers, which is nothing but the unused fund that homebuyers pay to FHA in insurance premiums. Refund processor managed by a third-party company is not approved. The resources found at HUD website will help you find HUD homes for sale, appraiser roster, approved lenders, list of approved condos, and information on minimum property standards, foreclosures, first time home buyer, rate reduction program and many other topics. You can also contact a HUD office or use its hotline numbers to talk to certified consultants for more information.