source:
  type: guide
  id: hud-4000-1-ii-a-applications-and-disclosures
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Applications
    and Disclosures (06/27/2025)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Applications
    and Disclosures (06/27/2025).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-a-applications-and-disclosures-full
  canonical_id: hud-4000-1-ii-a-applications-and-disclosures-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Applications
    and Disclosures (06/27/2025)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Applications
      and Disclosures (06/27/2025)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'a. Applications and Disclosures (06/27/2025) The Mortgagee must
      obtain a completed Fannie Mae Form 1003/Freddie Mac Form 65, Uniform Residential
      Loan Application (URLA), from the Borrower and provide all required federal
      and state disclosures in order to begin the origination process. The Mortgagee
      is responsible for using the most recent version of all forms as of the date
      of completion of the form. i. Contents of the Mortgage Application Package The
      Mortgagee must maintain all information and documentation that is relevant to
      its approval decision in the mortgage file. All information and documentation
      that is required in this Handbook 4000.1, and any incidental information or
      documentation related to those requirements, is relevant to the Mortgagee’s
      approval decision. If after obtaining all documentation required below, the
      Mortgagee has reason to believe it needs additional support of the approval
      decision, the Mortgagee must obtain additional explanation and documentation,
      consistent with information in the mortgage file, to clarify or supplement the
      information and documentation submitted by the Borrower. (A) General Requirements
      (1) Maximum Age of Mortgage Documents (a) General Document Age Documents used
      in the origination and underwriting of a Mortgage may not be more than 120 Days
      old at the Disbursement Date, except for appraisals, II. ORIGINATION THROUGH
      POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages
      1. Origination/Processing Handbook 4000.1 124 Last Revised: 11/26/2025 which
      are subject to separate validity period requirements. Documents whose validity
      for underwriting purposes is not affected by the passage of time, such as divorce
      decrees or Tax Returns, may be more than 120 Days old at the Disbursement Date.
      For purposes of counting Days for periods provided in this Handbook 4000.1,
      Day one is the Day after the effective or issue date of the document, whichever
      is later. (b) Appraisal Validity (i) Initial Appraisal Validity The initial
      appraisal validity period is 180 Days from the effective date of the appraisal
      report. See Ordering Appraisals. (ii) Appraisal Update Where the initial appraisal
      report will be more than 180 Days at Disbursement Date, an appraisal update
      may be performed to extend the appraisal validity period. See Ordering an Update
      to an Appraisal. Where the initial appraisal is updated, the updated appraisal
      is valid for one year after the effective date of the initial appraisal report
      that is being updated. (2) Handling of Documents Mortgagees must not accept
      or use documents relating to the employment, income, assets, or credit of Borrowers
      that have been handled by or transmitted from or through unknown parties or
      Interested Parties. Mortgagees may not accept or use any Third Party Verifications
      (TPV) that have been handled by or transmitted from or through unknown parties,
      Interested Parties, or the Borrower. Exception for Mortgagees and TPOs The Mortgagee
      and TPO are permitted to handle documents relating to the employment, income,
      assets, credit, or occupancy of Borrowers. (a) Information Sent to the Mortgagee
      Electronically The Mortgagee must authenticate all documents received electronically
      by examining the source identifiers (e.g., the fax banner header or the sender’s
      email address) or contacting the source of the document by telephone to verify
      the document’s validity. The Mortgagee must document the name and telephone
      number of the individual with whom the Mortgagee verified the validity of the
      document. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured
      Housing Programs Forward Mortgages 1. Origination/Processing Handbook 4000.1
      125 Last Revised: 11/26/2025 (b) Information Obtained via Internet The Mortgagee
      must authenticate documents obtained from an internet website and examine portions
      of printouts downloaded from the internet. Documentation obtained through the
      internet must contain the same information as would be found in an original
      hard copy of the document. (c) Confidentiality Policy for Credit Information
      Mortgagees must not divulge sources of credit information, except as required
      by a contract or by law. All personnel with access to credit information must
      ensure that the use and disclosure of information from a credit report complies
      with: • the Fair Housing Act, 42 U.S.C. §§ 3601‒3619; • the Fair Credit Reporting
      Act (FCRA), 15 U.S.C. §§ 1681a‒1681x; • the Right to Privacy Act, 5 U.S.C. §
      552a; • the Right to Financial Privacy Act, 12 U.S.C. §§ 3401‒3423; and • the
      Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691a‒1691f. (3) Signature
      Requirements for All Application Forms All Borrowers must sign and date the
      initial and final URLA. All Borrowers must sign and date page two of the initial
      form HUD-92900-A, HUD Addendum to Uniform Residential Loan Application, and
      sign and date the complete final form HUD-92900-A. The application may not be
      signed by any party who will not be on the Note. • For Borrowers that are entities,
      the signatory must be a representative who is duly authorized to bind the entity.
      • A Power of Attorney (POA) may not be used unless the Mortgagee verifies and
      documents that all of the following requirements have been satisfied: o For
      military personnel, a POA may only be used: ▪ when the service member is on
      overseas duty or on an unaccompanied tour; ▪ when the Mortgagee is unable to
      obtain the absent Borrower’s signature on the application by mail or via fax;
      and ▪ where the attorney-in-fact has specific authority to encumber the Property
      and to obligate the Borrower. Acceptable evidence includes a durable POA specifically
      designed to survive incapacity and avoid the need for court proceedings. o For
      incapacitated Borrowers, a POA may only be used where: ▪ a Borrower is incapacitated
      and unable to sign the mortgage application; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 126 Last Revised: 11/26/2025 ▪ the incapacitated individual
      will occupy the Property to be insured, or the Property is being underwritten
      as an eligible Investment Property; and ▪ the attorney-in-fact has specific
      authority to encumber the Property and to obligate the Borrower. Acceptable
      evidence includes a durable POA specifically designed to survive incapacity
      and avoid the need for court proceedings. For guidance on use of POA on closing
      documents refer to Use of Power of Attorney at Closing. Prohibition on Documents
      Signed in Blank Mortgagees are not permitted to have Borrowers sign documents
      in blank, incomplete documents, or blank sheets of paper. (4) Policy on Use
      of Electronic Signatures (a) Definition An Electronic Signature refers to any
      electronic sound, symbol, or process attached to or logically associated with
      a contract or record and executed or adopted by a person with the intent to
      sign the contract or record. FHA does not accept an electronic signature that
      is solely voice or audio. Digital signatures are a subset of electronic signatures.
      (b) Use of Electronic Signatures An electronic signature conducted in accordance
      with the Electronic Signature Performance Standards (Performance Standards)
      is accepted on FHA documents requiring signatures to be included in the case
      binder for mortgage insurance, unless otherwise prohibited by law. Electronic
      signatures meeting the Performance Standards are treated as equivalent to handwritten
      signatures. (c) Electronic Signature Performance Standards The Performance Standards
      are the set of guidelines that govern FHA acceptance of an electronic signature.
      The use of electronic signatures is voluntary. However, Mortgagees choosing
      to use electronic signatures must fully comply with the Performance Standards.
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing
      Programs Forward Mortgages 1. Origination/Processing Handbook 4000.1 127 Last
      Revised: 11/26/2025 (i) The Electronic Signatures in Global and National Commerce
      Act Compliance and Technology A Mortgagee’s electronic signature technology
      must comply with all requirements of the Electronic Signatures in Global and
      National Commerce Act (ESIGN Act), including those relating to disclosures,
      consent, signature, presentation, delivery, and retention, and with any state
      law applicable to the transaction. (ii) Third Party Documents Third Party Documents
      are those documents that are originated and signed outside of the control of
      the Mortgagee, such as the sales contract. FHA will accept electronic signatures
      on Third Party Documents included in the case binder for mortgage insurance
      endorsement in accordance with the ESIGN Act and the Uniform Electronic Transactions
      Act (UETA). An indication of the electronic signature and date should be clearly
      visible when viewed electronically and in a paper copy of the electronically
      signed document. (iii) Authorized Documents Authorized Documents refer to the
      documents on which FHA accepts electronic signatures provided that the Mortgagee
      complies with the Performance Standards. • Mortgage Insurance Endorsement Documents:
      Electronic signatures will be accepted on all documents requiring signatures
      included in the case binder for mortgage insurance except the Note. FHA will
      accept electronic signatures on the Note for forward Mortgages only. FHA will
      not accept electronic signatures on HECM Notes. • Servicing and Loss Mitigation
      Documentation: Electronic signatures will be accepted on any documents associated
      with servicing or loss mitigation services for FHA-insured Mortgages. • FHA
      Insurance Claim Documentation: Electronic signatures will be accepted on any
      documents associated with the filing of a claim for FHA insurance benefits,
      including form HUD-27011, Single Family Application for Insurance Benefits.
      • HUD Real Estate Owned (REO) Documents: Electronic signatures will be accepted
      on the HUD REO Sales Contract and related addenda. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 128 Last Revised: 11/26/2025 (iv) Associating an Electronic
      Signature with the Authorized Document The Mortgagee must ensure that the process
      for electronically signing authorized documents provide for the document to
      be presented to the signatory before an electronic signature is obtained. The
      Mortgagee must ensure that the electronic signature is attached to, or logically
      associated with, the document that has been electronically signed. (v) Intent
      to Sign The Mortgagee must be able to prove that the signer certified that the
      document is true, accurate, and correct at the time signed. Electronic signatures
      are only valid under the ESIGN Act if they are “executed or adopted by a person
      with the intent to sign the record.” Establishing intent includes: • identifying
      the purpose for the Borrower signing the electronic record; • being reasonably
      certain that the Borrower knows which electronic record is being signed; and
      • providing notice to the Borrower that their electronic signature is about
      to be applied to, or associated with, the electronic record. Intent to use an
      electronic signature may be established by, but is not limited to: • an online
      dialog box or alert advising the Borrower that continuing the process will result
      in an electronic signature; • an online dialog box or alert indicating that
      an electronic signature has just been created and giving the Borrower an opportunity
      to confirm or cancel the signature; or • a click-through agreement advising
      the Borrower that continuing the process will result in an electronic signature.
      (vi) Single Use of Signature Mortgagees must require a separate action by the
      signer, evidencing intent to sign, in each location where a signature or initials
      are to be applied. This provision does not apply to documents signed by Mortgagee
      employees or Mortgagee contractors provided the Mortgagee obtains the consent
      of the individual for the use of their electronic signature. The Mortgagee must
      document the employee’s or contractor’s consent. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 129 Last Revised: 11/26/2025 (vii) Authentication Definition
      Authentication refers to the process used to confirm a signer’s identity as
      a party in a transaction. Standard for Authentication Before a Mortgagee submits
      the case for endorsement, the Mortgagee must confirm the identity of the signer
      by authenticating data provided by the signer with information maintained by
      an independent source. Independent sources include, but are not limited to:
      • national commercial credit bureaus; • commercially available data sources
      or services; • state motor vehicle agencies; or • government databases. The
      Mortgagee must verify a signer’s name and date of birth, and either their Social
      Security Number (SSN) or driver’s license number. (viii) Attribution Definition
      Attribution is the process of associating the identity of a signer with their
      signature. Standard for Attribution The Mortgagee must maintain evidence sufficient
      to establish that the electronic signature may be attributed to the individual
      purported to have signed. The Mortgagee must use one of the following methods,
      or combinations of methods, to establish attribution: • selection by or assignment
      to the individual of a Personal Identification Number (PIN), password, or other
      shared secret, that the individual uses as part of the signature process; •
      delivery of a credential to the individual by a trusted third party, used either
      to sign electronically or to prevent undetected alteration after the electronic
      signature using another method; • knowledge base authentication using “out of
      band/wallet” information; • measurement of some unique biometric attribute of
      the individual and creation of a computer file that represents the measurement,
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing
      Programs Forward Mortgages 1. Origination/Processing Handbook 4000.1 130 Last
      Revised: 11/26/2025 together with procedures to protect against disclosure of
      the associated computer file to unauthorized parties; or • public key cryptography.
      (ix) Credential Loss Management Mortgagees must have a system in place to ensure
      the security of all issued credentials. One or a combination of the following
      loss management controls is acceptable: • maintaining the uniqueness of each
      combined identification code and password, such that no two individuals have
      the same combination of identification code and password; • ensuring that identification
      code and password issuances are periodically checked, recalled, or revised;
      • following loss management procedures to electronically deauthorize lost, stolen,
      missing, or otherwise compromised identification code or password information,
      and to issue temporary or permanent replacements using suitable, rigorous controls;
      • using transaction safeguards to prevent unauthorized use of passwords or identification
      codes; or • detecting and reporting any attempts at unauthorized use of the
      password or identification code to the system security unit. (d) Required Documentation
      and Integrity of Records Mortgagees must ensure that they employ industry-standard
      encryption to protect the signer’s signature and the integrity of the documents
      to which it is affixed. Mortgagees must ensure that their systems will detect
      and record any tampering with the electronically signed documents. FHA will
      not accept documents that show evidence of tampering. If changes to the document
      are made, the electronic process must be designed to provide an “audit trail”
      showing all alterations, the date and time they were made, and identify who
      made them. The Mortgagee’s system must be designed so that the signed document
      is designated as the Authoritative Copy. The Authoritative Copy of an electronically
      signed document refers to the electronic record that is designated by the Mortgagee
      or holder as the controlling reference copy. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 131 Last Revised: 11/26/2025 (B) Mortgage Application and Initial
      Supporting Documentation (1) URLA and HUD Addendum to Uniform Residential Loan
      Application Unless otherwise noted, URLA and HUD Addendum to Uniform Residential
      Loan Application (form HUD-92900-A) refer to both initial and final applications.
      The Mortgagee must obtain the Borrower’s initial complete, signed URLA (Fannie
      Mae Form 1003/Freddie Mac Form 65) and page two of form HUD- 92900-A before
      underwriting the mortgage application. The Mortgagee must also include the debt
      of a non-borrowing spouse on the URLA if the Borrower resides in a community
      property state, or the Property being insured is located in a community property
      state, and non-borrowing spouse obligations are not excluded by state law. The
      loan originator identified on the URLA must be the actual licensed loan originator
      regardless of whether the loan originator is employed by a sponsored Third-Party
      Originator (TPO) or the Mortgagee. The URLA must contain the loan originator’s
      name, Nationwide Mortgage Licensing System and Registry (NMLS) identification
      number, telephone number, and signature. (2) Mortgage Application Name Requirements
      (a) Standard All mortgage applications must be executed in the legal names of
      all parties. All mortgage applications must be executed in the name of one or
      more individuals. Mortgage applications from a corporation, partnership, sole
      proprietorship, or trust must be in the name of the entity and also be in the
      name of one or more individuals. Exception Mortgage applications for Governmental
      Entities and HUD-approved Nonprofits that provide assistance to low- or moderate-income
      families may be solely in the corporation’s name. (b) Required Documentation
      The Mortgagee must include a statement that it has verified the Borrower’s identity
      using valid government-issued photo identification prior to endorsement of the
      Mortgage or the Mortgagee may choose to include a copy of such photo identification
      as documentation. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title
      II Insured Housing Programs Forward Mortgages 1. Origination/Processing Handbook
      4000.1 132 Last Revised: 11/26/2025 For nonprofit Borrowers, the Mortgagee must
      obtain a copy of the FHA approval letter from the nonprofit. The Mortgagee must
      also verify that the nonprofit is eligible to be a Borrower as indicated on
      the U.S. Department of Housing and Urban Development (HUD) Nonprofit Roster.
      (C) Borrower Authorization for Verification Information (1) Borrower’s Authorization
      (a) Standard The Mortgagee must obtain the Borrower’s authorization to verify
      the information needed to process the mortgage application. The Mortgagee must
      obtain a non-borrowing spouse’s consent and authorization where necessary to
      verify specific information required to process the mortgage application, including
      the non-borrowing spouse’s consent for the Mortgagee to verify their SSN with
      the Social Security Administration (SSA). (b) Required Documentation For each
      individual or entity, Borrower authorization may be accomplished through a blanket
      authorization form. (2) Form HUD-92900-A, Part II - Borrower Consent for Social
      Security Administration to Verify Social Security Number The Mortgagee must
      obtain the Borrower’s signature on Part II of form HUD- 92900-A to verify the
      Borrower’s SSN with the SSA. (3) Tax Verification Form or Equivalent The Mortgagee
      must obtain the Borrower’s signature on the appropriate Internal Revenue Service
      (IRS) form to obtain Tax Returns directly from the IRS for all credit-qualifying
      Mortgages at the time the final URLA is executed. (D) Borrower’s Authorization
      for Use of Information Protected under the Privacy Act (1) Standard The Mortgagee
      must obtain the Borrower’s consent for use of the Borrower’s information for
      any purpose relating to the origination, servicing, loss mitigation, and disposition
      of the Mortgage or Property securing the Mortgage, and relating to any insurance
      claim and ultimate resolution of such claims by the Mortgagee and FHA. II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward
      Mortgages 1. Origination/Processing Handbook 4000.1 133 Last Revised: 11/26/2025
      (2) Required Documentation The Mortgagee must obtain a signed statement from
      the Borrower that clearly expresses the Borrower’s consent for the use of the
      Borrower’s information as required above. (E) Sales Contract and Supporting
      Documentation (1) Sales Contract (a) Standard The Mortgagee must not originate
      an insured Mortgage for the purchase of a Property if any provision of the sales
      contract violates FHA requirements. The Mortgagee must ensure that (1) all purchasers
      listed on the sales contract are Borrowers, and (2) only Borrowers sign the
      sales contract. An addendum or modification may be used to remove or correct
      any provisions of the sales contract that do not conform to these requirements.
      The Family Member of a purchaser, who is not a borrower, may be listed on the
      sales contract without modification or removal. Family Member is defined as
      follows, regardless of sex or legal marital status: • child, parent, or grandparent;
      o a child is defined as a son, stepson, daughter, or stepdaughter; o a parent
      or grandparent includes a stepparent/grandparent or foster parent/grandparent;
      • spouse or domestic partner; • legally adopted son or daughter, including a
      child who is placed with the Borrower by an authorized agency for legal adoption;
      • foster child; • brother, stepbrother; • sister, stepsister; • uncle, aunt;
      or • son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-
      law, or sister-in-law of the Borrower. (i) Amendatory Clause If the Borrower
      does not receive form HUD-92800.5B, Conditional Commitment Direct Endorsement
      Statement of Appraised Value, before signing the sales contract, the sales contract
      must be amended before closing to include an amendatory clause that contains
      the following language: II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A.
      Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 134 Last Revised: 11/26/2025 “It is expressly agreed that notwithstanding
      any other provisions of this contract, the purchaser shall not be obligated
      to complete the purchase of the property described herein or to incur any penalty
      by forfeiture of earnest money deposits or otherwise, unless the purchaser has
      been given, in accordance with HUD/FHA or VA requirements, a written statement
      by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct
      Endorsement lender setting forth the appraised value of the property of not
      less than $___________*. The purchaser shall have the privilege and option of
      proceeding with consummation of the contract without regard to the amount of
      the appraised valuation. The appraised valuation is arrived at to determine
      the maximum mortgage the Department of Housing and Urban Development will insure.
      HUD does not warrant the value or condition of the property. The purchaser should
      satisfy himself/herself that the price and condition of the property are acceptable.”
      * Mortgagees must ensure the actual dollar amount of the sales price stated
      in the contract has been inserted in the amendatory clause. Increases to the
      sale price require a revised amendatory clause. An amendatory clause is not
      required in connection with: • HUD REO sales; • FHA’s 203(k) mortgage program;
      • sales in which the seller is: o Fannie Mae; o Freddie Mac; o U.S. Department
      of Veterans Affairs (VA); o United States Department of Agriculture (USDA) Rural
      Housing Services; o other federal, state, and local government agencies; o a
      Mortgagee disposing of REO assets; or o a seller at a foreclosure sale; or •
      sales in which the Borrower will not be an owner-occupant (for example, sales
      to nonprofit agencies). (ii) Real Estate Certification The Borrower, seller,
      and the real estate agent or broker involved in the sales transaction must certify,
      to the best of their knowledge and belief, that (1) the terms and conditions
      of the sales contract are true and (2) any other agreement entered into by any
      parties in connection with the real estate transaction is part of, or attached
      to, the sales agreement. A separate certification is not needed if the sales
      contract contains a statement that (1) there are no other agreements between
      parties and the terms constitute the entire agreement between the parties, and
      (2) all II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured
      Housing Programs Forward Mortgages 1. Origination/Processing Handbook 4000.1
      135 Last Revised: 11/26/2025 parties are signatories to the sales contract submitted
      at the time of underwriting. (iii) Property Assessed Clean Energy Where the
      subject Property is encumbered with a Property Assessed Clean Energy (PACE)
      obligation, the sales contract must include a clause specifying that the PACE
      obligation will be satisfied by the seller at, or prior to, closing. (b) Required
      Documentation The Mortgagee must obtain all signed copies of sales contract(s),
      including a complete copy of the final sales contract with any modifications
      or revisions agreed upon by Borrower and seller. (2) Statement of Appraised
      Value The Borrower must receive a copy of form HUD-92800.5B. A statement of
      appraised value is not required in connection with: • HUD REO sales; • FHA’s
      203(k) mortgage program; • sales in which the seller is: o Fannie Mae; o Freddie
      Mac; o the VA; o USDA Rural Housing Services; o other federal, state, and local
      government agencies; o a Mortgagee disposing of REO assets; or o a seller at
      a foreclosure sale; or • sales in which the Borrower will not be an owner-occupant
      (for example, sales to nonprofit agencies). ii. Disclosures and Legal Compliance
      (A) HUD Required Disclosures The Mortgagee must provide or ensure the Borrower
      is provided with any disclosure required by FHA, including the following disclosures.
      (1) Informed Consumer Choice Disclosure The Mortgagee must provide the Borrower
      with an Informed Consumer Choice Disclosure in accordance with the requirements
      of 24 CFR § 203.10 if the Borrower may qualify for similar non FHA-insured mortgage
      products offered by the Mortgagee. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 136 Last Revised: 11/26/2025 (2) Form HUD-92900-B, Important
      Notice to Homebuyers The Mortgagee must provide the Borrower with a copy of
      form HUD-92900-B, Important Notice to Homebuyers, signed by the Borrower and
      provide the Borrower with a copy to keep for the Borrower’s records when the
      Borrower applies for the Mortgage. The Mortgagee must retain the original form
      HUD-92900-B signed by the Borrower. (3) Lead-Based Paint If the Property was
      built before 1978, the seller must disclose any information known about lead-based
      paint and lead-based paint hazards before selling the house, in accordance with
      the HUD-EPA Lead Disclosure Rule (24 CFR 35, subpart A, and the identical 40
      CFR 745, subpart F). For such Properties, the Mortgagee must ensure that: •
      the Borrower has been provided the EPA-approved information pamphlet on identifying
      and controlling lead-based paint hazards (“Protect Your Family from Lead in
      Your Home”); • the Borrower was given a 10-Day period before becoming obligated
      to purchase the home to conduct a lead-based paint inspection or risk assessment
      to determine the presence of lead-based paint or lead-based paint hazards, or
      waived the opportunity; • the sales contract contains an attachment in the language
      of the contract (e.g., English, Spanish), signed and dated by both the seller
      and purchaser: o containing a lead warning statement as set forth in 24 CFR
      § 35.92(a)(1); o providing the seller’s disclosure of the presence of any known
      lead- based paint and/or lead-based paint hazards in the target housing being
      sold, or indication of no knowledge of such presence; o listing any records
      or reports available to the seller pertaining to lead- based paint and/or lead-based
      paint hazards in property housing being sold, or indication by the seller that
      no such records or reports exist; and o affirming that the Borrower received
      the pamphlet, disclosure, and records or reports, above; and • when any agent
      is involved in the transaction on behalf of the seller, the sales contract includes
      a statement that the agent has informed the seller of the seller’s Lead Disclosure
      Rule obligations, the agent is aware of their duty to ensure compliance with
      the requirements of the Rule, and the agent has signed and dated the contract.
      (4) Form HUD-92564-CN, For Your Protection: Get a Home Inspection Mortgagees
      are required to provide form HUD-92564-CN, For Your Protection: Get a Home Inspection,
      to prospective homebuyers at first contact, be it for pre- qualification, pre-approval,
      or initial application. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A.
      Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 137 Last Revised: 11/26/2025 (B) Compliance with All Applicable
      Laws, Rules, and Requirements The Mortgagee is required to comply with all federal,
      state, and local laws, rules, and requirements applicable to the mortgage transaction,
      including all applicable disclosure requirements and the requirements of the
      Consumer Financial Protection Bureau (CFPB), including those related to: • Truth
      in Lending Act (TILA); and • Real Estate Settlement Procedures Act (RESPA).
      (C) Nondiscrimination Policy The Mortgagee must fully comply with all applicable
      provisions of: • the Fair Housing Act, 42 U.S.C. §§ 3601–3619; • the FCRA, 15
      U.S.C. §§ 1681a‒1681x; and • the ECOA, 15 U.S.C. §§ 1691a‒1691f. The Mortgagee
      must make all determinations with respect to the adequacy of the Borrower’s
      income in a uniform manner without regard to race, color, religion, sex, age,
      national origin, familial status, disability, marital status, receipt of public
      assistance, location of the Property, or because the applicant has in good faith
      exercised any right under the Consumer Credit Protection Act. iii. Application
      Document Processing (A) Mortgagee Responsibilities The Mortgagee must order
      the FHA case number and perform any associated tasks in FHA Connection (FHAC).
      For a Single-Unit Approval, the Mortgagee must follow the Single-Unit Approval
      case number assignment process. The Mortgagee may use nonemployees in connection
      with its origination of FHA-insured Mortgages only as described below. The Mortgagee
      ultimately remains responsible for the quality of the Mortgage and for strict
      compliance with all applicable FHA requirements, regardless of the Mortgagee’s
      relationship to the person or entity performing any particular service or task.
      (1) Sponsored Third-Party Originator The Mortgagee is responsible for dictating
      the specific application and processing tasks to be performed by the sponsored
      TPO. Only HUD-approved Mortgagees acting in the capacity of a sponsored TPO
      may have direct access to FHAC. (2) Housing Counseling Services Mortgagees must
      ensure that Borrowers receive all required counseling, and that all counseling
      is provided by HUD-approved housing counseling agencies. II. ORIGINATION THROUGH
      POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages
      1. Origination/Processing Handbook 4000.1 138 Last Revised: 11/26/2025 (3) Other
      Contract Service Providers The Mortgagee may utilize Eligible Contractors to
      perform the following administrative and clerical functions: typing of mortgage
      documents, mailing out and collecting verification forms, ordering credit reports,
      and/or preparing for endorsement and shipping Mortgages to investors. (4) Excluded
      Parties The Mortgagee may not contract with entities or persons that are suspended,
      debarred, or otherwise excluded from participation in HUD programs, or under
      a Limited Denial of Participation (LDP) that excludes their participation in
      FHA programs. The Mortgagee must ensure that no sponsored TPO or contractor
      engages such an entity or person to perform any function relating to the origination
      of an FHA-insured Mortgage. The Mortgagee must check the System for Award Management
      (SAM) and must follow appropriate procedures defined by that system to confirm
      eligibility for participation. (B) Initial Document Processing The Mortgagee
      begins processing the Mortgage by obtaining an initial URLA (Fannie Mae Form
      1003/Freddie Mac Form 65) and Part V of form HUD-92900-A. (1) Ordering Case
      Numbers The Mortgagee must use FHAC to order FHA case numbers. A case number
      can be obtained only when the Mortgagee has an active mortgage application for
      the subject Borrower and Property. In order to obtain a case number, the Mortgagee
      must: • provide the subject Borrower’s name, SSN, and date of birth; • provide
      the property address; and • certify that the Mortgagee has an active mortgage
      application for the subject Borrower and Property. The Mortgagee is not required
      to input appraiser information at the time the case number is ordered. (a) Automated
      Data Processing Codes FHA Automated Data Processing (ADP) Codes are derived
      from the section of the National Housing Act under which the Mortgage is to
      be insured. The Mortgagee must select the correct ADP code for each Mortgage
      in FHAC. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured
      Housing Programs Forward Mortgages 1. Origination/Processing Handbook 4000.1
      139 Last Revised: 11/26/2025 (b) Case Numbers on Sponsored Originations The
      Mortgagee will not be able to order case numbers for sponsored originations
      unless their sponsored TPO has been registered in FHAC. (2) Holds Tracking If
      FHAC detects that a case number currently exists for the Property, a case number
      will not be assigned. The Mortgagee will receive notification that the case
      number assignment has been placed in Holds Tracking. The Mortgagee must review
      the Holds Tracking screen in FHAC to determine the necessary actions to obtain
      a case number. (3) Canceling and Reinstating Case Numbers (a) Canceling a Case
      Number The Mortgagee may request cancellation of a case number by submitting
      a request to FHAC. (b) Automatic Case Number Cancellations Case numbers without
      an appraisal logged into FHAC are automatically canceled after six months if
      one of the following actions is not performed as a last action: • Firm Commitment
      issued by FHA; • insurance application received and subsequent updates; or •
      Notices of Return (NOR) or resubmissions. Cases with an appraisal logged are
      not subject to automatic cancelation for one year from the appraisal effective
      date. Updates to the Borrower’s name or property address, an appraisal update,
      or a transmission of the Upfront Mortgage Insurance Premium (UFMIP) do not constitute
      Last Action Taken. (c) Reinstatement of Case Numbers The Mortgagee may request
      reinstatement of canceled case numbers by submitting a request to FHAC. Case
      numbers that were automatically canceled will be reinstated only if the Mortgagee
      provides evidence that the subject Mortgage closed prior to cancellation of
      the case number, such as a Closing Disclosure or similar legal document. II.
      ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs
      Forward Mortgages 1. Origination/Processing Handbook 4000.1 140 Last Revised:
      11/26/2025 (4) Transferring Case Numbers (a) Requirements for the Transferring
      Mortgagee The original Mortgagee must assign the case number to the new Mortgagee
      using the Case Transfer function in FHAC immediately upon the Borrower’s request.
      The original Mortgagee may provide processing documents but is not required
      to do so. The original Mortgagee may not charge the Borrower for the transfer
      of any documents, but the original Mortgagee may negotiate a fee with the new
      Mortgagee for providing the processing documents. The original Mortgagee is
      never entitled to a fee for the transfer of processing documents for a Streamline
      Refinance. (b) Case Number Transfer Involving a Sponsored Third-Party Originator
      Where a case number is transferred to a new approved Mortgagee or sponsored
      TPO, the original Mortgagee, its authorized agent, or sponsored TPO that is
      also an FHA-approved Mortgagee must complete the appropriate sections in FHAC
      as described in the FHAC Guide – Case Processing Support Functions. (5) Ordering
      Title Commitments The Mortgagee must order a title commitment to ensure the
      Property will be properly titled and the Mortgage secured in accordance with
      FHA requirements. (6) Ordering Appraisals The Mortgagee must order a new appraisal
      for each case number assignment and may not reuse an appraisal that was performed
      under another active or endorsed case number, even if the prior appraisal is
      not yet more than 180 Days old. (a) Appraisal Integrity The Mortgagee is responsible
      for identifying any problems or potential problems with the integrity, accuracy
      and thoroughness of an appraisal submitted to FHA for mortgage insurance purposes.
      Appraisers must comply with the Uniform Standards of Professional Appraisal
      Practice (USPAP), including the Competency Rule, when conducting appraisals
      of Properties intended as security for FHA-insured financing. In appraising
      any Property for the purpose of obtaining FHA II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 141 Last Revised: 11/26/2025 mortgage insurance, the Appraiser
      must certify that they are capable of performing the appraisal because they
      have the necessary qualifications and access to all necessary data. The Mortgagee
      must ensure that FHA is listed on the appraisal report as an intended user of
      the appraisal. (b) Selection of a Qualified Appraiser The Mortgagee must order
      an appraisal from an Appraiser who is listed on the FHA Appraiser Roster and
      is qualified and knowledgeable in the specific market area in which the Property
      is located. The Mortgagee must evaluate the Appraiser’s education, training
      and actual field experience to determine whether the Appraiser has sufficient
      qualifications to perform the appraisal before assignment. The Mortgagee may
      not discriminate on the basis of race, color, religion, sex, age, national origin,
      familial status, disability, or marital status in the selection of an Appraiser.
      (c) Use of Appraisal Management Company or Third-Party Contractors The Mortgagee
      may engage an Appraisal Management Company (AMC) to perform services related
      to the obtaining of an appraisal. The Mortgagee remains responsible for the
      acts of its AMC or third-party contractors. The Mortgagee may not pay the AMC
      and other third-party contractors fees in excess of what is customary and reasonable
      for such services in the market area where the Property being appraised is located.
      Any management fees must be for actual services related to the ordering process,
      or review of appraisal for FHA financing. (d) Appraiser Independence The Mortgagee
      must ensure it does not compromise the Appraiser’s independence. The Mortgagee,
      or any third party specifically authorized by the Mortgagee, is responsible
      for selecting, retaining, and providing for payment of all compensation to the
      Appraiser. The Mortgagee or authorized third party may not allow the Appraiser
      to be selected, retained, managed, or compensated by a mortgage broker or any
      member of a Mortgagee’s or authorized third party’s staff who is compensated
      on a commission basis tied to the successful completion of a Mortgage, or who
      is not independent of the Mortgagee’s mortgage production staff or processes
      or the authorized third party’s staff or processes. II. ORIGINATION THROUGH
      POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages
      1. Origination/Processing Handbook 4000.1 142 Last Revised: 11/26/2025 The Mortgagee
      must ensure that it does not: • compensate the Appraiser at a rate that is not
      commensurate in the market area of the Property being appraised with the assignment
      type, complexity and scope of work required for the appraisal services performed;
      • withhold or threaten to withhold timely payment or partial payment for an
      appraisal report; • prohibit the Appraiser from recording the fee paid for the
      performance of the appraisal in the appraisal report; • condition the ordering
      of an appraisal report or the payment of an appraisal fee, salary, or bonus
      on the opinion, conclusion or valuation to be reached, or on a preliminary value
      estimate requested from an Appraiser; • provide to the Appraiser, appraisal
      company, AMC or any entity or person related to the Appraiser, appraisal company
      or AMC, stock or other financial or nonfinancial benefits; • order, obtain,
      use, or pay for a second or subsequent appraisal or Automated Valuation Model
      (AVM) in connection with a Mortgage financing transaction unless: o there is
      a reasonable basis to believe that the initial appraisal was flawed or tainted
      and such belief is clearly and appropriately noted in the mortgage file; or
      o such appraisal or AVM was completed pursuant to written, preestablished bona
      fide pre- or post-Disbursement appraisal review or quality control process or
      underwriting guidelines and the Mortgagee adheres to a policy of selecting the
      most reliable appraisal, rather than the appraisal that states the highest value;
      • withhold or threaten to withhold future business from an Appraiser, or demote
      or terminate or threaten to demote or terminate an Appraiser in order to influence
      an Appraiser to arrive at a predetermined or desired value; • make expressed
      or implied promises of future business, promotions, or increased compensation
      for an Appraiser in order to influence an Appraiser to arrive at a predetermined
      or desired value; • allow the removal of an Appraiser from a list of qualified
      Appraisers or the addition of an Appraiser to an exclusionary list of qualified
      Appraisers, used by any entity, without prompt written notice to such Appraiser.
      The notice must include written evidence of the Appraiser’s illegal conduct,
      violation of USPAP or state licensing standards, improper or unprofessional
      behavior, or other substantive reason for removal; • request that an Appraiser
      provide an estimated, predetermined, or desired valuation in an appraisal report
      prior to the completion of the appraisal report, or request that an Appraiser
      provide estimated values II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A.
      Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 143 Last Revised: 11/26/2025 or comparable sales at any time
      prior to the Appraiser’s completion of an appraisal report; • provide to the
      Appraiser an anticipated, estimated, encouraged, or desired value for a subject
      Property or a proposed, or target amount to be loaned to the Borrower, except
      that a copy of the sales contract for purchase and any addendum must be provided;
      or • perform any other act or practice that impairs or attempts to impair an
      Appraiser’s independence, objectivity, or impartiality, or that violates any
      applicable law, regulation, or requirement. (e) Additional Requirements When
      Ordering an Appraisal The Mortgagee must provide to the selected Appraiser the
      FHA case number and a complete copy of the subject sales contract including
      all addenda, land lease, surveys and other legal documents contained in the
      mortgage file necessary to analyze the Property. The Mortgagee must disclose
      all known information regarding any environmental hazard that is in or on the
      subject Property, or in the vicinity of the Property, whether obtained from
      the Borrower, the real estate broker, or any other party to the transaction.
      Where the Mortgagee determines that the Property is subject to a PACE obligation,
      it must notify the Appraiser that the PACE obligation will be paid off as a
      condition of loan approval. (7) Appraisal Effective Date (a) Standard The effective
      date of the appraisal cannot be before the FHA case number assignment date unless
      the Mortgagee certifies, via the certification field in the Appraisal Logging
      Screen in FHAC, that the appraisal was ordered for conventional financing, or
      other government-guaranteed loan purposes and was performed by an FHA Roster
      Appraiser, or the previous FHA case number was canceled. The Mortgagee must
      ensure that the appraisal was performed in accordance with FHA appraisal reporting
      instructions as detailed in this Handbook 4000.1 and the Appraisal Report and
      Data Delivery Guide. The intended use of the appraisal must indicate that it
      is solely to assist FHA in assessing the risk of the Property securing the FHA-insured
      Mortgage. Additionally, FHA and the Mortgagee must be indicated as the intended
      users of the appraisal report. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 1. Origination/Processing
      Handbook 4000.1 144 Last Revised: 11/26/2025 (b) Required Documentation The
      Mortgagee must retain documentation in the case binder substantiating conversion
      of the Mortgage to FHA. (8) Transferring Existing Appraisals In cases where
      a Borrower has switched Mortgagees, the first Mortgagee must, at the Borrower’s
      request, transfer the appraisal to the second Mortgagee within five business
      days. The Appraiser is not required to provide the appraisal to the new Mortgagee.
      The client name on the appraisal does not need to reflect the new Mortgagee.
      If the original Mortgagee has not been reimbursed for the cost of the appraisal,
      the Mortgagee is not required to transfer the appraisal until it is reimbursed.
      The second Mortgagee may not request the Appraiser to readdress the appraisal.
      If the second Mortgagee finds deficiencies in the appraisal, the Mortgagee must
      order a new appraisal. Where a Mortgagee uses an existing appraisal for a different
      Borrower, the Mortgagee must enter the new Borrower’s information in FHAC prior
      to being scored by the TOTAL scorecard. The Mortgagee must collect an appraisal
      fee from the new Borrower and refund the fee to the original Borrower. If a
      Case Transfer is involved, the new Mortgagee must enter the Borrower’s information
      in FHAC. The new Mortgagee must collect an appraisal fee from the Borrower,
      and send the fee to the original Mortgagee, who, in turn, must refund the fee
      to the original Borrower. (9) Ordering Second Appraisal The Mortgagee is prohibited
      from ordering an additional appraisal to achieve an increase in value for the
      Property and/or the elimination or reduction of deficiencies and/or repairs
      required. The Mortgagee may order a second appraisal for Mortgages that are
      in accordance with requirements on Property Flipping. (a) Second Appraisal by
      Original Mortgagee A second appraisal may only be ordered if the Direct Endorsement
      (DE) underwriter (underwriter) determines the first appraisal is materially
      deficient and the Appraiser is unable or uncooperative in resolving the deficiency.
      The Mortgagee must fully document the deficiency and status of the appraisal
      in the mortgage file. The Mortgagee must pay for the second appraisal. II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward
      Mortgages 1. Origination/Processing Handbook 4000.1 145 Last Revised: 11/26/2025
      Material deficiencies on appraisals are those deficiencies that have a direct
      impact on value and marketability. Material deficiencies include, but are not
      limited to: • failure to report readily observable defects that impact the health
      and safety of the occupants and/or structural soundness of the house; • reliance
      upon outdated or dissimilar comparable sales when more recent and/or comparable
      sales were available as of the effective date of the appraisal; and • fraudulent
      statements or conclusions when the Appraiser had reason to know or should have
      known that such statements or conclusions compromise the integrity, accuracy,
      and/or thoroughness of the appraisal submitted to the client. (b) Second Appraisal
      by Second Mortgagee A second appraisal may only be ordered by the second Mortgagee
      under the following limited circumstances: • the first appraisal contains material
      deficiencies as determined by the underwriter for the second Mortgagee; • the
      Appraiser performing the first appraisal is prohibited from performing appraisals
      for the second Mortgagee; or • the first Mortgagee fails to provide a copy of
      the appraisal to the second Mortgagee in a timely manner, and the failure would
      cause a delay in closing and harm to the Borrower, including loss of interest
      rate lock, violation of sales contract deadline, occurrence of foreclosure proceedings
      and imposition of late fees. (c) Use of Second Appraisal For the first two cases
      outlined above, the Mortgagee must rely only on the second appraisal and ensure
      that copies of both appraisals are retained in the case binder. For the third
      case above, the first appraisal must be added to the case binder if it is received.
      (d) Required Documentation The Mortgagee must document why a second appraisal
      was ordered and retain the explanation and all appraisal reports in the case
      binder. (10) Ordering an Update to an Appraisal The Mortgagee may only order
      an update if (1) it is a Mortgagee listed as an intended user of the original
      appraisal or (2) it has received permission from the original client and the
      Appraiser. The Appraiser incorporates the original appraisal report being updated
      by attachment rather than by reference per Advisory Opinion 3 of USPAP. II.
      ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs
      Forward Mortgages 1. Origination/Processing Handbook 4000.1 146 Last Revised:
      11/26/2025 The Mortgagee may use an appraisal update only if: • it is performed
      by an FHA Appraiser who is currently in good standing on the FHA Appraiser Roster;
      o if a substitute Appraiser is used due to the lack of the original Appraiser
      availability, the substitute Appraiser must state they concur with the analysis
      and conclusions in the original appraisal report, and the Mortgagee must document
      in the case binder why the original Appraiser was not used; • the Property has
      not declined in value; • the building improvements that contribute value to
      the Property can be observed from the street or a public way; • the Property
      meets Minimum Property Requirements (MPR) and Minimum Property Standards (MPS)
      based on the original appraisal conditions; • the appraisal update was performed
      by the Appraiser within one year from the effective date of the initial appraisal
      being updated; and • the appraisal update is performed before the Disbursement
      Date. (11) Appraisal Delivery – Electronic Appraisal Delivery (03/14/2022) (a)
      Definition The Electronic Appraisal Delivery (EAD) is a web-based platform where
      Mortgagees or their designated technology service providers electronically deliver
      FHA Single Family appraisal reports prior to endorsement. (b) Standard Mortgagees
      or their designated technology service providers must deliver appraisals through
      FHA’s EAD portal. (c) Required Documentation Appraisals submitted through FHA’s
      EAD portal are the appraisals required for endorsement.'
  judgment: false
