The FHA 203(b) Loan Program - STM Partners

New Construction, Continued
Architectural
Exhibits/
Properties Not
Complying with
ML 2001-27
General
• Local jurisdictions that do NOT issue a Building Permit (or its equivalent) prior to
construction and a Certificate of Occupancy (or its equivalent), for a property one
year old or less must have one of the following to be eligible for a high-ratio
insured mortgage:
• Early Start Letter, OR
• 10 Year Protection Plan acceptable to HUD.
• Properties NOT processed and closed in accordance with the specifications in
Mortgagee Letter 2001-27.must meet the requirements shown below:
• If the property is proposed or under construction and NOT 90% complete at
time of appraisal, HUD expects the lender to obtain the architectural exhibits
for the appraiser.
• These exhibits must be adequate and accurate to determine compliance with
applicable HUD standards, for the accurate basis for HUD commitments,
determine acceptability of the physical improvements, and provide the basis
for conclusion. Lenders are not expected to review or approve these
documents.
• Additionally, appraisers must receive a fully executed Builder’s Certification
of Plans, Specifications & Site (Form HUD-92541) before performing the
appraisal on proposed, under construction or less than one year old
properties.
• Appraisers must review Item 1 on this form and note in the Appraisal report
any discrepancies between the information in Item 1 and the actual
conditions observed on site. The appraisal and lender are responsible for
addressing any yes answers in Item 1.
Lender’s Architectural Exhibits
For all proposed construction properties NOT processed under Mortgagee Letter
2001-27 that are less than 90% completed at time of appraisal, HUD requires the
lender to retain the appropriate architectural exhibit(s) in the origination file for
resolving any future construction complaints and Section 518(a) complaints for
structural defects. Therefore, the lender’s file must continue to retain the following
documents for new or proposed construction and high ratio loans:
• One Year Builder’s Warranty (Form HUD-92544)
• Builder’s Certification (Form HUD-92541).
• Design and local authority approval of individual water supply and/or sewage
disposal system
Continued on next page
Section 2.22 July 27, 2012
FHA 203(b) Loan Program Page 30 of 217
Correspondent Seller Guide