source:
  type: regulation
  id: hud-4000-1-programs-and-products-new-construction
  authority: HUD Handbook 4000.1 — Programs and Products - New Construction (06/27/2025)
  description: "HUD Handbook 4000.1 section \"Programs and Products - New Construction\". Gap-fill (verbatim,\
    \ title-diff). \n"
obligations:
- id: hud-4000-1-programs-and-products-new-construction-full
  canonical_id: hud-4000-1-programs-and-products-new-construction-full
  section: HUD Handbook 4000.1
  description: "Programs and Products - New Construction: i. New Construction (06/27/2025) \ni. Definitions\
    \ [Updates to this section must be implemented for case numbers \nassigned on or after January 4,\
    \ 2021] \nNew Construction refers to Proposed Construction, Properties Under Construction, and \n\
    Properties Existing Less than One Year as defined below: \n• Exi…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 — Programs and Products - New Construction (06/27/2025)
    source_class: hud-handbook-4000-1
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: "i. New Construction (06/27/2025) \ni. Definitions [Updates to this section must\
      \ be implemented for case numbers \nassigned on or after January 4, 2021] \nNew Construction refers\
      \ to Proposed Construction, Properties Under Construction, and \nProperties Existing Less than One\
      \ Year as defined below: \n• Existing Less than One Year refers to a Property that is 100 percent\
      \ complete and \nhas been completed less than one year from the date of the issuance of the CO or\
      \ \nFHA treats the sale of an occupied Property that has been completed less than one year \nfrom\
      \ the issuance of the CO or equivalent as an existing Property. \nii. Eligible Property Types [Updates\
      \ to this section must be implemented for case \nnumbers assigned on or after January 4, 2021] \n\
      The following property types are eligible for New Construction financing: \n• Site Built Housing\
      \ (one- unit, one-unit with an Accessory Dwelling Unit (ADU), \nor two- to four-units) \n• Condominium\
      \ units in Approved Projects or Legal Phases \n• Manufactured Housing (one-unit or one-unit with\
      \ an ADU) \niii. Required Inspections for New Construction Financing [Updates to this section \n\
      must be implemented for case numbers assigned on or after January 4, 2021] \n(A) Site Built Housing\
      \ (By Construction Status at Time of Appraisal) \n(1) Proposed Construction \n• copies of the building\
      \ permit (or equivalent) and CO (or equivalent); or \n• three inspections (footing, framing and\
      \ final) performed by the local \nauthority with jurisdiction over the Property or an ICC certified\
      \ RCI or CI \n(for Modular Housing, footing and final only); or \nthree inspections (footing, framing\
      \ and final) performed by a disinterested \nthird party, who is a registered architect, a structural\
      \ engineer, or a \nqualified trades person or contractor, and has met the licensing and \nbonding\
      \ requirements of the state in which the Property is located. \n\n \n(2) Under Construction \n•\
      \ copies of the building permit (or equivalent) and CO (or equivalent); or \n• a final inspection\
      \ issued by the local authority with jurisdiction over the \nProperty or by an ICC certified RCI\
      \ or CI; or \na final inspection performed by a disinterested third party, who is a \nregistered\
      \ architect, a structural engineer, or a qualified trades person or \ncontractor, and has met the\
      \ licensing and bonding requirements of the state \nin which the Property is located. \n(3) Existing\
      \ Less than One Year \n• a final inspection issued by the local authority with jurisdiction over\
      \ the \nProperty or by an ICC certified RCI or CI; or \na final inspection performed by a disinterested\
      \ third party, who is a \nregistered architect, a structural engineer, or a qualified trades person\
      \ or \ncontractor, and has met the licensing and bonding requirements of the state \nin which the\
      \ Property is located. \n(B) Manufactured Housing (By Construction Status at Time of Appraisal)\
      \ \nInspection Requirements \n(1) Proposed Construction \n• copies of the building permit, (or equivalent)\
      \ and CO (or equivalent); or \n• two inspections (initial and final) performed by the local authority\
      \ with \njurisdiction over the Property or an ICC certified RCI or CI; or \ncertified RCI or CI,\
      \ the Mortgagee may obtain two inspections (initial and \nfinal) performed by a disinterested third\
      \ party, who is a registered \narchitect, a structural engineer, or a qualified trades person or\
      \ contractor, \nand has met the licensing and bonding requirements of the state in which \nthe Property\
      \ is located. \n(2) Under Construction \n• copies of the building permit, (or equivalent) and CO\
      \ (or equivalent); or \n• a final inspection performed by the local authority with jurisdiction\
      \ over \nthe Property or an ICC certified RCI or CI; or \ncertified RCI or CI, the Mortgagee may\
      \ obtain a final inspection \n\n \nperformed by a disinterested third party, who is a registered\
      \ architect, a \nstructural engineer, or a qualified trades person or contractor, and has met \n\
      the licensing and bonding requirements of the state in which the Property \n(3) Existing Less than\
      \ One Year \n• a final inspection performed by the local authority with jurisdiction over \nthe\
      \ Property or an ICC certified RCI or CI; or \ncertified RCI or CI, the Mortgagee may obtain a final\
      \ inspection \nperformed by a disinterested third party, who is a registered architect, a \nstructural\
      \ engineer, or a qualified trades person or contractor, and has met \nthe licensing and bonding\
      \ requirements of the state in which the Property \n(C) Units in Condominium Project or Legal Phase\
      \ (Existing Less Than One \nYear) \nThe Mortgagee must obtain a CO or its equivalent. \niv. Required\
      \ Documentation for New Construction Financing [Updates to this \nsection must be implemented for\
      \ case numbers assigned on or after \nJanuary 4, 2021] \nThe Mortgagee must obtain and include the\
      \ following documents in the case binder: \nform HUD-92541, Builder’s Certification of Plans, Specifications,\
      \ and Site; \nform HUD-92544, Warranty of Completion of Construction; \nrequired inspections, as\
      \ applicable: \n• inspections performed by an ICC certified RCI or CI or a third-party, who is a\
      \ \nregistered architect, a structural engineer, or a qualified tradesperson or \ncontractor must\
      \ be reported on form HUD-92051, Compliance Inspection \nReport, or on an appropriate state-sanctioned\
      \ inspection form; and \n• when a third party, who is a registered architect, a structural engineer,\
      \ or a \nqualified tradesperson or contractor, is relied upon for required inspections \ndue to\
      \ the absence of an ICC certified RCI or CI, a certification from such \ninspector that they are\
      \ licensed and bonded under applicable state and local \nlaws to perform the type of inspection\
      \ completed must be included; \nWood Infestation Report, unless the Property is located in a county\
      \ listed as not \nrequired on HUD’s “Termite Treatment Exception Areas” list: \no Form HUD-NPMA-99-A,\
      \ Subterranean Termite Protection Builder’s \nGuarantee, is required for all New Construction. If\
      \ the building is constructed \nwith steel, masonry or concrete building components with only minor\
      \ interior \nwood trim and roof sheathing, no treatment is needed. The Mortgagee must \n\n \nensure\
      \ that the builder notes on the form that the construction is masonry, \nsteel, or concrete. \n\
      o Form HUD-NPMA-99-B, New Construction Subterranean Termite Service \nRecord, is required when the\
      \ New Construction Property is treated with one of \nthe following: Termite Bait System, Field Applied\
      \ Wood Treatment, soil \nchemical termiticide, or Physical Barrier System is installed, as reflected\
      \ on \nform HUD-NPMA-99-A. The Mortgagee must reject the use of post \nconstruction soil treatment\
      \ when the termiticide is applied only around the \nperimeter of the foundation. \nlocal health\
      \ authority or qualified lab well water analysis; and \nseptic report, where required by the local\
      \ jurisdictional authority. \nv. Documents to be Provided to Appraiser at Assignment \nThe Mortgagee\
      \ must provide the Appraiser with a fully executed form HUD-92541, \nsigned and dated no more than\
      \ 30 Days prior to the date the appraisal was ordered. \nFor Properties 90 percent completed or\
      \ less, the Mortgagee must provide a copy of the \nfloor plan, plot plan, and any other exhibits\
      \ necessary to allow the Appraiser to determine \nthe size and level of finish of the house they\
      \ are appraising. \nFor Properties greater than 90 percent but less than 100 percent completed,\
      \ the \nMortgagee must provide the Appraiser with a list of components to be installed or \ncompleted\
      \ after the date of inspection. \nvi. Property Considerations \nNew Construction must meet HUD’s\
      \ Minimum Property Requirements (MPR) and \n \n \n\n \nvii. Mortgagee Review of Appraisal \n(A)\
      \ Site Considerations \n(1) Environmental \nThe Mortgagee must require corrective work to mitigate\
      \ any condition that arises \nduring construction that may affect the health and safety of the occupants,\
      \ the \nProperty’s ability to serve as collateral, or the structural soundness of the \n(2) Operating\
      \ Oil or Gas Wells \nIf a New Construction dwelling is located within 75 feet of an operating oil\
      \ or gas \nwell, the Mortgagee must reject the Property unless mitigation measures are \n(3) Slush\
      \ Pits \nIf a Property is Proposed Construction near an active or abandoned Slush Pit, the \nAppraiser\
      \ must require a survey to locate the pit. The Mortgagee is to assess any \nimpact on the subject\
      \ Property. \n(4) Special Airport Hazards \nIf a New Construction Property is located within Runway\
      \ Clear Zones (also \nknown as Runway Protection Zones) at civil airports or within Clear Zones\
      \ at \nmilitary airfields, the Mortgagee must reject the Property for insurance. \nProperties located\
      \ in Accident Potential Zone 1 (APZ 1) at military airfields may \nbe eligible for FHA mortgage\
      \ insurance provided that the Mortgagee determines \nthat the Property complies with Department\
      \ of Defense guidelines. \n(5) Flood Hazard Areas \nIf any portion of the dwelling and related Structures\
      \ or equipment essential to the \nProperty Value is located in a Special Flood Hazard Area (SFHA),\
      \ the Mortgagee \nmust reject the Property, unless the Mortgagee: \n• obtains a Federal Emergency\
      \ Management Agency (FEMA)-issued final \nLetter of Map Amendment (LOMA) or final Letter of Map\
      \ Revision \n(LOMR) that removes the Property from the SFHA; or \n• obtains a FEMA National Flood\
      \ Insurance Program (NFIP) Elevation \nCertificate (FEMA Form FF-206-FY-22-152) that documents that\
      \ the \nlowest floor of the residential building, including the basement, and all \nrelated Structures\
      \ or equipment essential to the Property Value are built \nabove the 100-year flood elevation in\
      \ compliance with the NFIP criteria; \n\n \n• ensures that the Elevation Certificate is completed\
      \ based on finished \nThe Mortgagee must include the LOMA, LOMR, or FEMA NFIP Elevation \nCertificate\
      \ (FEMA Form FF-206-FY-22-152) with the case when it is submitted \nThe Mortgagee must ensure that\
      \ Flood Insurance is obtained when a FEMA NFIP \nElevation Certificate (FEMA Form FF-206-FY-22-152)\
      \ documents that the \nProperty remains located within an SFHA. \n(6) Individual Water Supply Systems\
      \ (Wells) \nThe Mortgagee must ensure that new wells are drilled and are no less than 20 feet \n\
      deep and cased. Casing should be steel or other casing material that is durable, \nleak-proof, and\
      \ acceptable to either the local health authority or the trade or \nprofession licensed to drill\
      \ and repair wells in the local jurisdiction. \nA well located within the foundation walls of New\
      \ Construction is not acceptable \nexcept in arctic or subarctic regions. \nA well water test is\
      \ required for all newly constructed Properties. \nThe following tables provide the minimum distance\
      \ required between wells \nand sources of pollution: \nAbsorption field/100 feet \nSeepage pit or\
      \ cesspool/100 feet \nSewer lines with permanent water tight joints/10 feet \nOther sewer lines/50\
      \ feet \nChemically poisoned soil/25 feet (reduced to 15 feet where ground \nsurface is protected\
      \ by impervious strata of clay, hardpan or rock) \nDry well/50 feet \n\n \nOther – refer to local\
      \ health authority minimums \nThe following provides the minimum standards for Individual Water\
      \ Supply \nSystems (wells): \nIndividual Water System Minimum Property Standards for New \n24 CFR\
      \ § 200.926d(f)(1) and (2) \nWells must deliver water flow of five gallons per minute over at least\
      \ a \nfour-hour period \nThe Mortgagee must submit a valid water test from the local health authority\
      \ \nor qualified lab. \nThe report may not be more that 180 Days old from the Disbursement Date.\
      \ \n(7) Shared Well \nA Shared Well is permitted if the requirements in Shared Wells are met. \n\
      (B) Sales Comparison Approach: Comparable Selection \nFor Properties in new subdivisions, the selected\
      \ comparable sales must include at \nleast one sale outside the subdivision or project and at least\
      \ one sale from within the \nsubdivision or project. \nCompletion of Construction \nRegardless of\
      \ the inspection process used, the Mortgagee must certify on form HUD92800.5B, Conditional Commitment\
      \ Direct Endorsement Statement of Appraised Value, \nthat the Property is 100 percent complete and\
      \ meets HUD’s MPR and MPS."
    drafter_attestation: Verbatim section from snapshot 8c03836f77f317e1; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
