source:
  type: regulation
  id: hud-ml-2026-09
  authority: HUD Mortgagee Letter 2026-09
  description: HUD Mortgagee Letter 2026-09 (June 23, 2026) — Eliminating Unnecessary Requirements for
    FHA Mortgagee Approval and Quality Control. Eliminates/updates unnecessary Mortgagee approval and
    QC requirements (Officer in Charge full-time/exclusive employment, Training access-to-guidance, Identifying
    Patterns, and an EPD sampling exception for PDMDAs) across FHA-insured mortgage programs; effective
    immediately. Full verbatim text captured section-by-section from the HUD source PDF.
obligations:
- id: hud-ml-2026-09-subject
  canonical_id: hud-ml-2026-09-subject
  section: HUD ML 2026-09 — Subject
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - origination
  - servicing
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Subject
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: Eliminating Unnecessary Requirements for FHA Mortgagee Approval and Quality Control
- id: hud-ml-2026-09-purpose
  canonical_id: hud-ml-2026-09-purpose
  section: HUD ML 2026-09 — Purpose
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - origination
  - servicing
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Purpose
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: This Mortgagee Letter (ML) eliminates and updates unnecessary requirements related
      to FHA Mortgagee approval and quality control.
- id: hud-ml-2026-09-effective-date
  canonical_id: hud-ml-2026-09-effective-date
  section: HUD ML 2026-09 — Effective Date
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Effective Date
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: The provisions of this ML are effective immediately. All updates will be incorporated
      into a forthcoming update of the HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook
      (Handbook 4000.1).
- id: hud-ml-2026-09-affected-programs
  canonical_id: hud-ml-2026-09-affected-programs
  section: HUD ML 2026-09 — Affected Programs
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Affected Programs
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: The provisions of this ML apply to all FHA-insured mortgage programs.
- id: hud-ml-2026-09-background-streamline
  canonical_id: hud-ml-2026-09-background-streamline
  section: HUD ML 2026-09 — Background (streamlining Handbook 4000.1)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Background — streamlining
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: FHA has identified several opportunities to streamline Handbook 4000.1 by eliminating
      outdated, redundant, or otherwise unnecessary requirements in section I, Doing Business with FHA,
      and section V, Quality Control, Oversight, and Compliance. These changes align with the Trump Administration’s
      broader goals to reduce costs and unnecessary regulatory burdens as well as foster long-term economic
      stability.
- id: hud-ml-2026-09-background-epd-exception
  canonical_id: hud-ml-2026-09-background-epd-exception
  section: HUD ML 2026-09 — Background (permanent EPD exception for PDMDAs)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - quality-control
  - epd
  - pdmda
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Background — EPD exception
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: In section V, FHA is creating a permanent exception to its Sample Composition Standard
      (V.A.3.a.iv) policy that exempts Early Payment Defaults (EPD) from the required monthly Quality
      Control (QC) review sample for certain Mortgages impacted by Presidentially-Declared Major Disasters.
      FHA has repeatedly issued waivers of EPD review requirements for Properties located in specific
      Presidentially-Declared Major Disaster Areas (PDMDA). Increased EPDs following a major disaster
      are expected, and many defaults in PDMDAs are likely the result of loss of employment/income, property
      damage, forced relocation, and other factors unrelated to noncompliance with FHA requirements. A
      permanent exception eliminates the need for FHA to issue a waiver for each PDMDA.
- id: hud-ml-2026-09-background-training
  canonical_id: hud-ml-2026-09-background-training
  section: HUD ML 2026-09 — Background (removed Access to FHA Guidance in Training)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - quality-control
  - training
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Background — Training
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: FHA has removed the outdated policy in Training (V.A.2.b.i(A)) that required Mortgagees
      to provide their staff with access to the internet or hard copies of current FHA guidance. Internet
      access is essentially universal for the mortgage industry and all current FHA guidance is available
      online. Additionally, Mortgagees are responsible for compliance with applicable guidance whether
      their staff are actively referencing such guidance or not.
- id: hud-ml-2026-09-background-identifying-patterns
  canonical_id: hud-ml-2026-09-background-identifying-patterns
  section: HUD ML 2026-09 — Background (removed Identifying Patterns QC requirement)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - quality-control
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Background — Identifying Patterns
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: FHA has removed redundant and potentially confusing QC requirements related to Identifying
      Patterns (V.A.2.c) of noncompliance, which described an implicit component of an effective QC Program.
      Other FHA policy requires Mortgagees to expand the scope of loan-level QC when fraud or patterns
      of deficiencies are identified in Scope (V.A.3.a.ii) making the previous Identifying Patterns (V.A.2.c)
      section redundant. The previous section also focused on loan performance even though a focus on
      loan quality (patterns of Findings) is the most direct way to uncover control weaknesses. Moreover,
      the expectation that Mortgagees review loan performance data is addressed indirectly by Credit Watch
      Termination of Title II Mortgagees (V.E.3.a.iii), which describes FHA’s continuous monitoring process
      for loan performance trends.
- id: hud-ml-2026-09-background-officer-in-charge
  canonical_id: hud-ml-2026-09-background-officer-in-charge
  section: HUD ML 2026-09 — Background (removed full-time/exclusive Officer in Charge requirement)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - mortgagee-approval
  - officer-in-charge
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Background — Officer in Charge
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: Finally, FHA has removed the section I requirement for the Mortgagee’s Officer in
      Charge to be a full-time Corporate Officer exclusively employed by the Mortgagee. FHA already allowed
      an exception to the exclusive employment requirement for Investing Mortgagees without servicing
      authority, and requirements applicable to all Corporate Officers include specific conditions under
      which Corporate Officers may represent more than one Mortgagee. Since the Officer in Charge will
      be subject to the same conditions, the full-time/exclusive employment requirement is unnecessary.
- id: hud-ml-2026-09-summary-of-changes-1
  canonical_id: hud-ml-2026-09-summary-of-changes-1
  section: HUD ML 2026-09 — Summary of Changes (Officer in Charge)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Summary of Changes (1)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: 'This ML: • updates Officer in Charge – Standard (I.A.3.c.iv(B)(2)(b)) to remove
      the full-time/exclusive employment requirement and the exception for Investing Mortgagees, which
      is no longer necessary;'
- id: hud-ml-2026-09-summary-of-changes-2
  canonical_id: hud-ml-2026-09-summary-of-changes-2
  section: HUD ML 2026-09 — Summary of Changes (Training, Identifying Patterns, EPD)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Summary of Changes (2)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: updates Training (V.A.2.b.i(A)) to renumber the section and remove Access to FHA
      Guidance (V.A.2.b.i.(A)(2)); • removes Identifying Patterns (V.A.2.c) and renumbers subsequent sections;
      and • updates Sample Composition Standard – Early Payment Defaults (V.A.3.a.iv(B)) with an exception
      to the EPD sampling requirement for certain Mortgages impacted by PDMDAs. The Handbook 4000.1 sections
      impacted by this ML are provided in Attachment 1, with changes tracked in redline to help users
      clearly identify the policy requirements being revised or removed from the Handbook.
- id: hud-ml-2026-09-hb-officer-in-charge-standard
  canonical_id: hud-ml-2026-09-hb-officer-in-charge-standard
  section: HUD ML 2026-09 — Handbook 4000.1 Doing Business with FHA — Officer in Charge, Standard (I.A.3.c.iv(B)(2)(b))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - mortgagee-approval
  - officer-in-charge
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Officer in Charge — Standard (I.A.3.c.iv(B)(2)(b))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: 'The Mortgagee must designate as the Officer in Charge a Corporate Officer who is
      employed by the Mortgagee and has at least three years of experience in the specific Mortgagee functions
      or activities that the Mortgagee is approved to perform, including: • originating or servicing Single
      Family or multifamily Mortgages; • investing funds in real estate Mortgages; or • managing other
      individuals performing these services. A Corporate Officer’s Experience in real estate sales or
      brokerage does not qualify.'
- id: hud-ml-2026-09-hb-training
  canonical_id: hud-ml-2026-09-hb-training
  section: 'HUD ML 2026-09 — Handbook 4000.1 Quality Control — Personnel: Training (V.A.2.b.i(A))'
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - quality-control
  - training
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Personnel — Training (V.A.2.b.i(A))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: Personnel (V.A.2.b.i) (A) Training [Text was deleted in this section.] (1) Standard
      The Mortgagee must train all staff involved in FHA Loan Administration and QC processes to ensure
      that staff know all current FHA requirements for the FHA Loan Administration practices for which
      the Mortgagee is responsible. (2) Required Documentation The Mortgagee must maintain a list of all
      training provided to staff. For each training, the Mortgagee must include a summary of the content
      covered.
- id: hud-ml-2026-09-hb-epd-exception
  canonical_id: hud-ml-2026-09-hb-epd-exception
  section: 'HUD ML 2026-09 — Handbook 4000.1 Quality Control — Sample Composition Standard: Early Payment
    Defaults (V.A.3.a.iv(B))'
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - mortgagee-approval
  - quality-control
  - ml-2026-09
  - quality-control
  - epd
  - pdmda
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-09 — Eliminating Unnecessary Requirements for FHA Mortgagee Approval
      and Quality Control — Sample Composition Standard — Early Payment Defaults (V.A.3.a.iv(B))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
    snapshot_id: 6106fef9ba81cd54
    fetched_at: '2026-07-13T02:16:17Z'
    content_hash: sha256:0b7315cc6fbf278dc603cc993a81a079cc5e3d8a560e11800f5da84345c212ae
    paragraph_quote: 'Sample Composition Standard (V.A.3.a.iv) (B) Early Payment Defaults (1) Definition
      Early Payment Defaults (EPD) are all Mortgages that become 60 Days delinquent within the first six
      payments. (2) Standard The Mortgagee must review all EPDs underwritten by the Mortgagee, regardless
      of which Mortgagee services the Mortgage, unless the EPDs are covered by the exception below. Title
      II Mortgagees may use Neighborhood Watch to assist with identifying EPDs. (3) Exception for Mortgages
      Impacted by Presidentially-Declared Major Disasters The Mortgagee is not required to review EPDs
      that: • are secured by Properties located in a Presidentially-Declared Major Disaster Area (PDMDA);
      • have a mortgage Closing Date before the Incident Period start date (as defined by FEMA); and •
      become EPDs after the Incident Period start date.'
