source:
  type: regulation
  id: hud-ml-2026-06
  authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
    203(k) Rehabilitation Mortgage Insurance Program
  description: HUD Mortgagee Letter 2026-06 (June 23, 2026) — Increase in the Maximum Number of Draw Requests
    for Limited 203(k) Rehabilitation Mortgage Insurance Program. Raises the Limited 203(k) draw-request
    maximum to four per contractor, clarifies initial/intermediate/final draws and multiple disbursements,
    and updates related Handbook 4000.1 Release of Funds provisions; effective immediately. Full verbatim
    text captured section-by-section from the HUD source PDF.
obligations:
- id: hud-ml-2026-06-purpose
  canonical_id: hud-ml-2026-06-purpose
  section: HUD ML 2026-06 — Purpose
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Purpose
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: This Mortgagee Letter (ML) increases the maximum number of allowable draws under
      the Limited 203(k) program and clarifies draw disbursement procedures to strengthen risk controls
      and reduce administrative burden.
- id: hud-ml-2026-06-effective-date
  canonical_id: hud-ml-2026-06-effective-date
  section: HUD ML 2026-06 — Effective Date
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Effective Date
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The provisions of this ML are effective immediately. All updates will be incorporated
      into a forthcoming update of the HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook
      (Handbook 4000.1).
- id: hud-ml-2026-06-affected-programs
  canonical_id: hud-ml-2026-06-affected-programs
  section: HUD ML 2026-06 — Affected Programs
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Affected Programs
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The provisions of this ML apply to Section 203(k) Rehabilitation Mortgage Insurance
      Program transactions.
- id: hud-ml-2026-06-background-ml-2024-13
  canonical_id: hud-ml-2026-06-background-ml-2024-13
  section: HUD ML 2026-06 — Background (prior ML 2024-13 changes)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Background (prior ML 2024-13 changes)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: On July 9, 2024, FHA increased the maximum rehabilitation amount under the Limited
      203(k) program from $35,000 to $75,000 and extended the rehabilitation period from six months to
      nine months through ML 2024-13, Revisions to the 203(k) Rehabilitation Mortgage Insurance Program
      including updates to the 203(k) Consultant Requirements and Fees.
- id: hud-ml-2026-06-background-policy-update
  canonical_id: hud-ml-2026-06-background-policy-update
  section: HUD ML 2026-06 — Background (draw request policy update)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Background (draw request policy update)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: FHA is updating its Limited 203(k) program draw request policy to allow a maximum
      of four draws per contractor and to clarify the treatment of initial, intermediate, and final draws.
      A scheduled intermediate draw may have two separate disbursements if needed without increasing the
      total number of draws permitted. While FHA has not increased the number of allowable draws under
      the Standard 203(k) program, FHA is clarifying that multiple disbursements per draw are allowed.
- id: hud-ml-2026-06-summary-of-changes
  canonical_id: hud-ml-2026-06-summary-of-changes
  section: HUD ML 2026-06 — Summary of Changes
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Summary of Changes
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: 'This ML: • updates Limited 203(k) Ineligible Improvements/Repairs (II.A.8.a.vii(B))
      for rehabilitation activities that require more than two payments per contractor; • clarifies that
      multiple disbursements per draw are allowed under Standard 203(k) Release of Funds (II.A.8.a.xviii(C)(1)(d)(i));
      • clarifies that a draw may include two separate disbursements under Limited 203(k) Release of Funds
      (II.A.8.a.xviii(C)(1)(d)(ii)); and • increases the maximum number of draw requests under Limited
      203(k) Release of Funds (II.A.8.a.xviii(C)(1)(d)(ii)).'
- id: hud-ml-2026-06-limited-ineligible-improvements
  canonical_id: hud-ml-2026-06-limited-ineligible-improvements
  section: HUD ML 2026-06 — Limited 203(k) Ineligible Improvements/Repairs (II.A.8.a.vii(B))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Limited 203(k) Ineligible Improvements/Repairs
      (II.A.8.a.vii(B))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: 'The Limited 203(k) mortgage proceeds may not be used to finance major rehabilitation
      or major remodeling. FHA considers a repair to be “major” when any of the following are applicable:
      • the repair or improvements are expected to require more than nine months to complete; • the rehabilitation
      activities require more than four draws per contractor; • the required repairs arising from the
      appraisal: o necessitate a Consultant to develop a specification of repairs/Work Write-Up; or o
      require plans or architectural exhibits; or • the repair prevents the Borrower from occupying the
      Property for more than a total of 30 Days during the rehabilitation period.'
- id: hud-ml-2026-06-timeliness-of-release
  canonical_id: hud-ml-2026-06-timeliness-of-release
  section: HUD ML 2026-06 — Release of Funds — Timeliness of Release (II.A.8.a.xviii(C)(1)(d))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Release of Funds — Timeliness of Release (II.A.8.a.xviii(C)(1)(d))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The Mortgagee must release funds within five business days after receipt of a properly
      executed draw request and title update when necessary.
- id: hud-ml-2026-06-standard-max-draws
  canonical_id: hud-ml-2026-06-standard-max-draws
  section: HUD ML 2026-06 — Standard 203(k) Release of Funds — Maximum Number of Draw Requests (II.A.8.a.xviii(C)(1)(d)(i))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Standard 203(k) Release of Funds — Maximum Number
      of Draw Requests (II.A.8.a.xviii(C)(1)(d)(i))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The Mortgagee may approve a maximum of five draw requests (four intermediate and
      one final). Each draw may include multiple disbursements. A draw with multiple disbursements counts
      as one draw.
- id: hud-ml-2026-06-standard-contingency-reserve
  canonical_id: hud-ml-2026-06-standard-contingency-reserve
  section: HUD ML 2026-06 — Standard 203(k) Release of Funds — Contingency Reserve (II.A.8.a.xviii(C)(1)(d)(i))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Standard 203(k) Release of Funds — Contingency
      Reserve (II.A.8.a.xviii(C)(1)(d)(i))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: To allow use of contingency funds for improvements other than health and safety when
      rehabilitation is incomplete, the Mortgagee must determine that it is unlikely that any health or
      safety deficiency will be discovered, and that the Mortgage will not exceed 95 percent of the After
      Improved Value.
- id: hud-ml-2026-06-standard-method-of-payment
  canonical_id: hud-ml-2026-06-standard-method-of-payment
  section: HUD ML 2026-06 — Standard 203(k) Release of Funds — Method of Payment (II.A.8.a.xviii(C)(1)(d)(i))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Standard 203(k) Release of Funds — Method of
      Payment (II.A.8.a.xviii(C)(1)(d)(i))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: 'The Mortgagee will release escrow funds upon completion of the rehabilitation in
      compliance with the Work Write-Up. The Mortgagee must issue checks to both the Borrower and contractors
      as co-payees, unless the Borrower provides written authorization, at each draw, to issue the check
      directly to the contractor. The Mortgagee may issue the check directly to the Borrower alone if
      the release is for: • materials for work performed under a self-help agreement; or • materials for
      items prepaid by the Borrower under contract with the supplier.'
- id: hud-ml-2026-06-limited-max-draws
  canonical_id: hud-ml-2026-06-limited-max-draws
  section: HUD ML 2026-06 — Limited 203(k) Release of Funds — Maximum Number of Draw Requests (II.A.8.a.xviii(C)(1)(d)(ii))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Limited 203(k) Release of Funds — Maximum Number
      of Draw Requests (II.A.8.a.xviii(C)(1)(d)(ii))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The Mortgagee may approve a maximum of four draw requests per contractor or for the
      Borrower (if acting as the contractor). These consist of the initial draw at closing, no more than
      two intermediate draws during the rehabilitation process, and release of the final draw. Each draw
      may include up to two separate disbursements. A draw with two disbursements counts as one draw.
- id: hud-ml-2026-06-limited-repairs-under-15000
  canonical_id: hud-ml-2026-06-limited-repairs-under-15000
  section: HUD ML 2026-06 — Limited 203(k) Release of Funds — Total Repair Costs Less Than or Equal to
    $15,000 (II.A.8.a.xviii(C)(1)(d)(ii))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Limited 203(k) Release of Funds — Total Repair
      Costs Less Than or Equal to $15,000 (II.A.8.a.xviii(C)(1)(d)(ii))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The Mortgagee must ensure that the repairs and/or improvements have been completed
      by obtaining contractor’s receipts or a signed Borrower’s Letter of Completion. The Mortgagee is
      not required to perform or have others perform inspections of the completed work.
- id: hud-ml-2026-06-limited-repairs-over-15000
  canonical_id: hud-ml-2026-06-limited-repairs-over-15000
  section: HUD ML 2026-06 — Limited 203(k) Release of Funds — Total Repair Costs Exceeding $15,000 (II.A.8.a.xviii(C)(1)(d)(ii))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Limited 203(k) Release of Funds — Total Repair
      Costs Exceeding $15,000 (II.A.8.a.xviii(C)(1)(d)(ii))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The Mortgagee must ensure that the repairs and/or improvements have been completed
      by performing an inspection or by obtaining an inspection by a third party to determine that the
      repairs have been satisfactorily completed. The Mortgagee must obtain a signed Borrower’s Letter
      of Completion.
- id: hud-ml-2026-06-limited-contingency-reserve
  canonical_id: hud-ml-2026-06-limited-contingency-reserve
  section: HUD ML 2026-06 — Limited 203(k) Release of Funds — Contingency Reserve (II.A.8.a.xviii(C)(1)(d)(ii))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Limited 203(k) Release of Funds — Contingency
      Reserve (II.A.8.a.xviii(C)(1)(d)(ii))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: The Mortgagee must ensure funds escrowed in the Contingency Reserve are used solely
      to pay for the proposed repairs or improvements and any unforeseen items related to these repair
      items.
- id: hud-ml-2026-06-limited-method-of-payment
  canonical_id: hud-ml-2026-06-limited-method-of-payment
  section: HUD ML 2026-06 — Limited 203(k) Release of Funds — Method of Payment (II.A.8.a.xviii(C)(1)(d)(ii))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - origination
  - 203k
  - rehabilitation
  - draw-requests
  - ml-2026-06
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-06 — Increase in the Maximum Number of Draw Requests for Limited
      203(k) Rehabilitation Mortgage Insurance Program — Limited 203(k) Release of Funds — Method of Payment
      (II.A.8.a.xviii(C)(1)(d)(ii))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-06hsgml.pdf
    snapshot_id: 04b09ff11a0050bb
    fetched_at: '2026-07-13T02:16:15Z'
    content_hash: sha256:7c332fa554c9d4bd6ebc58e19b64dae1367476a3e08563689bd9004a97e0af37
    paragraph_quote: 'The Mortgagee will release rehabilitation escrow funds upon completion of the rehabilitation
      in compliance with the work plan. The Mortgagee may issue checks solely to the contractor, or issue
      checks to the Borrower and the contractor as co-payees. The Mortgagee may issue the check directly
      to the Borrower alone if the release is for: • materials for work performed under a self-help agreement;
      or • materials for items prepaid by the Borrower under contract with the supplier.'
