HUD Incorporates HECM Requirements into Single-Family Handbook 4000.1

HUD recently announced that it has consolidated and incorporated all of the requirements applicable to HECMs into the Single-Family Housing Policy Handbook 4000.1 (Handbook), primarily in Sections II.B (for origination through post-closing and endorsement requirements) and III.B (for servicing and loss mitigation requirements).  However, Section II.D (involving appraisal requirements) and Appendix 9.0 (involving assumed loan periods for calculating HECM total annual loan cost (TALC) rates) have also been updated.  The deadline to submit feedback on the updated Handbook is November 30, 2023.

As HUD notes, this consolidation process has eliminated over 100 individual policy documents related to HECMs. HUD also published new model HECM loan documents and other HECM-specific documents which can be found on HUD’s Single Family Model Documents webpage. The HECM policies in the updated Handbook may be implemented immediately but must be implemented by April 29, 2024.