source:
  type: guide
  id: hud-4000-1-ii-a-applications-and-disclosures-2
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Applications
    and Disclosures (03/19/2025)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Applications
    and Disclosures (03/19/2025).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-a-applications-and-disclosures-2-full
  canonical_id: hud-4000-1-ii-a-applications-and-disclosures-2-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Applications
    and Disclosures (03/19/2025)
  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 (03/19/2025)
    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 (03/19/2025) The Mortgagee must
      obtain a completed Fannie Mae Form 1009, Residential Loan Application for Reverse
      Mortgages (RLARM), from the Borrower and must capture additional required information
      using Parts IV, V, and VI of Fannie Mae Form 1003/Freddie Mac Form 65, Uniform
      Residential Loan Application (URLA), or an alternative form that captures the
      same information. In addition, the Mortgagee must provide all required federal
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1 543 Last
      Revised: 11/26/2025 and state disclosures to begin the origination process.
      Regardless of the form used, Mortgagees must ensure that the Borrower certifies
      to the accuracy and completeness of the financial information. 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 HECM Application Package The Mortgagee
      must maintain all information and documentation that is relevant to its approval
      decision in the HECM 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 for the approval decision, the Mortgagee
      must obtain additional explanation and documentation, consistent with information
      in the HECM file, to clarify or supplement the information and documentation
      submitted by the Borrower. (A) General Requirements (1) Maximum Age of HECM
      Documents (a) General Document Age Documents used in the origination and financial
      assessment of a HECM may not be more than 120 Days old at the Disbursement Date,
      except for appraisals, which are subject to separate validity period requirements.
      Documents whose validity for financial assessment 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 is180 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 II. ORIGINATION THROUGH
      POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages
      2. Origination/Processing Handbook 4000.1 544 Last Revised: 11/26/2025 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. (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. II.
      ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs
      Reverse Mortgages 2. Origination/Processing Handbook 4000.1 545 Last Revised:
      11/26/2025 (3) Signature Requirements for All Application Forms (a) Borrowers
      with Legal Competency All Borrowers must sign and date the initial and final
      RLARM. All Borrowers must sign and date pages one and 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 Mortgagee may accept the RLARM
      and closing documents executed by a person holding a durable POA specifically
      designed to survive incapacity and avoid the need for court proceedings, provided
      the attorney-in-fact has specific authority to obligate the Borrower and has
      received HECM counseling by a Participating Agency. (b) Borrowers Lacking Legal
      Competency The Borrower may not sign and date the initial and final RLARM. The
      Borrower may not sign and date pages one and two of the initial form HUD- 92900-A
      nor sign and date the complete final form HUD-92900-A. The Mortgagee may accept
      any application form executed by: • a court-appointed conservator or guardian
      with documented authority to obligate the Borrower; or • a person holding a
      durable POA specifically designed to survive incapacity and avoid the need for
      court proceedings, provided the attorney-in-fact has specific authority to obligate
      the Borrower and has received HECM counseling by a Participating Agency. Refer
      to Use of Power of Attorney at Closing for further guidance. Refer to Use of
      Court-Appointed Conservator or Guardian for further guidance. Prohibition on
      Documents Signed in Blank Mortgagees are not permitted to require signatories
      to 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 II. ORIGINATION THROUGH
      POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages
      2. Origination/Processing Handbook 4000.1 546 Last Revised: 11/26/2025 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. (i) The Electronic Signatures in Global and
      National Commerce Act (ESIGN Act) Compliance and Technology A Mortgagee’s electronic
      signature technology must comply with all requirements of the 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 must 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 HECM case binder for mortgage
      insurance except II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II
      Insured Housing Programs Reverse Mortgages 2. Origination/Processing Handbook
      4000.1 547 Last Revised: 11/26/2025 the Note. 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 HECMs. • 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.
      (iv) Associating an Electronic Signature with the Authorized Document The Mortgagee
      must ensure that the process for electronically signing authorized documents
      provides 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. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title
      II Insured Housing Programs Reverse Mortgages 2. Origination/Processing Handbook
      4000.1 548 Last Revised: 11/26/2025 (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. (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:
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1 549 Last
      Revised: 11/26/2025 • 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, 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. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing
      Handbook 4000.1 550 Last Revised: 11/26/2025 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. (B) HECM Application and Initial Supporting Documentation (1) RLARM and
      HUD Addendum to the Uniform Residential Loan Application Unless otherwise noted,
      RLARM 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 RLARM and pages one and two of form HUD-92900-A
      before underwriting the HECM application. The loan originator identified on
      the RLARM must be the actual licensed loan originator regardless of whether
      the loan originator is employed by a sponsored TPO or the Mortgagee. The RLARM
      must contain the loan originator’s name, Nationwide Mortgage Licensing System
      and Registry (NMLS) identification number, telephone number, and signature.
      (2) HECM Application Name Requirements (a) Standard All HECM applications must
      be executed in the legal names of all applicants. All HECM applications must
      be executed in the name of one or more individuals. (b) Required Documentation
      The Mortgagee must include a statement that it has verified the Borrower’s and
      Eligible NBS’s identity using valid government-issued photo identification prior
      to closing of the HECM or the Mortgagee may choose to include a copy of such
      photo identification as documentation. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing
      Handbook 4000.1 551 Last Revised: 11/26/2025 (C) Borrower, Eligible Non-Borrowing
      Spouse, and Other Non-Borrowing Household Member Authorizations (1) Authorization
      to Verify Information (a) Definition Other Non-Borrowing Household Member refers
      to a person who occupies the Property to be secured with the HECM who is not
      the spouse of the Borrower and who is also not a Borrower. (b) Standard The
      Mortgagee must obtain the Borrower’s authorization to verify the information
      needed to process the HECM application. The Mortgagee must obtain an Eligible
      NBS’s and Other Non-Borrowing Household Member’s consent and authorization to
      verify their SSN with the Social Security Administration (SSA) when it is necessary
      to process the HECM application using their income as a Compensating Factor
      or in reducing family size when determining if the Borrower meets the applicable
      standard for Residual Income. (c) Required Documentation For each individual,
      Borrower, Eligible NBS, and Other Non-Borrowing Household Member, authorization
      may be accomplished through a blanket authorization form. (2) Form HUD-92900-A
      Part II: Borrower and Non-Borrowing Spouse Consent for Social Security Administration
      to Verify Social Security Number The Mortgagee must obtain the Borrower’s and
      NBS’s signatures on Part II of form HUD-92900-A to verify the Borrower’s and
      NBS’s SSNs with the SSA. Mortgagees may attach an addendum the NBS in lieu of
      form HUD-92900-A which includes the required language in Part II of form HUD-92900-A.
      (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 RLARM is executed. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing
      Handbook 4000.1 552 Last Revised: 11/26/2025 (D) Borrower’s and Eligible Non-Borrowing
      Spouse’s Authorization for Use of Information Protected under the Privacy Act
      (1) Standard The Mortgagee must obtain the Borrower’s and Eligible NBS’s consent
      for use of the Borrower’s information for any purpose relating to the origination,
      servicing, loss mitigation, and disposition of the HECM or Property securing
      the HECM and relating to any insurance claim and ultimate resolution of such
      claims by the Mortgagee and FHA. (2) Required Documentation The Mortgagee must
      obtain a signed statement from the Borrower and Eligible NBS that clearly expresses
      their consent for the use of the Borrower’s and Eligible NBS’s information.
      ii. Disclosures and Legal Compliance The Mortgagee must provide or ensure the
      Borrower is provided the following disclosures. (A) HECM Required Disclosures
      (1) Standard The Mortgagee must provide Borrowers with a HECM Program Description
      disclosure describing all products, options, and features of the HECM program
      that FHA will insure, regardless of the products they offer. The Mortgagee must
      provide a disclosure that is written in clear, consistent, and concise language.
      The Mortgagee must not mislead or otherwise cause a Borrower to believe that
      the HECM product contains any features or limitations that are inconsistent
      with FHA’s requirements. Mortgagees are prohibited from seeking any agreement
      from the Borrower that is inconsistent with the ability of the Borrower to exercise
      their rights to the fullest extent permitted by law. The Mortgagee’s HECM Program
      Description disclosure must explain: For all HECMs: • the HECM is not assumable;
      • the HECM is a non-recourse loan; • the Property must be the Principal Residence:
      • the Borrower will be required to provide a written annual occupancy certification;
      and II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1 553 Last
      Revised: 11/26/2025 • the Borrower is responsible for notifying the Mortgagee
      of absences from the Property in excess of two months to avoid determinations
      that the Borrower’s Principal Residence has changed; • FHA insures fixed rate
      HECMs, as well as annual and monthly adjustable rate HECMs; • the amount of
      funds made available to the Borrower is based on the age of the youngest Borrower
      or Eligible NBS; • principal limit growth for all payment plan options; • the
      Principal Limit may increase monthly but there are restrictions for disbursing
      those funds during the First 12-Month Disbursement Period; • the Initial Mortgage
      Insurance Premium (IMIP) payment methods and the formula used to calculate the
      IMIP amount; • the costs of obtaining the HECM: • provide the Borrower with
      a Good Faith Estimate (GFE), giving the Borrower an estimate of closing costs
      and explaining which charges are required to obtain the HECM and which charges
      are not required to obtain the HECM, including the disclosure of third-party
      fees; and • inquire whether the HECM proceeds will be used to pay any cost associated
      with estate planners and inform the Borrower that such services are unnecessary
      to obtain a HECM and are ineligible for payment from HECM proceeds; • the Borrower
      may incur the cost of a second appraisal, if required by the collateral risk
      assessment, which is used to determine whether additional support for the collateral
      value is required; • the Property must meet FHA’s Minimum Property Requirements
      (MPR) or Minimum Property Standards (MPS) and the provisions for completing
      required repairs either prior to or after closing; • insurance is required for
      all improvements on the Property that serves as collateral for the HECM, whether
      in existence at the time of origination or subsequently erected, against any
      hazards, casualties, and contingencies, including fire and flood, for which
      the Mortgagee requires insurance. Such insurance must be maintained in the amount
      and for the period of time that is necessary to protect the Mortgagee’s investment;
      • the Borrower and NBS, if any, will be required to disclose and certify their
      marital status at closing: • an NBS may be eligible for the deferral of the
      Due and Payable status upon the death of the last surviving Borrower if the
      NBS meets and continues to meet the Qualifying Attributes or the NBS continues
      to reside in the home as their Principal Residence despite the Borrower remaining
      in a health care facility for a period that exceeds 12 consecutive months; and
      • an NBS and Non-Borrowing Owners must sign the Mortgage as Borrowers evidencing
      their commitment of the Property as security for the Mortgage, and sign a certification
      consenting to their spouse or II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing
      Handbook 4000.1 554 Last Revised: 11/26/2025 other Borrower obtaining the HECM
      and acknowledging the terms and conditions of the Mortgage; • repayment and
      prepayment features; and • the Borrower’s rights, obligations, and remedies
      with respect to temporary absences from the home, late payments, and payment
      default by the Mortgagee and all conditions requiring satisfaction of the HECM.
      For fixed rate HECMs, Mortgagees must also explain: • the Borrower is limited
      to the single lump sum payment option, which provides a single Disbursement
      at closing with no opportunity for future Disbursements to or on behalf of the
      Borrower, except as allowed from a Set-Aside established at closing; and • Disbursement
      of HECM proceeds during the First 12-Month Disbursement Period is limited to
      the amount of the Borrower’s Advance, plus Disbursements from a Set-Aside that
      was established at closing. For adjustable rate HECMs: • the Borrower may choose
      from five, flexible payment options, allowing for future Disbursements, and
      the Borrower may change payment plans to one of the other available payment
      options at any time provided funds are available; • the frequency of annual
      and monthly adjustable rate changes; and • Disbursement of HECM proceeds during
      the First 12-Month Disbursement Period is subject to an Initial Disbursement
      Limit. (2) Required Documentation At initial application, the Mortgagee must
      obtain the HECM Program Description disclosure signed and dated by the Borrower.
      (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 HECM 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 Fair Credit Reporting Act, 15 U.S.C. §§ 1681‒1681x; and
      • the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691‒1691f. II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse
      Mortgages 2. Origination/Processing Handbook 4000.1 555 Last Revised: 11/26/2025
      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, national origin, familial status, disability, marital status, source of
      income of the Borrower, or location of the Property. iii. Application Document
      Processing (A) Mortgagee Responsibilities The Mortgagee must use FHAC to order
      the FHA case number and perform any associated tasks. The Mortgagee must also
      use the Home Equity Reverse Mortgage Information Technology (HERMIT) to remit
      mortgage insurance premiums and to perform all loan servicing activities. 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 HECMs only as described below. The Mortgagee
      ultimately remains responsible for the quality of the HECM and for strict compliance
      with all applicable FHA requirements, regardless of the Mortgagee’s relationship
      to the person or Affiliate 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
      FHA-approved Mortgagees acting in the capacity of a sponsored TPO may have direct
      access to FHAC. (2) 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 HECMs
      to investors. (3) Excluded Parties The Mortgagee may not contract with Affiliates
      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 Affiliate or person to perform any function
      relating to the origination of a HECM. The Mortgagee must check the System for
      Award Management (SAM) and must follow appropriate procedures defined by that
      system to confirm eligibility for participation. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing
      Handbook 4000.1 556 Last Revised: 11/26/2025 (B) Initial Document Processing
      The Mortgagee begins processing the HECM by obtaining an initial RLARM and Part
      III 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 HECM 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; • certify that
      the Mortgagee has an active HECM application for the subject Borrower and Property;
      and • obtain a copy of the Certificate of HECM Counseling for each individual
      required to receive counseling. The Mortgagee is not required to input appraiser
      information at the time the case number is ordered. The Mortgagee must order
      a case number prior to the expiration of the Certificate of HECM Counseling
      for the last Borrower or legal representative who is required to receive counseling.
      The Mortgagee is not required to close on the HECM prior to the expiration of
      the Certificate of HECM Counseling. (a) Automated Data Processing Codes FHA
      Automated Data Processing (ADP) Codes are derived from the section of the National
      Housing Act under which the HECM is to be insured. The Mortgagee must select
      the correct ADP Code for each HECM in FHAC. (b) Case Numbers on Sponsored Originations
      The Mortgagee will not be able to order case numbers for sponsored originations
      unless the sponsored TPO has been registered in FHAC. (c) Certificate of HECM
      Counseling Identification Number The Mortgagee must enter the HECM counseling
      certificate identification number belonging to the last Borrower or legal representative
      counseled when there are multiple certificates. See Individuals Required to
      Receive HECM Counseling. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B.
      Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing
      Handbook 4000.1 557 Last Revised: 11/26/2025 (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: • form HUD-92900.4, 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 cancellation 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 IMIP 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
      HECM closed prior to cancellation of the case number, such as a Settlement Statement
      or similar legal document. (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. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B.
      Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing
      Handbook 4000.1 558 Last Revised: 11/26/2025 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. (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) Preliminary
      Review of Borrower Eligibility Requirements Before any charges may be incurred
      by the prospective Borrower, the Mortgagee must preliminarily review whether:
      • the Borrower will be at least 62 years of age by closing; • the Borrower has
      any unresolved delinquent Federal Debt – see Delinquent Federal Tax Debt and
      Borrower Ineligibility Due to Delinquent Federal Non-Tax Debt; and • the Property
      securing the HECM will be the Borrower’s Principal Residence. If, after a review
      of these requirements, the Mortgagee finds that the Borrower is ineligible,
      the Mortgagee must notify the Borrower in writing of their ineligibility and
      cease processing of the application. The Mortgagee can charge the Borrower for
      any services performed after this determination. (6) Ordering Title Commitments
      The Mortgagee must order a title commitment to ensure the Property will be properly
      titled and the HECM secured in accordance with FHA requirements. (7) Ordering
      Appraisals The Mortgagee must order a new appraisal for each HECM 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. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured
      Housing Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1
      559 Last Revised: 11/26/2025 (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 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, 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 an appraisal for FHA financing. (d) Appraiser Independence The
      Mortgagee must ensure it does not compromise the Appraiser’s independence. II.
      ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs
      Reverse Mortgages 2. Origination/Processing Handbook 4000.1 560 Last Revised:
      11/26/2025 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 HECM, or who is not independent of the Mortgagee’s HECM production staff
      or processes or the authorized third party’s staff or processes. 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 AVM in connection with a
      HECM transaction unless: • required by FHA’s collateral risk assessment; • 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 HECM file; or • 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 II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse
      Mortgages 2. Origination/Processing Handbook 4000.1 561 Last Revised: 11/26/2025
      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 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, land lease, surveys,
      and other legal documents contained in the HECM 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. (8) 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
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1 562 Last
      Revised: 11/26/2025 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 HECM. Additionally, FHA and the Mortgagee
      must be indicated as the intended users of the appraisal report. (b) Required
      Documentation The Mortgagee must retain documentation in the case binder substantiating
      conversion of the Mortgage to FHA. (9) Transferring Existing Appraisals In cases
      where the 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. 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. (10) Ordering Second Appraisal (a) Collateral Risk Assessment (i)
      Definition Closing Date refers to the date on which the Borrower signs the Note.
      Collateral Risk Assessment refers to FHA’s automated process that is used to
      establish the appraised value of the property that will serve as collateral
      for the HECM. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured
      Housing Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1
      563 Last Revised: 11/26/2025 Electronic Appraisal Delivery (EAD) refers to a
      web-based platform where Mortgagees or their designated technology service providers
      electronically deliver FHA Single Family appraisal reports prior to endorsement.
      (ii) Standard If FHA’s collateral risk assessment determines a second appraisal
      is required, the Mortgagee must order the second appraisal from an Appraiser
      not associated with the same appraisal company as the first appraisal. The Mortgagee
      must allot adequate time prior to the planned Closing Date to allow for obtaining
      a second appraisal, if required. The cost of the second appraisal is eligible
      to be financed as part of the closing costs. (b) 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. (i) Second Appraisal by Original Mortgagee A second
      appraisal may only be ordered if: • FHA’s collateral risk assessment determines
      a second appraisal is required. The cost of the second appraisal may be financed
      as part of the closing costs; or • the Direct Endorsement (DE) underwriter (underwriter)
      determines the first appraisal is materially deficient and the Appraiser is
      unable to resolve 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. 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 II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title
      II Insured Housing Programs Reverse Mortgages 2. Origination/Processing Handbook
      4000.1 564 Last Revised: 11/26/2025 conclusions compromise the integrity, accuracy,
      and/or thoroughness of the appraisal submitted to the client. (ii) 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. (iii) 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. (iv) Required Documentation The Mortgagee must document why a second
      appraisal was ordered and retain the explanation and all appraisal reports in
      the case binder. (11) 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 the USPAP.
      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; • 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; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured
      Housing Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1
      565 Last Revised: 11/26/2025 • 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. (12) Appraisal Delivery – Electronic Appraisal Delivery (a) Definition
      The Electronic Appraisal Delivery (EAD) refers to 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
