FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Mortgagee Closing Requirements (04/10/2025)

FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Mortgagee Closing Requirements (04/10/2025)

a. Mortgagee Closing Requirements (04/10/2025) The case binder must contain the required documents identified on the HECM Required Documents for Endorsement stacking order and include all documentation that has been relied upon in support of the Mortgagee’s decision to approve the HECM. i. Title The Mortgagee must ensure that all objections to title have been cleared and any discrepancies have been resolved to ensure that the HECM liens are the first and second (if applicable) lien(s) of record. (A) Good and Marketable Title (1) Standard The Mortgagee must determine if there are any exceptions to good and marketable title not covered by the General Waiver. See General HECM Insurance Eligibility and 24 CFR § 203.389. The Mortgagee must review any exceptions discovered during the title search and decide whether such title exceptions affect the Property’s value and/or marketability. If the Mortgagee determines that any exception affects the Property’s value and/or marketability, the Mortgagee must request a waiver. (2) Required Documentation The Mortgagee must obtain Title Evidence demonstrating good and marketable title. (B) Requests for Title Exceptions Not Covered by the General Waiver The Mortgagee must submit a request for a waiver when the Title Exception is not covered by the General Waiver to the FHA Resource Center at [email protected] prior to endorsement. The request must include the case number, the specific II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 693 Last Revised: 11/26/2025 guideline, and the reason the Mortgagee is asking for the waiver. If the waiver is granted, FHA will notify the Mortgagee in writing. The Mortgagee must place the notice of approval in the mortgage file. If the waiver request is denied and good and marketable title is not obtained, the HECM is not eligible for FHA insurance. (C) Evidence of Hazard Insurance Policy Mortgagees must verify evidence of a Hazard Insurance policy that is at least equal to the value of insurable property improvements. For condominiums, see the Condominiums – Insurance section. (D) Evidence of Title Insurance Policy or Commitment The Mortgagee must verify evidence of a title insurance policy at least equal to the MCA. The title insurance policy must show that: 1. the Borrower owns or, for purchase transactions, will own the Property: • in Fee Simple; or • on a Leasehold that is under a lease with a duration lasting until the later of: • a renewable lease for not less than 99 years; or • a lease with the actuarial life expectancy of the Mortgagor; and 2. the Mortgage will be a first lien of record when recorded. (E) Manufactured Housing Good and marketable title showing the Manufactured Home and land are classified as real estate at the time of closing is required. If there were two existing titles at the time the housing unit was purchased, the Mortgagee must ensure that all state or local requirements for proper purging of the title (chattel or equivalent debt instrument) have been met, and the subject Property is classified as real estate prior to endorsement. The Manufactured Home need not be taxed as Real Property. ii. Legal Restrictions on Conveyance (Free Assumability) The Mortgagee must determine that there are no legal restrictions on conveyance in accordance with 24 CFR § 206.45(e). iii. Closing in Compliance with Mortgage Approval The Mortgagee must instruct the settlement agent to close the HECM in the same manner in which it was approved. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 694 Last Revised: 11/26/2025 The Mortgagee must ensure that the conditions listed on form HUD-92900-A, HUD Addendum to Uniform Residential Loan Application, and/or form HUD-92800.5B, Conditional Commitment Direct Endorsement Statement of Appraised Value, are satisfied. iv. Principal Limit Calculation at Closing (A) Definition Float Down Option refers to the calculation of the Principal Limit at closing when the Expected Rate in effect on the date of closing is lower than the Expected Rate used when the lock-in agreement was signed by the Borrower. (B) Standard The Mortgagee must calculate the Principal Limit at closing if there is no lock-in agreement. In accordance with the lock-in agreement terms and conditions, if the lock-in agreement includes a float down option, the Mortgagee may recalculate the Principal Limit if the Expected Rate in effect on the date of closing has declined and is now lower than the Expected Rate used for the lock-in agreement. The Mortgagee is not permitted to charge a fee for recalculating the Principal Limit. The Mortgagee must verify the Principal Limit Factor is based on the age of the youngest Borrower or Eligible NBS, rounded up to the nearest whole year if the next birthday is less than 183 Days after closing. v. Establishing the Note Rate The Mortgagee must use indices in effect on the date of closing to calculate the first year accrual rate. For adjustable interest rate HECMs, the Mortgagee must use the same mortgagee’s margin that was used to calculate the Principal Limit amount for the initial Note rate and the periodic adjustments to the Note rate. For all interest rate options, the index value used to determine the initial Note rate and periodic adjustments must not be below zero. In the event the current index for an adjustable interest rate HECM falls below zero, the current index will be deemed to be zero for purposes of calculating the Borrower’s Note rate. (A) Constant Maturity Treasury Index The weekly averages of the one-month, one-year, and Constant Maturity Treasury (CMT) indices are published in the Federal Reserve Board Statistical Release H.15. The weekly averages of the 1-month and 1-year CMT are available in the “Treasury constant maturities” section of the H.15. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 695 Last Revised: 11/26/2025 Mortgagees closing a HECM on Monday must use the index from the Statistical Release issued the previous Monday (one week earlier). (B) Secured Overnight Financing Rate (SOFR) Index The Federal Reserve Bank of New York publishes the 30-day average SOFR index each business day on their website. The Mortgagee must use the rate published on the first business day of each week and which is in effect the next day after the index is published. The rate remains in effect until the subsequent index rate becomes effective the following week. The published 30-Day Average SOFR index figure shall be rounded to three digits to the right of the decimal point. Mortgagees closing a HECM on Monday must use the index issued the previous Monday (one week earlier). vi. Assignment Insurance Option (A) Definition Assignment Insurance Option refers to a Mortgagee’s right to assign the HECM to HUD when the outstanding balance is equal to or greater than 98 percent of the MCA, or when a request for a line of credit draw will cause the outstanding balance to equal or exceed 98 percent of the MCA. (B) Standard The Mortgagee must designate the assignment insurance option. vii. Closing in the Mortgagee’s Name A HECM may close in the name of the Mortgagee or the sponsoring Mortgagee, the principal, or the authorized agent. TPOs that are not FHA-approved Mortgagees may not close in their own names or perform any functions in FHAC. viii. Required Forms The Mortgagee must use the forms and/or language prescribed by FHA in the legal documents used for closing the HECM. (A) Mortgage and Note The Mortgagee must complete a first Mortgage and first Note (fixed or adjustable rate) to secure any payments made by the Mortgagee to the Borrower. (B) Second Mortgage and Note For adjustable rate HECMs, the Mortgagee must complete a second Mortgage and second Note to secure any payments that may be made by HUD to the Borrower. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 696 Last Revised: 11/26/2025 For fixed rate HECMs, a second Mortgage and Note are optional. (C) Condominium If the HECM to be insured is secured by a Condominium Unit, the appropriate mortgage rider must be used. The Mortgagee must obtain the certificate of insurance or complete copy of the insurance policy. (D) HECM Repair Rider The Mortgagee must verify the amount of the Repair Set-Aside is equal to 150 percent of the cost of the required repairs, plus the repair administration fee. The Mortgagee must obtain a Repair Rider, signed and dated by the Borrower, when the required repairs will be completed after closing. (E) Payment of Property Charges The Mortgagee must verify the loan agreement includes the Borrower’s designation for payment of Property Charges. ix. HECM Borrower, Non-Borrowing Spouse, and Non-Borrowing Owner Certifications (A) Standard The Mortgagee must obtain the Borrower’s and NBS’s signatures on form HUD- 92900-A. The Mortgagee must confirm whether all Borrowers are legally married and obtain the appropriate certification from each Borrower and any NBS. The required certifications, if applicable, are: • unmarried Borrower; • married Borrower with Eligible NBS; • married Borrower with Ineligible NBS; • Eligible NBS; or • Ineligible NBS. The Mortgagee must obtain certifications from the NBS and any Non-Borrowing Owner that show: • consent to the Borrower to obtain HECM financing; • acknowledgement of the terms and conditions of the Mortgage; and • acknowledgement that the Property will serve as collateral for the HECM as evidenced by the first and second HECM liens. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 697 Last Revised: 11/26/2025 (B) Required Documentation At closing, Mortgagees must obtain all required certifications from each Borrower, NBS, and Non-Borrowing Owner. x. Designation of Alternate Individual (A) Definition The Home Equity Reverse Mortgage Information Technology (HERMIT) System refers to HUD’s HECM Servicing platform for collecting MIP, managing all servicing activities and paying insurance claims. See the HERMIT User Guide for detailed information regarding using the platform. (B) Standard Prior to or at closing, the Mortgagee must request that the Borrower designate an alternate individual for the purpose of communicating with the Mortgagee if the Mortgagee is unable to reach the Borrower for any reason, including death or incapacitation. The designation of the alternate individual is at the discretion of the Borrower. The Mortgagee must use the HERMIT System to enter contact information for the alternate individual, if provided. If the Mortgagee is unable to make contact or communicate with the Borrower for any reason, including death or incapacitation, the Mortgagee must communicate with the alternate individual, if one has been designated by the Borrower. xi. Principal Residence Verification The Mortgagee must ensure the Property is the Principal Residence of each Borrower and Eligible NBS. xii. Required Closing Certifications (A) Borrower Certification The Borrower must sign the certification to the Addendum to HUD-1. (B) Settlement Agent Certification The settlement agent must sign the certification to the Addendum to HUD-1. (C) Lender Certification The Mortgagee must sign the certifications on form HUD-92900-A in accordance with the instructions provided on the form. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 698 Last Revised: 11/26/2025 xiii. Inspection and Repair Requirements for HECMs Pending Closing in Presidentially-Declared Major Disaster Areas (A) Standard All Properties with HECMs pending closing in areas under a Presidentially-Declared Major Disaster Area (PDMDA) designated for individual assistance must have an onsite damage inspection report that identifies and quantifies any dwelling damage, which includes interior and exterior photographs. The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the Property, and the report must be dated after the Incident Period (as defined by FEMA) or 14 Days from the Incident Period start date, whichever is earlier. The Appraiser may, at their discretion, perform a Remote Observation of the Property. If the effective date of the appraisal is on or after the date required above for an inspection, a separate damage inspection report is not necessary. FHA does not require the Appraiser to ensure utilities are on at the time of this inspection if they have not yet been restored for the area. Damage inspections may be completed by any FHA Roster Appraiser in good standing with geographic competence in the affected market. If the Mortgagee uses a different Appraiser than the Appraiser that did the original inspection of the Property, the Appraiser performing the damage inspection must be provided with a complete copy of the original appraisal. All damages must be repaired by licensed contractors or according to local jurisdictional requirements. All damages, regardless of amount, must be repaired and the Property restored to pre-loss condition with appropriate and applicable documentation. Based on the damage amount, repairs may be: • completed prior to closing; or • completed after closing provided that required repairs are included in a Repair Rider, if sufficient funds are available for a Repair Set-Aside, and repair costs do not exceed permissible thresholds. See Pending HECM Closing table. For HECM for Purchase transactions, see the Inspection and Repair Requirements for HECMs Pending Closing in Presidentially-Declared Major Disaster Areas section in the HECM for Purchase product sheet. (B) Required Documentation Mortgagees must include the damage inspection report in the case binder for all Properties. The following table shows additional required documentation based on the extent of damages. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 699 Last Revised: 11/26/2025 Pending HECM Closing If... Then... No damage exists, Close HECM and provide initial damage inspection report. Damages are below $5,000 and Property is habitable, Complete repairs prior to closing and provide initial damage inspection report; or Establish Repair Set-Aside prior to closing and provide initial damage inspection report and Repair Rider. See Required Repairs in the HECM for Purchase product sheet. Damages are $5,000 or above and the Property is habitable, Do not close the HECM. Repairs must be completed prior to closing. Provide initial and final damage inspection report. The Property is not habitable, Do not close the HECM. Repairs must be completed prior to closing. Provide initial and final damage inspection report. (C) Pre-closing Appraisal Validity in Disaster Areas For HECMs that are not closed prior to the Incident Period, as defined by FEMA, in PDMDAs where a damage inspection report reveals property damage, the appraisal validity period is extended from 180 Days to a maximum of one year from the effective date of the original appraisal. In no instance will an appraisal be acceptable for a mortgage closing that has an effective date beyond one year. HECMs with appraisals having effective dates in excess of one year require a new appraisal. xiv. Closing Costs and Fees (A) Standard The Mortgagee must ensure that all fees charged to the Borrower comply with all applicable federal, state, and local laws and disclosure requirements. The Mortgagee must ensure, after the initial payment of HECM proceeds, that there will be no outstanding or unpaid obligations incurred by the Borrower in connection with the HECM transaction, except in cases involving loan servicing charges and any Repair Set-Aside. (1) Mandatory Obligations (a) Definition Mandatory Obligations refer to fees and/or charges incurred in connection with the origination of the HECM that are requirements for loan approval and II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 700 Last Revised: 11/26/2025 which will be paid at closing or during the First 12-Month Disbursement Period. (b) Standard The Mortgagee must ensure the Borrower’s Mandatory Obligations are paid off. Mandatory Obligations are limited to: • IMIP; • loan origination fee; • HECM counseling fee; • reasonable and customary amounts, but not more than the amount actually paid by the Mortgagee for any of the following items: • recording fees and recording taxes or other charges incident to the recordation of the HECM; • credit report; • survey, if required by the Mortgagee or the Borrower; • title examination; • Mortgagee’s title insurance; • fees paid to an Appraiser for the appraisal of the Property; and • flood certification; • repair administration fee; • Repair Set-Asides; • delinquent Federal Debt; • amounts required to discharge any existing liens on the Property: • judgment liens recorded against the Property secured by the HECM; • customary fees and charges for warranties, inspections, surveys, and engineer certifications; • funds to pay contractors who performed repairs as a condition of closing, in accordance with standard FHA requirements for repairs required by the Appraiser; • property tax, Flood and Hazard Insurance payments required by the Mortgagee to be paid at closing; • for fixed rate HECMs: the total amount of Property Charges scheduled for payment during the First 12-Month Disbursement Period from a Fully Funded LESA. Mortgagees must use the actual insurance premium and actual tax amount; and • for adjustable rate HECMs: • the total amount of property charge payments scheduled for payment from the Borrower-authorized option as set forth in 24 CFR § 206.205 during the First 12-Month Disbursement Period; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 701 Last Revised: 11/26/2025 • the total amount of semiannual Disbursements scheduled to be made during the First 12-Month Disbursement Period to the Borrower from a Partially Funded LESA; and • the total amount of Property Charges scheduled for payment during the First 12-Month Disbursement Period from a Fully Funded LESA. Mortgagees must use the actual insurance premium and actual tax amount. (2) Seasoning Requirements for Existing Non-HECM Liens (a) Standard The Mortgagee must determine the age of the lien and, if necessary, the amount of funds provided to the Borrower. The Mortgagee may use HECM proceeds to pay off existing non-HECM liens if: • the liens have been in place for longer than 12 months prior to the date of the HECM closing; • the lien resulted in the Borrower receiving $500 or less in cash, whether at closing or through cumulative draws prior to the date of the HECM closing; or • the lien has been in place for 12 months or less prior to the date of the HECM closing, but funds were used exclusively for the purpose of making required repairs needed to satisfy MPR or MPS. For a Home Equity Line of Credit (HELOC) that does not meet the seasoning requirements above, the Mortgagee may pay off the Borrower’s HELOC using Borrower funds, the HECM proceeds, or a combination of HECM proceeds and Borrower funds, as long as the Initial Disbursement Limit or Borrower’s Advance remains at or under 60 percent of the Principal Limit. (b) Required Documentation To document the age of the lien, the Mortgagee must use the HUD-1, Closing Disclosure, or other documents, such as a title report, credit reports, or documents related to the transaction that contain the required information. To document the Borrower received $500 or less in cash, the Mortgagee must review the HUD-1 or equivalent document from the transaction that resulted in a lien that is to be paid off using HECM proceeds, the payoff statement, or documents related to the transaction. To document the use of funds from a lien in place for 12 months or less, where more than $500 was received by and/or disbursed to the Borrower, and such funds were utilized for home improvements, the Mortgagee must collect documentation, such as canceled checks, paid contractor invoices, or other documents evidencing actual use of loan funds. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 702 Last Revised: 11/26/2025 For HELOCs, the Mortgagee must obtain the most recent HELOC statement or its equivalent. (3) Third-Party Fees The Mortgagee may charge the Borrower third-party fees incurred to originate the HECM. FHA may authorize or reject any other charge, or the amount of any charge, based on what is reasonable and customary in the area. (a) Appraisal Fee and Inspection Fee The Mortgagee may charge reasonable and customary amounts, but not more than the amount actually paid by the Mortgagee. The Borrower may finance the cost of a second appraisal required by the collateral risk assessment. (b) Credit Report The Mortgagee may charge the actual cost for a merged-in file report, which contains the information currently available from three consumer credit information repositories. (c) Deposit Verification Charge The Mortgagee may charge the actual charge imposed by the depository institution or TPV. (d) Document Preparation Fee The Mortgagee may charge a document preparation fee if this service is performed by a third party who is not controlled by the Mortgagee. The Mortgagee may not charge a fee if it performs this service itself. (e) Property Survey The Mortgagee may charge a property survey fee if a survey is required by the Mortgagee. A survey is not required by FHA. (f) Title Examination and Title Insurance Policy A title insurance policy at least equal to the MCA must be submitted in the closing package, and the Borrower may pay for these items. (g) Attorney’s Fees The Mortgagee may charge Attorney’s Fees only if the attorney is not an employee of the Mortgagee or is not an attorney who routinely receives referrals from a particular Mortgagee and issues the title insurance. If an attorney who is not an employee of the Mortgagee is routinely used on referral II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 703 Last Revised: 11/26/2025 from the Mortgagee to close loans and issue title insurance, the Borrower may only be charged a notary fee. (h) Settlement Fees The Mortgagee may charge settlement fees only if the closing agent is not an employee of the Mortgagee. A fee may be charged if the settlement agent is an independent company or a subsidiary of the Mortgagee that regularly closes loans for several different Mortgagees. (i) Sponsored Third-Party Originator The Mortgagee may pay fees for services performed by a sponsored TPO from the loan origination fee. (j) Tax Service Fee The Mortgagee may charge the Borrower a tax service fee to verify the Borrower’s property tax payment history from all taxing authorities and the annual amount of property taxes due. The maximum fee must be a reasonable and customary amount and may not exceed the actual amount paid by the Mortgagee. (k) Recording Fees and Taxes The Mortgagee may charge recording fees on the first and second Mortgages that are customary or required in the area, and recording taxes on the first Mortgage that are required. The second Mortgage is not subject to any state or local recording taxes, or stamp taxes, because the second Mortgage is a Mortgage to the federal government. (l) Tests or Treatments The Mortgagee may charge for tests or treatments required by FHA such as tests of water supplies, soil percolation tests for individual septic systems, or testing for or treating insect infestation. (m)Courier Fees Upon Borrower request, the Mortgagee may charge a courier fee for delivery of a mortgage Payoff to a lien holder and for closing documents to and from the settlement agent. If this arrangement will take place, a written agreement between the Borrower and the Mortgagee must be executed before closing. Online processing and delivery of a mortgage Payoff to a lien holder and for closing documents to and from the settlement agent are the sole responsibility of the Mortgagee and must be paid from the loan origination fee. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 704 Last Revised: 11/26/2025 (4) Property Assessed Clean Energy The PACE obligation must be paid off in full at closing. The Borrower may use HECM proceeds to satisfy the PACE obligation. For HECM for Purchase transactions, see the Property Assessed Clean Energy section of the product sheet. (5) Prohibition on Non-Mandatory Obligations Judgments that appear on the credit report or on public records that are not liens against the Property secured by the HECM are not Mandatory Obligations and may not be paid off at closing using HECM proceeds. Uniform Commercial Code liens placed against leased equipment or a leased energy system is not a Mandatory Obligation and may not be paid off at closing using HECM proceeds. (6) Collecting Customary and Reasonable Fees The Mortgagee may collect customary and reasonable amounts, but not more than the amount actually paid by the Mortgagee, for any of the following items: • recording fees and recording taxes, or other charges incident to the recordation of the insured Mortgage; • credit report; • survey, if required by the Mortgagee or the Borrower; • title examination; • Mortgagee’s title insurance; • fees paid to an Appraiser for the initial appraisal of the Property; • flood certifications; • third-party property tax verification fee; and • repair administration fee. If the Property requires repairs after closing in order to meet FHA requirements, the Mortgagee must collect the repair administration fee by adding it to the mortgage balance. (7) Loan Origination Fees (a) Definition Loan Origination Fee refers to charges and fees incurred in connection with the origination, processing, and closing of the HECM. (b) Loan Origination Fee Calculation The Mortgagee may charge an origination fee which is the greater of: • $2,500; or II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 705 Last Revised: 11/26/2025 • 2 percent of the MCA of $200,000, plus 1 percent of any portion of the MCA that is greater than $200,000. The total amount of the loan origination fee may not exceed $6,000. Mortgagees may accept a lower origination fee. Mortgagees may pay fees for services performed by a sponsored TPO and these fees may be included as part of the loan origination fee. The loan origination fee may be fully financed with the Mortgage. (B) Required Documentation The Mortgagee must obtain the final HUD-1 Settlement Statement or similar legal document from the settlement agent. xv. Payment of Initial Mortgage Insurance Premium Payment of IMIP is processed automatically once the originating Mortgagee or servicing Mortgagee completes loan setup in HERMIT. Mortgagees may pay a portion or full amount of IMIP. For HECM for Purchase transactions, see the Initial Mortgage Insurance Premium Amount section of the product sheet. xvi. Annual Mortgage Insurance Premium The Mortgagee must remit the monthly MIP on the outstanding balance from the latter of the date of closing or the day after the expiration of the rescission period. xvii. Closing Date The Mortgagee must enter the Closing Date in block I on page 1 of the HUD-1. xviii. Disbursement Date (A) Definition The Disbursement Date refers to the date the proceeds of the HECM are made available to the Borrower. (B) Standard The Disbursement Date must occur before the expiration of the FHA-issued Firm Commitment or Direct Endorsement approval and credit documents. The Mortgagee must enter the Disbursement Date in block I on page 1 of the HUD-1. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 706 Last Revised: 11/26/2025 xix. Upload of Marriage Documentation in HERMIT for Eligible Non-Borrowing Spouse Once the originating Mortgagee or servicing Mortgagee completes loan setup in HERMIT, the Mortgagee must upload a copy of the Borrower and Eligible NBS’s marriage certificate, legal opinion certifying the validity of the marriage, or other evidence sufficient to establish the legal validity of the marriage in HERMIT. xx. Right of Rescission and Interest Accruals HECM proceeds may not be disbursed until after the expiration of the three-day rescission period under 12 CFR Part 1026, if applicable. The interest charged on the outstanding loan balance must begin to accrue from the Disbursement Date and must be added to the outstanding loan balance monthly. Mortgagees are prohibited from charging interest on funds held available for the Borrower during the three-day rescission period. xxi. Signatures The Mortgagee must ensure that the Mortgage, Note, and all closing documents are signed by all required parties in accordance with Borrower Eligibility. The Mortgagee must ensure that the signatures block on the Mortgage follows the Fannie Mae/Freddie Mac format, with the following exceptions: witness signatures are only required if witnesses are required by state law; and the Borrower’s SSN may be omitted. xxii. Use of Power of Attorney at Closing (A) Standard A Borrower, NBS, or Non-Borrowing Owner may designate an attorney-in-fact to use a POA (durable or otherwise) to sign documents on their behalf at closing. Unless required by applicable state law, or as stated in the Exception below, or they are a Family Member of the Borrower, NBS, or Non-Borrowing Owner, none of the following persons connected to the transaction may sign the security instrument or Note as the attorney-in-fact under a POA: • Mortgagee or any employee or Affiliate; • HECM originator or employer or employee; • title insurance company providing the title insurance policy, the title agent closing the HECM, or any of their Affiliates; or • any real estate agent or any person affiliated with such real estate agent. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 6. Closing Handbook 4000.1 707 Last Revised: 11/26/2025 (B) Exception Closing documents may be signed by an individual who is connected to the transaction provided they are listed as an attorney-in-fact in a POA expressly authorizing them to execute the required documents on behalf of a Borrower, NBS, or Non-Borrowing Owner. Acceptance of such an attorney-in-fact’s signature is further conditioned upon the attorney-in-fact obtaining, in a recorded interactive session conducted via the internet, a statement that the Borrower, NBS, or Non-Borrowing Owner has: • confirmed their identity; and • reaffirmed, after an opportunity to review the required mortgage documents, their agreement to the terms and conditions of the required mortgage documents evidencing such transaction and to the execution of such required Mortgage by such attorney-in-fact. (C) Required Documentation The Mortgagee must obtain copies of the signed initial and final RLARM, loan agreement, Certificate of HECM Counseling, and Part IV of the initial form HUD- 92900-A signed by the Borrower or attorney-in-fact in accordance with Signature Requirements for All Application Forms. xxiii. Use of Court-Appointed Conservator or Guardian (A) Standard A court-appointed conservator or guardian may execute any necessary documents of any Borrower, NBS, or Non-Borrowing Owner lacking legal competency. (B) Required Documentation The Mortgagee must obtain a copy of the court order granting the conservator or guardian the authority to act for and/or obligate the Borrower, NBS, or Non- Borrowing Owner.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Mortgagee Closing Requirements (04/10/2025) · source URL · snapshot 8c03836f77f317e1