source:
  type: regulation
  id: hud-4000-1-programs-and-products-hecm-for-purchase
  authority: HUD Handbook 4000.1 — Programs and Products - HECM For Purchase (04/10/2025)
  description: "HUD Handbook 4000.1 section \"Programs and Products - HECM For Purchase\". Gap-fill (verbatim,\
    \ title-diff). \n"
obligations:
- id: hud-4000-1-programs-and-products-hecm-for-purchase-full
  canonical_id: hud-4000-1-programs-and-products-hecm-for-purchase-full
  section: HUD Handbook 4000.1
  description: "Programs and Products - HECM For Purchase: 8. Programs and Products \na. HECM For Purchase\
    \ (04/10/2025) \nThe HECM for Purchase program was designed to allow Borrowers to finance a new \n\
    Principal Residence and obtain a HECM within a single transaction. Title to the Property \nmust be\
    \ transferred to the Borrower and the first and, if applicable,…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 — Programs and Products - HECM For Purchase (04/10/2025)
    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: "8. Programs and Products \na. HECM For Purchase (04/10/2025) \nThe HECM for Purchase\
      \ program was designed to allow Borrowers to finance a new \nPrincipal Residence and obtain a HECM\
      \ within a single transaction. Title to the Property \nmust be transferred to the Borrower and the\
      \ first and, if applicable, second liens are the only \nliens against the Property at the time of\
      \ closing. \nHECMs to be insured under the HECM for Purchase program must be processed and \nunderwritten\
      \ in accordance with the requirements in Origination through Postclosing/Endorsement, except where\
      \ noted otherwise in this section. \nHECM for Purchase refers to a transaction where the Borrower\
      \ uses the HECM to \nfinance the purchase of an existing one- to four-unit residence where the Borrower\
      \ will \noccupy one unit as their Principal Residence. \nExisting Construction refers to a Property\
      \ that has been 100 percent complete for over \none year or has been completed for less than one\
      \ year and was previously occupied. \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 \nii. Initial Application Processing\
      \ \nThe Mortgagee may take initial application either before or after the completion of \nHECM counseling.\
      \ \niii. Principal Residence Requirements \nHECM Borrowers may have only one Principal Residence\
      \ at any one time. Current \nBorrowers that plan to sell their existing residence and use the HECM\
      \ for Purchase \nprogram to obtain a new Principal Residence must pay off the existing HECM before\
      \ the \nHECM for Purchase transaction can be insured. \nBorrowers and Eligible NBSs, if applicable,\
      \ must occupy the Property within 60 Days \nfrom the date of closing. \n\n \niv. Initial Mortgage\
      \ Insurance Premium Amount \nThe Initial Mortgage Insurance Premium (IMIP) must be financed or paid\
      \ in cash. Any \nIMIP amount paid in cash is added to the total cash requirements due at closing.\
      \ \nv. Maximum Claim Amount \nThe Maximum Claim Amount (MCA) is the lesser of the: \n• appraised\
      \ value as determined by the Collateral Risk Assessment; \n• national mortgage limit; or \n• sales\
      \ contract price. \nThe Mortgagee must determine the MCA at origination. When the collateral risk\
      \ \nassessment determines that a second appraisal is required, the Mortgagee must use the \nlower\
      \ of the two appraised values. The IMIP must not be taken into account in the \ncalculation of the\
      \ MCA. Closing costs must not be taken into account in determining \nthe appraised value. \nvi.\
      \ Property Eligibility and Acceptability Criteria \n(A) Types of Eligible Properties \nThe Borrower\
      \ may finance the purchase of a one- to four-unit residence that will be \nused as their Principal\
      \ Residence. The Property may be Existing Construction or New \nConstruction. The following property\
      \ types are eligible for HECM financing: \n• Site Built Housing (one- to four-units, one-unit with\
      \ an Accessory Dwelling \nUnit (ADU), or two- to four-units); \n• Condominium units in Approved\
      \ Projects or Legal Phases; and \n• Manufactured Housing (one-unit or one-unit with an ADU). \n\
      Properties previously acquired through a contract for deed, land contract, or other \nsimilar arrangements\
      \ must be treated as a purchase transaction when HECM funds \nwill be used to satisfy outstanding\
      \ payment obligations. \nFor Condominium Units seeking Single-Unit Approval, see Property Eligibility\
      \ in \nFHA treats the sale of an occupied Property that has been completed less than one \nyear\
      \ from the issuance of the CO or equivalent as an Existing Construction Property. \n\n \n(B) Construction\
      \ and Inspection Requirements for New Construction HECM \nMortgagees must ensure New Construction\
      \ HECM Properties are inspected to ensure \ncompliance with FHA’s MPS and MPR. The construction\
      \ status at the time of \nappraisal will determine the inspections that must be completed. \n(1)\
      \ Site Built Housing \n(a) Proposed Construction \nFor Properties in the Proposed Construction status\
      \ at time of appraisal, the \n• three inspections (footing, framing, and final) performed by the\
      \ local \nauthority with jurisdiction over the Property or an ICC certified RCI or \nCI (for Modular\
      \ Housing, footing and final only); or \nobtain three inspections (footing, framing, and final)\
      \ performed by a \ndisinterested third party, who is a registered architect, a structural \nengineer,\
      \ or a qualified trades person or contractor, and has met the \nlicensing and bonding requirements\
      \ of the state in which the Property \n(b) Under Construction \nFor Properties in the Under Construction\
      \ status at time of appraisal, the \n• a final inspection issued by the local authority with jurisdiction\
      \ over \nthe Property or by an ICC certified RCI or CI; or \nobtain a final inspection performed\
      \ by a disinterested third party, who \nis a registered architect, a structural engineer, or a qualified\
      \ trades \nperson or contractor, and has met the licensing and bonding \nrequirements of the state\
      \ in which the Property is located. \n(c) Existing Less than One Year \nFor Properties in the Existing\
      \ Less than One Year status at time of appraisal, \nthe Mortgagee must obtain one of the following\
      \ prior to closing and provide \nthe applicable documentation in the case binder: \n\n \n• a final\
      \ inspection issued by the local authority with jurisdiction over \nthe Property or by an ICC certified\
      \ RCI or CI; or \nobtain a final inspection performed by a disinterested third-party, who \nis a\
      \ registered architect, a structural engineer, or a qualified trades \nperson or contractor, and\
      \ has met the licensing and bonding \nrequirements of the State in which the property is located.\
      \ \n(2) Manufactured Housing \n(a) Proposed Construction \nFor Properties in the Proposed Construction\
      \ status at time of appraisal, the \n• two inspections (initial and final) performed by the local\
      \ authority with \njurisdiction over the Property or an ICC certified RCI or CI; or \nICC certified\
      \ RCI or CI, the Mortgagee may obtain two inspections \n(initial and final) performed by a disinterested\
      \ third party, who is a \nregistered architect, a structural engineer, or a qualified trades person\
      \ \nor contractor, and has met the licensing and bonding requirements of \nthe state in which the\
      \ Property is located. \n(b) Under Construction \nFor Properties in the Under Construction status\
      \ at time of appraisal, the \n• a final inspection performed by the local authority with jurisdiction\
      \ \nover the Property or an ICC certified RCI or CI; or \nICC certified RCI or CI, the Mortgagee\
      \ may obtain a final inspection \nperformed by a disinterested third party, who is a registered\
      \ architect, \na structural engineer, or a qualified trades person or contractor, and has \nmet\
      \ the licensing and bonding requirements of the state in which the \nProperty is located. \n\n \n\
      (c) Existing Less than One Year \nFor Properties in the Existing Less than One Year status at time\
      \ of appraisal, \nthe Mortgagee must obtain one of the following prior to closing and provide \n\
      the applicable documentation in the case binder: \n• a final inspection performed by the local authority\
      \ with jurisdiction \nover the Property or an ICC certified RCI or CI; or \nICC certified RCI or\
      \ CI, the Mortgagee may obtain a final inspection \nperformed by a disinterested third-party, who\
      \ is a registered architect, \na structural engineer, or a qualified trades person or contractor,\
      \ and has \nmet the licensing and bonding requirements of the State in which the \nproperty is located.\
      \ \n(3) Units in Condominium Project or Legal Phase (Existing Less Than One \nYear) \nThe Mortgagee\
      \ must obtain a CO or its equivalent. \n(4) Required Documentation for New Construction Properties\
      \ \nThe Mortgagee must obtain and include the following documents in the case \nbinder: \n• form\
      \ HUD-92541, Builder’s Certification of Plans, Specifications, and \nSite; \n• form HUD-92544, Warranty\
      \ of Completion of Construction; \n• a copy of the CO (or equivalent), if applicable; \n• required\
      \ inspections, as applicable: \n• inspections performed by an ICC certified RCI or CI or a third-party,\
      \ \nwho is a registered architect, a structural engineer, or a qualified trades \nperson or contractor\
      \ must be reported on form HUD-92051, \nCompliance Inspection Report, or on an appropriate state-sanctioned\
      \ \ninspection form; and \n• when a third party, who is a registered architect, a structural engineer,\
      \ \nor a qualified tradesperson or contractor, is relied upon for required \ninspections due to\
      \ the absence of an ICC certified RCI or CI, a \ncertification from such inspector that they are\
      \ licensed and bonded \nunder applicable state and local laws to perform the type of inspection\
      \ \ncompleted must be included; \n• a Wood Infestation Report, unless the Property is located in\
      \ a county listed \nas not required on HUD’s “Termite Treatment Exception Areas” list: \n• form\
      \ HUD-NPMA-99-A, Subterranean Termite Protection Builder’s \nGuarantee, is required for all New\
      \ Construction. If the building is \nconstructed with steel, masonry, or concrete building components\
      \ with \nonly minor interior wood trim and roof sheathing, no treatment is \n\n \nneeded. The Mortgagee\
      \ must ensure that the builder notes on the form \nthat the construction is masonry, steel, or concrete.\
      \ \n• form HUD-NPMA-99-B, New Construction Subterranean Termite \nService Record, is required when\
      \ the New Construction Property is \ntreated with one of the following: Termite Bait System, Field\
      \ Applied \nWood Treatment, soil chemical termiticide, or Physical Barrier System \nis installed,\
      \ as reflected on form HUD-NPMA-99-A. The Mortgagee \nmust reject the use of post construction soil\
      \ treatment when the \ntermiticide is applied only around the perimeter of the foundation; and \n\
      • local Health Authority well water analysis and/or septic report, where \nrequired by the local\
      \ jurisdictional authority. \n(C) 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 \nthe floor plan, plot plan, and any other exhibits\
      \ necessary to allow the Appraiser to \ndetermine the 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. \n(D) Property Considerations \nNew Construction must meet HUD’s\
      \ Minimum Property Requirements (MPR) and \n(E) Mortgagee Review of Appraisal \n(1) Site Considerations\
      \ \n(a) Environmental \nThe Mortgagee must require corrective work to mitigate any condition that\
      \ \narises during construction that may affect the health and safety of the \noccupants, the Property’s\
      \ ability to serve as collateral, or the structural \nsoundness of the improvements. \n(b) Operating\
      \ Oil or Gas Wells \nIf a New Construction dwelling is located within 75 feet of an operating oil\
      \ or \ngas well, the Mortgagee must reject the Property unless mitigation measures \nare completed.\
      \ \n\n \n(c) Slush Pits \nIf a Property is Proposed Construction near an active or abandoned Slush\
      \ Pit, \nthe Appraiser must require a survey to locate the pit. The Mortgagee is to \nassess any\
      \ impact on the subject Property. \n(d) 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 \nmay be eligible\
      \ for FHA mortgage insurance provided that the Mortgagee \ndetermines that the Property complies\
      \ with Department of Defense guidelines. \n(e) Flood Hazard Areas \nIf any portion of the dwelling\
      \ and related Structures or equipment essential to \nthe Property Value is located in a Special\
      \ Flood Hazard Area (SFHA), the \nMortgagee must reject the Property, unless the Mortgagee: \n•\
      \ obtains a Federal Emergency Management Agency (FEMA)-issued \nfinal Letter of Map Amendment (LOMA)\
      \ or final Letter of Map \nRevision (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 \nbuilt at or above\
      \ the 100-year flood elevation in compliance with the \nNFIP criteria; and \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 \n\
      submitted for endorsement. \nThe Mortgagee must ensure that Flood Insurance is obtained when a FEMA\
      \ \nNFIP Elevation Certificate (FEMA Form FF-206-FY-22-152) documents that \nthe Property remains\
      \ located within an SFHA. \n(f) Individual Water Supply Systems (Wells) \nThe Mortgagee must ensure\
      \ that new wells are drilled and are no less than 20 \nfeet deep and cased. Casing should be steel\
      \ or other casing material that is \ndurable, leak-proof, and acceptable to either the local health\
      \ authority or the \ntrade or profession licensed to drill and repair wells in the local jurisdiction.\
      \ \n\n \nA well located within the foundation walls of New Construction is not \nacceptable except\
      \ in arctic or subarctic regions. \nA well water test is required for all newly constructed Properties.\
      \ \nthe Borrower/owner or other Interested Party collect and/or transport the \nThe following tables\
      \ provide the minimum distance required between \nwells and 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 \nOther\
      \ – refer to local health authority minimums \n* distance requirements of local authority prevail\
      \ if greater than stated \nabove \nThe following provides the minimum standards for Individual Water\
      \ \nSupply Systems (wells): \nIndividual Water System Minimum Property Standards for New \n24 CFR\
      \ § 200.926d(f)(1) and (2) \nIf no local chemical and bacteriological water standards, state \n\
      standards apply \nWells must deliver water flow of five gallons per minute over at least \na four-hour\
      \ period \n\n \nThe Mortgagee must submit a valid water test from the local health \nauthority or\
      \ qualified lab. \nThe report may not be more that 180 Days old from the Disbursement \n(g) Shared\
      \ Well \nShared Well refers to a well that services two to four homes where there is \na binding\
      \ Shared Well Agreement between the property owners that meets \nFHA requirements. \nA Shared Well\
      \ is permitted if the requirements in Shared Wells are met. \n(F) 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. \n(G) Seller Must Be Owner of Record \nTo be eligible for a HECM insured by FHA, a\
      \ Property must be purchased from \nthe owner of record. The transaction may not involve any sale\
      \ or assignment of \nthe sales contract. \nThe Mortgagee must obtain documentation verifying that\
      \ the seller is the owner \nof record. \nSuch documentation may include, but is not limited to:\
      \ \n• a property sales history report; \n• a copy of the recorded deed from the seller; or \n• other\
      \ documentation, such as a copy of a property tax bill, title \ncommitment, or binder demonstrating\
      \ the seller’s ownership of the \nProperty and the date it was acquired. \n\n \n(H) Restrictions\
      \ on Property Flipping \nProperty Flipping is indicative of a practice whereby recently acquired\
      \ Property is \nresold for a considerable profit with an artificially inflated value. \nProperty\
      \ Flipping refers to the purchase and subsequent resale of a Property in a \nshort period of time.\
      \ \nSeller’s Date of Acquisition refers to the date the seller acquired legal ownership \nof that\
      \ Property. \nResale Date refers to the date all parties have executed the sales contract that will\
      \ \nresult in the FHA-insured HECM for the resale of the Property. \n(a) Time Restriction on Transfers\
      \ of Title \nThe eligibility of a Property for a HECM insured by FHA is determined by the \ntime\
      \ that has elapsed between the date the seller has acquired title to the \nProperty and the resale\
      \ date. \n(b) Restriction on Resales Occurring 90 Days or Fewer after Acquisition \nA Property that\
      \ is being resold 90 Days or fewer following the seller’s date of \nacquisition is not eligible\
      \ for an FHA-insured HECM. \n(c) Exceptions to Time Restrictions on Resale \nExceptions to the 90-Day\
      \ resale restriction are: \n• Properties acquired by an employer or relocation agency in connection\
      \ \nwith the relocation of an employee; \n• resales by HUD under its REO program; \n• sales by other\
      \ U.S. government agencies of Single Family Properties \npursuant to programs operated by these\
      \ agencies; \n• sales of Properties by nonprofits approved to purchase HUD-owned \nSingle Family\
      \ Properties at a discount with resale restrictions; \n• sales of Properties that are acquired by\
      \ the seller by inheritance; \n• sales of Properties by state and federally chartered financial\
      \ \ninstitutions and Government-Sponsored Enterprises (GSEs); \n• sales of Properties by local and\
      \ state government agencies; and \n• sales of Properties within Presidentially-Declared Major Disaster\
      \ \nAreas (PDMDA), only upon issuance of a notice of an exception from \n\n \nThe restrictions listed\
      \ above and those in 24 CFR § 206.52(b) do not apply to \na builder selling a newly built house\
      \ or building a house for a Borrower \nplanning to use FHA-insured financing. \nThe Mortgagee must\
      \ obtain a 12-month chain of title documenting compliance \nwith time restrictions on resales. \n\
      vii. Completion 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. \nMinimum Required\
      \ Repairs \nFor HECM for Purchase transactions, the seller must complete all repairs necessary to:\
      \ \n• maintain the safety, security, and soundness of the Property; \n• preserve the continued marketability\
      \ of the Property; and \n• protect the health and safety of the occupants. \nThe Appraiser must\
      \ complete the appraisal as “Subject To” the completion of all required \nrepairs. \nix. Sales Contract\
      \ and Supporting Documentation \nThe Mortgagee must not originate an insured HECM for the purchase\
      \ of a Property if \nany provision of the sales contract violates FHA requirements. \nThe Mortgagee\
      \ must ensure that (1) all purchasers listed on the sales contract are \nBorrowers, and (2) only\
      \ those Borrowers may sign the sales contract. The Mortgagee \nmay also list a Non-Borrowing Spouse\
      \ (NBS) on the sales contract, but the NBS is \nnot required to sign the sales contract. \nAn addendum\
      \ or modification may be used to remove or correct any provisions of the \nsales contract that do\
      \ not conform to these requirements. \n(1) Amendatory Clause \nIf the Borrower does not receive\
      \ form HUD-92800.5B before signing the sales \ncontract, the sales contract must include or be amended\
      \ before closing to include \nan amendatory clause that contains the following language: \n\n \n\
      “It is expressly agreed that notwithstanding any other provisions of this contract, \nthe purchaser\
      \ shall not be obligated to complete the purchase of the property \ndescribed herein or to incur\
      \ any penalty by forfeiture of earnest money deposits or \notherwise, unless the purchaser has been\
      \ given, in accordance with HUD/FHA or \nVA requirements, a written statement by the Federal Housing\
      \ Commissioner, \nDepartment of Veterans Affairs, or a Direct Endorsement lender setting forth the\
      \ \nappraised value of the property of not less than $___________*. The purchaser \nshall have the\
      \ privilege and option of proceeding with consummation of the \ncontract without regard to the amount\
      \ of the appraised valuation. The appraised \nvaluation is arrived at to determine the maximum mortgage\
      \ the Department of \nHousing and Urban Development will insure. HUD does not warrant the value\
      \ or \ncondition of the property. The purchaser should satisfy himself/herself that the \nprice\
      \ and condition of the property are acceptable.” \nMortgagees must ensure the actual dollar amount\
      \ of the sales price stated in the \ncontract has been inserted in the amendatory clause. Increases\
      \ to the sales price \nrequire a revised amendatory clause. \nAn amendatory clause is not required\
      \ in connection with: \n• HUD Real Estate Owned (REO) sales; or \n• Fannie Mae; \n• Freddie Mac;\
      \ \n• U.S. Department of Veterans Affairs (VA); \n• United States Department of Agriculture (USDA)\
      \ Rural Housing \nServices; \n• other federal, state, and local government agencies; \n• a Mortgagee\
      \ disposing of REO assets; or \n• a seller at a foreclosure sale. \n(2) Real Estate Certification\
      \ \nThe Borrower, seller, and real estate agent or broker involved in the sales \ntransaction must\
      \ certify, to the best of their knowledge and belief, that (1) the \nterms and conditions of the\
      \ sales contract are true and (2) any other agreement \nentered into by any parties in connection\
      \ with the real estate transaction is part of, \nor attached to, the sales agreement. \nA separate\
      \ certification is not needed if the sales contract contains a statement that \n(1) there are no\
      \ other agreements between parties and the terms constitute the \nentire agreement between the parties,\
      \ and (2) all parties are signatories to the sales \ncontract submitted at the time the financial\
      \ assessment is performed. \n\n \n(3) Property Assessed Clean Energy \nWhere the subject Property\
      \ is encumbered with a Property Assessed Clean \nEnergy (PACE) obligation, the sales contract must\
      \ include a clause specifying \nthat the PACE obligation will be satisfied by the seller at, or\
      \ prior to, closing. \nThe Mortgagee must obtain all signed copies of sales contract(s), including\
      \ a \ncomplete copy of the final sales contract with any modifications or revisions agreed \nupon\
      \ by the Borrower and seller. \nThe documentation must also include the amendatory clause executed\
      \ by all parties, \nReal Estate Certification executed by all parties, and all other contract addenda.\
      \ \n(C) Ordering a Second Appraisal \nThe Mortgagee is prohibited from ordering an additional appraisal\
      \ to achieve an increase \nin value for the Property and/or the elimination or reduction of deficiencies\
      \ and/or repairs \nThe Mortgagee may order a second appraisal for transactions that are in accordance\
      \ \nwith requirements on Property Flipping. \nx. HUD Required Disclosures \n(A) Lead-Based Paint\
      \ \nIf the Property was built before 1978, the seller must disclose any information known \nabout\
      \ lead-based paint and lead-based paint hazards before selling the house, in \naccordance with the\
      \ HUD-EPA Lead Disclosure Rule (24 CFR 35, subpart A, and the \nidentical 40 CFR 745, subpart F).\
      \ For such Properties, the Mortgagee must ensure \n• the Borrower has been provided the EPA-approved\
      \ information pamphlet on \nidentifying and controlling lead-based paint hazards (“Protect Your\
      \ Family \nfrom Lead in Your Home”); \n• the Borrower was given a 10-Day period before becoming\
      \ obligated to \npurchase the home to conduct a lead-based paint inspection or risk assessment \n\
      to determine the presence of lead-based paint or lead-based paint hazards, or \nthe Borrower waived\
      \ the opportunity; \n• the sales contract contains an attachment in the language of the contract\
      \ (e.g., \nEnglish, Spanish) signed and dated by both the seller and purchaser: \n• containing a\
      \ lead warning statement as set forth in 24 CFR § 35.92(a)(1); \n• providing the seller’s disclosure\
      \ of the presence of any known lead-based \npaint and/or lead-based paint hazards in the target\
      \ housing being sold, or \nindication of no knowledge of such presence; \n\n \n• listing any records\
      \ or reports available to the seller pertaining to leadbased paint and/or lead-based paint hazards\
      \ in property housing being \nsold, or indication by the seller that no such records or reports\
      \ exist; and \n• affirming that the Borrower received the pamphlet, disclosure, and records \nor\
      \ reports above; and \n• when any agent is involved in the transaction on behalf of the seller,\
      \ the sales \ncontract includes a statement that the agent has informed the seller of the \nseller’s\
      \ Lead Disclosure Rule obligations, and the agent is aware of their duty \nto ensure compliance\
      \ with the requirements of the Rule, and the agent has \nsigned and dated the contract. \n(B) Form\
      \ HUD-92564-CN, For Your Protection: Get A Home Inspection \nMortgagees are required to provide\
      \ form HUD-92564-CN, For Your Protection: Get \na Home Inspection, to prospective homebuyers at\
      \ initial application. \nxi. Underwriting the Property \n(A) Required Repairs \nWhere major property\
      \ deficiencies threaten the health and safety of the homeowner \nand/or jeopardize the soundness\
      \ and security of the Property, all repairs must be \ncompleted by the seller prior to closing.\
      \ A Repair Set-Aside is not permitted. \n(B) Chain of Title \nThe Mortgagee must review the appraisal\
      \ to determine if the subject Property was \nsold within 12 months prior to the case number assignment\
      \ date. If the subject \nProperty was sold within the previous 12 months, the Mortgagee must review\
      \ \nevidence of prior ownership and for compliance with Restrictions on Property \nFlipping. \n\
      xii. Performing the Financial Assessment \n(A) Credit History Requirements \n(1) Types of Credit\
      \ History \nIf a traditional credit report is available, the Mortgagee must use a traditional \n\
      credit report. \nIf a traditional credit report is not available, the Mortgagee must develop the\
      \ \nBorrower’s credit history using the requirements for non-traditional and \ninsufficient credit.\
      \ \n\n \n(a) Non-Traditional Credit Requirements \nFor Borrowers without a credit score, the Mortgagee\
      \ must either obtain a \nNon-Traditional Mortgage Credit Report (NTMCR) from a credit reporting\
      \ \ncompany or independently develop the Borrower’s credit history using the \nrequirements outlined\
      \ below. \n(b) Non-Traditional Mortgage Credit Report \nA Non-Traditional Mortgage Credit Report\
      \ (NTMCR) is designed to \naccess the credit history of a Borrower who does not have the types of\
      \ \ntrade references that appear on a traditional credit report and is used either \nas: \n• a substitute\
      \ for a Tri-Merged Credit Report (TRMCR) or a \nResidential Mortgage Credit Report (RMCR); or \n\
      • a supplement to a traditional credit report that has an insufficient \nnumber of trade items reported\
      \ to generate a credit score. \nMortgagees may use an NTMCR developed by a credit reporting agency\
      \ \nthat verifies the following information for all non-traditional credit \nreferences: \n• the\
      \ existence of the credit providers; \n• that the credit was actually extended to the Borrower;\
      \ and \n• the creditor has a published address or telephone number. \nThe NTMCR must not include\
      \ subjective statements such as “satisfactory” \nor “acceptable,” must be formatted in a similar\
      \ fashion to traditional \nreferences, and provide: \n• creditor’s name; \n• date of opening; \n\
      • high credit; \n• current status of the account; \n• 12-month history of the account; \n• required\
      \ monthly payment; \n• unpaid balance; and \n• payment history in the delinquency categories (for\
      \ example, 0x30 \nand 0x60). \n\n \n(iii)Independent Verification of Non-Traditional Credit \nThe\
      \ Mortgagee may independently verify the Borrower’s credit references \nby documenting the existence\
      \ of the credit provider and that the provider \nextended credit to the Borrower. \n• To verify\
      \ the existence of each credit provider, the Mortgagee \nmust review public records from the state,\
      \ county, or city or other \ndocuments providing a similar level of objective information. \n• To\
      \ verify credit information, the Mortgagee must: \n• use a published address or telephone number\
      \ for the credit \nprovider and not rely solely on information provided by the \n• obtain the most\
      \ recent 12 months of canceled checks, or \nequivalent proof of payment, demonstrating the timing\
      \ of \npayment to the credit provider. \n• To verify the Borrower’s rental payment history, the\
      \ Mortgagee \nmust obtain a rental reference from the appropriate rental \nmanagement company, provided\
      \ the Borrower is not renting from \na Family Member, demonstrating the timing of payment of the\
      \ \nmost recent 12 months in lieu of 12 months of canceled checks or \nequivalent proof of payment.\
      \ \n(iv) Sufficiency of Credit References \nTo be sufficient to establish the Borrower’s credit,\
      \ the credit history must \ninclude three credit references. The Borrower’s credit history must\
      \ include \nat least one of the following: \n• gas; \n• electricity; \n• water; \n• television service;\
      \ or \n• internet service. \nIf the Mortgagee cannot obtain all three credit references from the\
      \ list \nabove, the Mortgagee may use the following sources of unreported \nrecurring debt to obtain\
      \ the remaining one or two credit references needed: \n• insurance premiums not payroll deducted\
      \ (for example, medical, \nauto, life, or renter’s insurance); \n• payment to child care providers\
      \ made to businesses that provide \nsuch services; \n\n \n• retail store credit cards (for example,\
      \ from department, furniture, \nappliance stores, or specialty stores); \n• rent-to-own (for example,\
      \ furniture, appliances); \n• were made at least quarterly; \n• were not payroll deducted; and \n\
      • caused no Insufficient Funds (NSF) checks; \n(2) Bankruptcy \n(a) Chapter 7 \nconsideration for\
      \ a HECM for Purchase if, at the time of case number \nassignment, at least two years have elapsed\
      \ since the date of the bankruptcy \ndischarge. During the most recent two years, the Borrower must\
      \ have: \n• reestablished good credit; or \n• can show that the bankruptcy was caused by Extenuating\
      \ \nCircumstances beyond the Borrower’s control; and \n(b) Chapter 13 \nA Chapter 13 bankruptcy\
      \ does not disqualify a Borrower from consideration \nfor a HECM for Purchase, if at the time of\
      \ case number assignment, the \nbankruptcy has been discharged or at least 12 months of the payout\
      \ period \nunder the bankruptcy has elapsed. \nIf the bankruptcy has not been discharged, the Mortgagee\
      \ must determine that, \nduring the most recent 12 months, the Borrower’s payment performance has\
      \ \nbeen satisfactory, all required payments have been made on time, and the \nBorrower has received\
      \ written permission from the bankruptcy court to enter \ninto the mortgage transaction. \n\n \n\
      The Mortgagee must include the payment amount in the court-approved \npayment plan in the Borrower’s\
      \ expenses when calculating Residual Income. \nthe bankruptcy, the Mortgagee must obtain the bankruptcy\
      \ and discharge \nThe Mortgagee must also document that the Borrower’s current situation \nindicates\
      \ that the events that led to the bankruptcy are not likely to recur. \n(B) Other Sources of Effective\
      \ Income \nBoarders of the Subject Property \nThe Mortgagee must obtain a copy of the executed written\
      \ agreement documenting \nthe intent of the Boarders to continue boarding with the Borrower. \n\
      (C) Asset Requirements – Acceptable Sources of Funds \n(1) Earnest Money Deposit \nThe Mortgagee\
      \ must verify and document the deposit amount and source of funds \nif the amount of the earnest\
      \ money deposit exceeds 1 percent of the sales price or \nis excessive based on the Borrower’s history\
      \ of accumulating savings, by \nobtaining: \n• a Verification of Deposit (VOD) or bank statement\
      \ showing that the \naverage balance was sufficient to cover the amount of the earnest money \n\
      deposit at the time of the deposit; or \n• direct verification by a Third Party Verification (TPV)\
      \ vendor, subject to \n• the Borrower has authorized the Mortgagee to verify assets; \n• the date\
      \ of the completed verification conforms with FHA \nrequirements in Maximum Age of HECM Documents;\
      \ and \n• the information shows that the average balance was sufficient to cover \nthe amount of\
      \ the earnest money deposit at the time of the deposit. \nIf the source of the earnest money deposit\
      \ was a Gift, the Mortgagee must verify \nthat the Gift is in compliance with Standards for Gifts.\
      \ \n\n \n(2) Monetary Investment \nMonetary Investment refers to the amount Borrowers must provide\
      \ to satisfy \nthe difference between the Principal Limit and the sale price for the Property, \n\
      plus any HECM-related fees that are not financed into the HECM, minus the \namount of the earnest\
      \ deposit. \n(b) Source Requirements for the Borrower’s Monetary Investment \n(i) Acceptable Monetary\
      \ Investment Funding Sources \nTo satisfy the required monetary investment, Borrowers may use: \n\
      • Cash on Hand; \n• cash from the sale or liquidation of the Borrower’s assets; \n• HECM proceeds;\
      \ \n• Interested Party Contributions; and \n• other Acceptable Sources of Funds. \nA Family Member\
      \ entitled to the commission may also provide it as a \nGift, in compliance with standard gift requirements.\
      \ \nA Borrower who also serves as the licensed real estate agent on a HECM \nfor Purchase transaction\
      \ may use the real estate commission to satisfy the \nrequired monetary investment. \nThe Borrower\
      \ may choose to provide a larger investment amount in order \nto retain a portion of the available\
      \ HECM proceeds for future draws. \n(ii) Unacceptable Monetary Investment Funding Sources \nThe\
      \ Borrower may not use the following funding sources to satisfy the \nrequired monetary investment:\
      \ \n• Sweat Equity; \n• Trade Equity; \n• rent credit; or \n• Premium Pricing. \nThe Mortgagee must\
      \ document that the Borrower’s monetary investment \nis from an acceptable monetary investment funding\
      \ source and there will \nbe no outstanding or unpaid obligations incurred by the Borrower in \n\
      connection with the HECM for Purchase transaction. \n\n \nThe Mortgagee must verify and document\
      \ that the Borrower, or Family \nMember giving the commission as a Gift, is a licensed real estate\
      \ agent, \nand is entitled to a Real Estate Commission from the Sale of the Subject \n(3) Interested\
      \ Party Contributions \nMortgagees, Third-Party Originators (TPO), or other parties with an interest\
      \ in \nthe transaction. \nInterested Party Contribution refers to a payment by an Interested Party\
      \ or \ncombination of parties, toward the Borrower’s loan origination fees, other \nclosing costs\
      \ including any items Paid Outside Closing (POC), and prepaid \nitems. \nInterested Parties, excluding\
      \ Mortgagees and TPOs, may contribute up to 6 \npercent of the sales price toward the following\
      \ items: \n• loan origination fees; \n• other closing costs; \n• prepaid items; and \n• payment\
      \ of the IMIP. \nNo other items may be paid for by an Interested Party. \nMortgagees and TPOs are\
      \ prohibited from making any Interested Party \nFees required to be paid by a seller under state\
      \ or local law or customarily \npaid by a seller in the subject property locality, including real\
      \ estate agent \ncommissions or fees, and the purchase of the Home Warranty policy by the \nseller\
      \ are already permitted under 24 CFR § 206.44(c)(1) and will be excluded \nfrom the six percent\
      \ interested party contribution limit. \nMortgagees may pay for services performed by a sponsored\
      \ TPO if allowed \nunder the Loan Origination Fee Calculation requirements. \nThe satisfaction of\
      \ a PACE lien or obligation against the Property by the \nproperty owner is not considered an Interested\
      \ Party Contribution. \n\n \nThe Mortgagee must accurately document the total amount of Interested\
      \ Party \nContributions on the HUD-1 Settlement Statement, and reflected on the sales \ncontract\
      \ or applicable legally binding document. When a legally binding \ndocument other than the sales\
      \ contract is used to document the Interested \nParty Contributions, the Mortgagee must provide\
      \ a copy of this document to \nthe assigned Appraiser. \n(A) HUD-1 Addendum Closing Certifications\
      \ \nThe Mortgagee must obtain the final HUD-1 Settlement Statement or similar legal \ndocument from\
      \ the settlement agent. If the seller’s HUD-1 Settlement Statement or \nsimilar legal document is\
      \ provided separately, the Mortgagee must obtain from the \nClosing Agent a copy of the final disclosure\
      \ provided to the seller to keep in the case \n(B) Seller Certification \nThe seller must sign the\
      \ certification to the Addendum to HUD-1 Settlement \nStatement. \n(C) Inspection and Repair Requirements\
      \ for HECMs Pending Closing in \nFor HECM for Purchase transactions that have not closed, repairs\
      \ must be completed \nprior to closing and the cost of repairs is the responsibility of the seller.\
      \ \n(D) Closing Costs and Fees \n(1) Mandatory Obligations \nThe Mortgagee may use HECM proceeds\
      \ to satisfy the Borrower’s Mandatory \nObligations. \nMandatory Obligations include: \n• IMIP;\
      \ \n• loan origination fee; \n• HECM counseling fee; \n• reasonable and customary amounts, but not\
      \ more than the amount actually \npaid by the Mortgagee for any of the following items: \n• recording\
      \ fees and recording taxes or other charges incident to the \nrecordation of the insured HECM; \n\
      • credit report; \n• survey, if required by the Mortgagee or the Borrower; \n\n \n• title examination;\
      \ \n• Mortgagee’s title insurance; and \n• fees paid to an Appraiser for the initial appraisal of\
      \ the Property; \n• delinquent Federal Debt; \n• fees and charges for real estate sales contracts,\
      \ warranties, inspections, \nsurveys, and engineer certifications; \n• the total amount of property\
      \ tax and Flood and Hazard Insurance charges \nscheduled for payment during the First 12-Month Disbursement\
      \ Period \nfrom a Fully Funded LESA. Mortgagees must use the actual insurance \npremium and actual\
      \ tax amount; \n• property tax and Flood and Hazard Insurance payments required by the \nMortgagee\
      \ to be paid at closing; \n• the amount of the principal that is advanced toward the purchase price\
      \ of \nthe subject Property; \n• other charges as authorized by the Secretary; and \n• for adjustable\
      \ rate HECMs: \n• the total amount of property charge payments scheduled for payment \nthrough the\
      \ optional Borrower authorized option during the First 12Month Disbursement Period; and \n• the\
      \ total amount of semiannual Disbursements scheduled to be made \nduring the First 12-Month Disbursement\
      \ Period to the Borrower from \na Partially Funded LESA. \n(2) Property Assessed Clean Energy \n\
      The PACE obligation must be paid off in full by the seller prior to or at closing. \n(3) Discount\
      \ Points and Interest Rate Buydowns \nThe Mortgagee may not charge Discount Points. \nTemporary\
      \ and permanent interest rate buydowns are not permitted. \n(4) Interested Party Contributions on\
      \ the HUD-1 Settlement Statement \nThe Mortgagee may apply permissible Interested Party Contributions\
      \ toward the \nBorrower’s closing costs and other fees required to obtain a HECM. \nThe Mortgagee\
      \ must identify the total Interested Party Contributions on the front \npage of the HUD-1 Settlement\
      \ Statement or similar legal document or in an \naddendum, and on Exhibit 2 – Schedule of Closing\
      \ Costs. The Mortgagee must \nidentify each item and fee paid by an Interested Party Contribution.\
      \ \n\n \n(E) Mortgage and Note \nAll Borrowers and co-Borrowers must take title to the Property\
      \ in their own name or \na living trust at settlement, be obligated on the Note or credit instrument,\
      \ and sign all \nsecurity instruments. In community property states, the Borrower’s spouse is not\
      \ \nrequired to be a Borrower or a Co-signer. However, the Mortgage must be executed \nby all parties\
      \ necessary to make the lien valid and enforceable under state law. \n(F) Certificate of Occupancy\
      \ \nThe Mortgagee must obtain a copy of the CO, or its equivalent, if the date of the \nissuance\
      \ of the CO or equivalent is less than one year before closing and the \nProperty has never been\
      \ occupied. \nThe Mortgagee must obtain a copy of the CO or its equivalent issued by the local \n\
      jurisdiction, ICC RCI, or CI. \nxiv. Post-closing and Endorsement \n(A) Settlement Statement and\
      \ Settlement Certification \nIf the HUD-1 Settlement Statement or similar legal document is provided\
      \ separately, \nthe Mortgagee must obtain from the Closing Agent a copy of the final statement \n\
      provided to the seller to keep in the case binder. \n(B) Form NPMA-33, Wood Destroying Insect Inspection\
      \ Report \nThe Mortgagee must confirm that the HECM file contains the National Pest \nManagement\
      \ Association (NPMA) form NPMA-33, Wood Destroying Insect \nInspection Report, or the state mandated\
      \ infestation report, as applicable. \n(C) Local Health Authority’s Approval for Individual Water\
      \ and Sewer Systems \nThe Mortgagee must confirm that the HECM file contains the Local Health \n\
      Authority’s approval for Individual Water Supply Systems and sewer systems, if \n(D) HECM for Purchase\
      \ New Construction Exhibits \nThe Mortgagee must confirm that the documentation requirements found\
      \ in the \nHECM for Purchase product sheet are in the HECM file."
    drafter_attestation: Verbatim section from snapshot 8c03836f77f317e1; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
