HUD Mortgagee Letter 2022-09 — Calculating Effective Income After a Reduction or Loss of Income for Borrowers Affected by Presidentially-Declared COVID-19 National Emergency

hud-ml-2022-09

HUD ML 2022-09 updates Handbook 4000.1 Sections II.A.4.c (TOTAL) and II.A.5.b (Manual) to instruct Mortgagees how to calculate Effective Income for Borrowers affected by COVID-19 Related Economic Events, including salary, hourly, overtime/bonus/tip, family-owned business, commission, and self-employment income.

Get this register: .xlsx .csv More bundles →

source:
  type: regulation
  id: hud-ml-2022-09
  authority: HUD Mortgagee Letter 2022-09 — Calculating Effective Income After a Reduction or Loss of Income for Borrowers Affected by Presidentially-Declared COVID-19 National Emergency
  description: |
    HUD ML 2022-09 updates Handbook 4000.1 Sections II.A.4.c (TOTAL) and
    II.A.5.b (Manual) to instruct Mortgagees how to calculate Effective Income
    for Borrowers affected by COVID-19 Related Economic Events, including
    salary, hourly, overtime/bonus/tip, family-owned business, commission, and
    self-employment income.
obligations:
  - id: hud-ml-2022-09-effective-date
    canonical_id: hud-ml-2022-09-effective-date
    section: HUD ML 2022-09 — Effective Date
    description: |
      The provisions of HUD ML 2022-09 are effective for all case numbers
      assigned on or after September 5, 2022; [LENDER] may begin using the
      policies announced in the ML immediately.
    type: do
    audit_question: For every FHA case number assigned on or after September 5, 2022, can [LENDER] demonstrate that the ML 2022-09 COVID-19 Effective Income calculation policies were applied where the Borrower was affected by a COVID-19 Related Economic Event?
    program_review: Does the program account for the applicability trigger — applying the COVID-19 Effective Income policies to case numbers assigned on or after September 5, 2022 where the Borrower was affected by a COVID-19 Related Economic Event?
    file_review: Spot-check post-9/5/2022 cases involving a COVID-19 Related Economic Event; confirm the COVID-19 Effective Income policy was applied.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - origination
      - underwriting
      - income
      - covid-19
      - effective-date
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-09 — Effective Date
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-09hsgml.pdf
      snapshot_id: e1fdf1dc5afec054
      fetched_at: '2026-05-22T19:55:35Z'
      content_hash: sha256:5f30fc482e956efc75f043a409f0b75ac9aecfe6c854dd2ae09d99a48009d046
      paragraph_quote: |-
        The provisions of this ML are effective for all case numbers assigned on or 
        after September 5, 2022; however, Mortgagees may begin using the policies 
        announced in this ML immediately.
      drafter_attestation: |
        Copied verbatim from snapshot e1fdf1dc5afec054 (content.txt) at
        2026-05-22T20:00Z. Substring is the Effective Date trigger of
        ML 2022-09.
    promoted_at: '2026-05-22T20:56:00+00:00'
    promoted_from: hud-ml-2022-09-roundb-v1.yaml
  - id: hud-ml-2022-09-hourly-covid-lesser-of
    canonical_id: hud-ml-2022-09-hourly-covid-lesser-of
    section: 'HUD ML 2022-09 — Hourly Employees with Variable Hours: Exception Due to COVID-19 Related Economic Event (II.A.4.c.iii(C)(2)(b))'
    description: |
      For Borrowers paid hourly whose hours vary and who were affected by a
      COVID-19 Related Economic Event, [LENDER] must calculate Effective Income
      using the lesser of (a) the average of income for the period prior to the
      COVID-19 Related Economic Event calculated under the Hourly Standard, or
      (b) the average of income earned since the COVID-19 Related Economic Event.
    type: do
    audit_question: For every Borrower paid hourly with variable hours who was affected by a COVID-19 Related Economic Event, can [LENDER] evidence that Effective Income was calculated as the lesser of (a) the pre-event Hourly Standard average and (b) the average earned since the event?
    program_review: Does the program account for the hourly-variable-hours COVID condition — calculating Effective Income as the lesser of the pre-event Hourly Standard average and the average earned since the event?
    file_review: Spot-check hourly-variable-hours COVID-affected files; confirm Effective Income was the lesser of the pre-event and post-event averages.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - origination
      - underwriting
      - income
      - covid-19
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-09 — II.A.4.c.iii(C)(2)(b)
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-09hsgml.pdf
      snapshot_id: e1fdf1dc5afec054
      fetched_at: '2026-05-22T19:55:35Z'
      content_hash: sha256:5f30fc482e956efc75f043a409f0b75ac9aecfe6c854dd2ae09d99a48009d046
      paragraph_quote: |-
        For employees who are paid hourly and whose hours vary, the 
        Mortgagee must calculate the Effective Income by using the 
        lesser of:
      drafter_attestation: |
        Copied verbatim from snapshot e1fdf1dc5afec054 (content.txt) at
        2026-05-22T20:00Z. Substring is the operative "lesser of" rule
        for hourly variable-hours employees affected by COVID-19 Related
        Economic Events incorporated into Handbook 4000.1
        II.A.4.c.iii(C)(2)(b) by ML 2022-09.
    promoted_at: '2026-05-22T20:56:00+00:00'
    promoted_from: hud-ml-2022-09-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-22T20:56:00+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hud-ml-2022-09-roundb-v1.yaml
    candidates_promoted: 2
    candidates_skipped_existing: 0

Verbatim regulatory text (2)

Verbatim provisions from HUD Mortgagee Letter 2022-09 — Calculating Effective Income After a Reduction or Loss of Income for Borrowers Affected by Presidentially-Declared COVID-19 National Emergency — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

HUD ML 2022-09 — Effective Date

The provisions of this ML are effective for all case numbers assigned on or after September 5, 2022; however, Mortgagees may begin using the policies announced in this ML immediately.

Source: HUD ML 2022-09 — Effective Date · source URL · snapshot e1fdf1dc5afec054

HUD ML 2022-09 — Hourly Employees with Variable Hours: Exception Due to COVID-19 Related Economic Event (II.A.4.c.iii(C)(2)(b))

For employees who are paid hourly and whose hours vary, the Mortgagee must calculate the Effective Income by using the lesser of:

Source: HUD ML 2022-09 — II.A.4.c.iii(C)(2)(b) · source URL · snapshot e1fdf1dc5afec054