source:
  type: regulation
  id: hud-4000-1-ii-a-6
  authority: HUD Handbook 4000.1 Part II.A.6 — Closing (Forward Mortgages)
  description: 'HUD Handbook 4000.1 Part II.A.6 governs Mortgagee Closing Requirements

    for FHA Title II forward mortgages: chain-of-title evidence for

    recently-sold properties, title objection clearance to ensure first

    lien position, closing in compliance with the mortgage approval,

    use of FHA-prescribed forms, and projected escrow account

    establishment per 24 CFR §203.550 and RESPA. Fills HUD 4000.1

    Part II.A.6 chapter gap.

    '
obligations:
- id: hud-4000-1-ii-a-6-full
  canonical_id: hud-4000-1-ii-a-6-full
  section: HUD Handbook 4000.1 Part II.A.6
  description: "Mortgagee Closing Requirements: a. Mortgagee Closing Requirements (01/24/2022) \ni. Chain\
    \ of Title \nThe Mortgagee must obtain evidence of prior ownership when a Property was sold within\
    \ \n12 months of the case number assignment date. The Mortgagee must review the evidence \nof prior\
    \ ownership to determine any undisclosed Identity-of-…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 II.A.6.a.i — Chain of Title
    source_class: hud-handbook-4000-1
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/40001HSGH.pdf
    snapshot_id: 3bf33edadcf6461d
    fetched_at: '2026-05-25T14:10:11Z'
    content_hash: sha256:e1c2dc1c75ddb0ee32fe5c2fb7c9bb19f1c93b48a3e26e6d63dc6e7f37c92ec0
    paragraph_quote: "a. Mortgagee Closing Requirements (01/24/2022) \ni. Chain of Title \nThe Mortgagee\
      \ must obtain evidence of prior ownership when a Property was sold within \n12 months of the case\
      \ number assignment date. The Mortgagee must review the evidence \nof prior ownership to determine\
      \ any undisclosed Identity-of-Interest transactions. \nii. Title \nThe Mortgagee must ensure that\
      \ all objections to title have been cleared and any \ndiscrepancies have been resolved to ensure\
      \ that the FHA-insured Mortgage is in first lien \nposition. \n(A) Good and Marketable Title \n\
      The Mortgagee must determine if there are any exceptions to good and \nmarketable title not covered\
      \ by the General Waiver. See General Mortgage \nInsurance Eligibility and 24 CFR § 203.389. \nThe\
      \ Mortgagee must review any exceptions discovered during the title search and \ndecide whether such\
      \ title exceptions affect the Property’s value and/or \nmarketability. \nIf the Mortgagee determines\
      \ that any exception affects the Property’s value and/or \nmarketability, the Mortgagee must request\
      \ a waiver. \nThe Mortgagee must obtain Title Evidence demonstrating good and marketable \n(B) Requests\
      \ for Title Exceptions Not Covered by the General Waiver \nThe Mortgagee must submit a request for\
      \ a waiver to FHA prior to endorsement when \nthe Title Exception is not covered by the General\
      \ Waiver. The request must include \nthe case number, the specific guideline and the reason the\
      \ Mortgagee is asking for the \nwaiver. All requests must be submitted to the FHA Resource Center\
      \ at \nanswers@hud.gov and include the following subject line: Title Exception Not \nCovered by\
      \ General Waiver. If FHA grants the requested waiver, the Mortgagee will \nreceive a notification\
      \ in writing. The Mortgagee must place the notice of approval in \nthe mortgage file. \n\n \nIf\
      \ the waiver request is denied and good and marketable title is not obtained, the \nMortgage is\
      \ not eligible for FHA insurance. \n(C) Manufactured Housing \nGood and marketable title showing\
      \ the Manufactured Home and land are classified as \nreal estate at the time of closing is required.\
      \ \nIf there were two existing titles at the time the housing unit was purchased, the \nMortgagee\
      \ must ensure that all state or local requirements for proper purging of the \ntitle (chattel or\
      \ equivalent debt instrument) have been met, and the subject Property is \nclassified as real estate\
      \ prior to endorsement. The Manufactured Home need not be \ntaxed as Real Property. \niii. Legal\
      \ Restrictions on Conveyance (Free Assumability) \nThe Mortgagee must determine if there are any\
      \ legal restrictions on conveyance in \naccordance with 24 CFR § 203.41. \niv. Closing in Compliance\
      \ with Mortgage Approval \nThe Mortgagee must instruct the settlement agent to close the Mortgage\
      \ in the same \nmanner in which it was underwritten and approved. \nThe Mortgagee must ensure that\
      \ the conditions listed on form HUD-92900-A, HUD \nAddendum to Uniform Residential Loan Application,\
      \ and/or form HUD-92800.5B, \nConditional Commitment Direct Endorsement Statement of Appraised Value,\
      \ are \nsatisfied. \nv. Closing in the Mortgagee’s Name \nA Mortgage may close in the name of the\
      \ Mortgagee or the sponsoring Mortgagee, the \nprincipal or the authorized agent. TPOs that are\
      \ not FHA-approved Mortgagees may not \nclose in their own names or perform any functions in FHA\
      \ Connection (FHAC). \nvi. Required Forms \nThe Mortgagee must use the forms and/or language prescribed\
      \ by FHA in the legal \ndocuments used for closing the Mortgage. \nvii. Certifications \n(A) Borrower\
      \ Certification \nThe Borrower must sign the certification on form HUD-92900-A for all transactions\
      \ \nand the Settlement Certification for purchase transactions in accordance with the \ninstructions\
      \ provided on the form. \n\n \n(B) Seller Certification \nThe seller must sign the certification\
      \ on the Settlement Certification for purchase \ntransactions. \n(C) Settlement Agent Certification\
      \ \nThe settlement agent must sign the certification on the Settlement Certification for \npurchase\
      \ transactions. \n(D) Lender Certification \nThe Mortgagee must sign the certifications on the form\
      \ HUD-92900-A in accordance \nwith the instructions provided on the form. \nProjected Escrow \n\
      The Mortgagee must establish the escrow account in accordance with the regulatory \nrequirements\
      \ in 24 CFR § 203.550 and RESPA. \n(A) Monthly Escrow Obligations \nThe Mortgagee must collect a\
      \ monthly amount from the Borrower that will enable it \nto pay all escrow obligations in accordance\
      \ with 24 CFR § 203.23. The escrow \naccount must be sufficient to meet the following obligations\
      \ when they become due: \n• hazard insurance premiums; \n• Mortgage Insurance Premiums (MIP); \n\
      • flood insurance premiums if applicable; \n• Ground Rents if applicable; \n• servicing, maintenance,\
      \ repair and replacement of water purification \nequipment; and \n• any item that would create liens\
      \ on the Property positioned ahead of the FHAinsured Mortgage, other than condominium or Homeowners’\
      \ Association \n(HOA) fees. \n(B) Repair Completion Escrow Requirements \nThe Mortgagee may establish\
      \ a repair escrow for incomplete construction, or for \nalterations and repairs that cannot be completed\
      \ prior to loan closing, provided the \nhousing is habitable and safe for occupancy at the time\
      \ of loan closing. \nRepair escrow funds must be sufficient to cover the cost of the repairs or\
      \ \nimprovements. The cost for Borrower labor may not be included in the repair escrow"
    drafter_attestation: Verbatim section from snapshot 3bf33edadcf6461d; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
