FHA Single Family Housing Policy Handbook 4000.1, Part II — b. Mortgagee Pre-endorsement Review Requirements (08/19/2024)

FHA Single Family Housing Policy Handbook 4000.1, Part II — b. Mortgagee Pre-endorsement Review Requirements (08/19/2024)

b. Mortgagee Pre-endorsement Review Requirements (08/19/2024) When conducting the pre-endorsement review, the Mortgagee must review and verify data entered in FHA Connection is accurate and correct based on documentation contained in the case binder. The Mortgagee must also review and verify the following items, as applicable. All documents must be legible. i. HECM Late Submission Letter The Mortgagee must confirm that the Late Submission Letter is completed, if necessary. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 710 Last Revised: 11/26/2025 ii. Financial Assessment Worksheet or Equivalent The Mortgagee must confirm that the form is completed, containing all information for HECM approval and LESA requirements. The form must be signed and dated by the underwriter. iii. Borrower and Non-Borrowing Spouse Certifications The Mortgagee must confirm any required certification is completed in accordance with FHA requirements. iv. Evidence of Age The Mortgagee must confirm evidence of the Borrower’s age and the NBS’s age, if applicable, is included. v. Evidence of the Social Security Number The Mortgagee must confirm that the HECM file contains evidence of the Borrower’s and any Eligible NBS’s SSN. vi. HECM Counseling Certificate The Mortgagee must confirm that the HECM file contains the Certificate of HECM Counseling, received from a Participating Agency and signed by the HECM counselor and all individuals required to complete HECM counseling. The Mortgagee must confirm that the HECM file contains evidence of lack of Borrower, NBS, and Non-Borrowing Owner competency if HECM counseling is not provided directly to any HECM Borrower, NBS, or Non-Borrowing Owner. vii. Note (Including HECM Second Note, if Applicable) The Mortgagee must confirm that the Note is the Authoritative Copy, the Borrower name on the Note matches that on the RLARM, and the required language from the Model Note is present. The Mortgagee must also confirm that: • the Note has been executed; • the maximum principal amount, if required by state law, is not higher than the amount referenced on the security instrument; and • all applicable allonges, agreements, and riders are properly executed. The Mortgagee must confirm that the HECM file contains a copy of the HECM First Note and HECM Second Note, if applicable. The Mortgagee must ensure that the HECM Second Note, if applicable, is mailed directly to HUD’s HECM servicing contractor. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 711 Last Revised: 11/26/2025 viii. HECM Security Instrument The Mortgagee must confirm that the security instrument: • is the Authoritative Copy; • has been executed (along with all riders indicated on the last page of the security instrument); • includes, as applicable, a mortgage amount that is at least equal to 150 percent of the MCA; • lists the same property address as the RLARM (Fannie Mae Form 1009); and • lists the FHA case number. After closing, the Mortgagee must record the first Mortgage. ix. HECM Second Security Instrument, if Applicable After closing, the Mortgagee must record the second Mortgage. 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. Recording fees, which are a charge for a service, may be imposed by the local recording office. The Mortgagee must confirm that the HECM file contains a copy of the second security instrument, if applicable. The Mortgagee must ensure that the recorded HECM second security instrument is mailed directly to HUD’s HECM servicing contractor. x. Settlement Statement and Settlement Certification Mortgagees are responsible for the accuracy of the Settlement Statement or similar legal document. The Mortgagee must confirm that the Settlement Statement or similar legal document and the Settlement Certification, if applicable, are complete and signed by the Borrower, seller, as applicable, and settlement agent. If the HUD-1 Settlement Statement or similar legal document is provided separately, the Mortgagee must obtain from the Closing Agent a copy of the final statement provided to the seller to keep in the case binder. The Settlement Statement or similar legal document must indicate that all existing mortgage liens have been fully satisfied or are subordinate to the first and second HECM liens. The Settlement Certification must contain certification language. Mortgagees may not change or alter the certification language; exact wording must be used. A Notice of Rejection will be issued when the certification is missing from the FHA case binder. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 712 Last Revised: 11/26/2025 xi. Payoff Demands The Mortgagee must confirm the most recent payoff demand for any mortgage debt paid off using HECM proceeds is included. xii. Notice to Borrower The Mortgagee must confirm the notice is included. xiii. Loan Agreement and Related Exhibits The Mortgagee must confirm the original loan agreement and the following related exhibits are accurate: • schedule of closing costs and liens; • payment plan; and • Repair Rider, if applicable. The Mortgagee must confirm that the HECM file contains a copy of the loan agreement and related exhibits. The Mortgagee must ensure the original HECM loan agreement and exhibits are mailed directly to HUD’s HECM servicing contractor. xiv. Final Residential Loan Application for Reverse Mortgages The Mortgagee must confirm the RLARM is signed and dated by the Mortgagee and all Borrowers and/or, if applicable, attorney-in-fact. If the final RLARM is not signed by the Mortgagee, the initial application signed by the Mortgagee is acceptable. xv. Form HUD-92900-A, HUD Addendum to Uniform Residential Loan Application The Mortgagee must confirm that form HUD-92900-A, HUD Addendum to Uniform Residential Loan Application, is completed as instructed by FHA and RLARM. xvi. Seasoning Documentation The Mortgagee must confirm documentation supporting compliance with seasoning requirements for existing non-HECM liens is included, if applicable. xvii. Financial Assessment Documentation The Mortgagee must confirm that documentation verifying and supporting the following is included: • credit history, including a credit report; • evidence of CAIVRS authorization code; • evidence that the SAM Excluded Parties List and HUD’s Limited Denial of Participation List was checked; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 713 Last Revised: 11/26/2025 • income verification; • asset verification; • property charge verification; • Residual Income analysis worksheet; • tax deferral waiver or exemption; • HECM for Purchase transactions must include documentation to indicate the Borrower’s recent debts were not borrowed to meet the monetary investment requirement; • cited Extenuating Circumstances and/or Compensating Factors; • Mortgagee’s decision to require a Fully Funded or Partially Funded LESA; and • calculation of the amount of any LESA. Mortgagees must ensure that the Borrower certifies the accuracy and completeness of the financial information. xviii. Good Faith Estimate The Mortgagee must confirm the initial and any revised GFEs are included. xix. Credit Report(s) The Mortgagee must confirm that the HECM file contains a credit report for each Borrower. If there are multiple credit reports, all credit reports must be submitted in the case binder. xx. CAIVRS Report The Mortgagee must confirm that the HECM file contains a clear CAIVRS report or documentation from the creditor agency to support the verification and resolution of the debt. xxi. Asset Verification The Mortgagee must confirm that the HECM file contains the VOD and/or bank statements. xxii. Income Verification The Mortgagee must confirm that the HECM file contains verification of the Borrower’s income. xxiii. Gift Letter The Mortgagee must confirm that the HECM file contains a gift letter, if applicable. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 714 Last Revised: 11/26/2025 xxiv. Total Annual Loan Cost Documentation The Mortgagee must ensure the TALC documentation is included. xxv. Evidence of Calculations The Mortgagee must confirm evidence of calculations is included for: • Principal Limit; • monthly payment; and • line of credit. A screen print is acceptable. xxvi. Life Expectancy Set-Aside The Mortgagee must ensure LESA calculations are included, if applicable. A screen print is acceptable. xxvii. Power of Attorney, Conservator or Guardian The Mortgagee must ensure a durable POA or legal document appointing a conservator or guardian, if applicable, is included. xxviii. Assignment Insurance Option The Mortgagee must ensure selection of the assignment insurance option. xxix. Form HUD-92800.5B, Conditional Commitment Direct Endorsement Statement of Appraised Value The Mortgagee must ensure form HUD-92800.5B, Conditional Commitment Direct Endorsement Statement of Appraised Value, is included. xxx. Form HUD-92051, Compliance Inspection Report, or Fannie Mae Form 1004D/Freddie Mac Form 442, Appraisal Update and/or Completion Report, if Applicable (A) Form HUD-92051, Compliance Inspection Report The Mortgagee must confirm that form HUD-92051, Compliance Inspection Report, is completed, signed, and dated by an approved inspector. Local government inspection with the underwriter certification may be accepted. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 715 Last Revised: 11/26/2025 (B) Fannie Mae Form 1004D/Freddie Mac Form 442, Appraisal Update and/or Completion Report The Mortgagee must confirm that Fannie Mae Form 1004D/Freddie Mac Form 442, Appraisal Update and/or Completion Report, Part B, is completed, signed, and dated by an FHA Appraiser in good standing on the FHA Appraiser Roster. xxxi. Other Property Inspections and Reports, if Applicable The Mortgagee must ensure the HECM file contains property inspections and reports to address deficiencies noted by the Appraiser or otherwise required by the Mortgagee to meet MPR. xxxii. Appraisal Report The Mortgagee must ensure that Fannie Mae Form 1004/Freddie Mac Form 70, Uniform Residential Appraisal Report (URAR), or other appropriate appraisal form, including all attachments and addenda, is complete, and contains the Appraiser’s signature and date. xxxiii. Flood Certification The Mortgagee must ensure the Life of Loan Flood Certification is included. If applicable, the Mortgagee must also obtain a: • FEMA LOMA; • FEMA LOMR; or • FEMA NFIP Elevation Certificate (FEMA Form FF-206-FY-22-152). xxxiv. Specialized Eligibility Documents The Mortgagee must ensure that the HECM file contains all required program-specific documents. xxxv. Existing Properties Exhibits The Mortgagee must confirm that the documentation requirements found in the Property Acceptability Criteria section are in the mortgage file. xxxvi. Hazard Insurance The Mortgagee must ensure the Hazard Insurance policy is equal to the value of the property improvements. xxxvii. Title Insurance The Mortgagee must ensure the HECM file contains a Title Insurance Commitment or other acceptable evidence of title insurance, in an amount not less than the MCA. The title insurance policy must show the Borrower owns the Property in Fee Simple or on a II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 716 Last Revised: 11/26/2025 Leasehold that complies with FHA requirements, and that the Mortgage will be a first lien of record when recorded. c. Inspection and Repair Requirements for HECMs Pending Endorsement in Presidentially-Declared Major Disaster Areas (08/19/2024) i. Standard All Properties with HECMs pending endorsement in areas under a 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 amounts shown in the Pending HECM Endorsement table below, repairs may be: • completed prior to submitting for endorsement; or • completed after endorsement provided that a repair escrow is established, and repair costs do not exceed permissible thresholds. The terms and conditions of establishing a repair escrow are not under FHA’s purview and must be negotiated between the Borrower and Mortgagee. ii. Required Documentation Mortgagees must include the initial damage inspection report in the case binder for all Properties. The following table shows additional required documentation for Properties that have closed but have not been endorsed. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 7. Post-closing and Endorsement Handbook 4000.1 717 Last Revised: 11/26/2025 Pending HECM Endorsement If… Then... No damage exists, Submit the HECM for endorsement and provide the initial damage inspection report. Damages are below $5,000 and the Property is habitable, Complete repairs prior to submitting for endorsement and provide the initial damage inspection report; or Establish a repair escrow prior to submitting for endorsement and provide the initial damage inspection report and repair escrow statement. Damages are $5,000 or above and the Property is habitable, Do not submit the HECM for endorsement. Repairs must be completed prior to endorsement. Provide the initial and final damage inspection report. The Property is not habitable, Do not submit the HECM for endorsement. Repairs must be completed prior to endorsement. Provide the initial and final damage inspection report.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part II — b. Mortgagee Pre-endorsement Review Requirements (08/19/2024) · source URL · snapshot 8c03836f77f317e1