Compliance Calendar

This Announcement describes the following updates:

▪ Updates to Expense Reimbursement*: provides clarification and further instruction related to expense reimbursement policies

▪ Miscellaneous update:

o Retirement of Form 2200

View the list of impacted topics.

*Policy change not applicable to reverse mortgage loans.

In the wake of the devastation caused by Hurricane Helene, the Federal Housing Administration (FHA) reminds mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages and Home Equity Conversion Mortgages (HECM) in locations in the U.S. and its territories where the President has declared a Major Disaster under the Stafford Act. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond.

The following guidance serves as a reminder that applies to all Presidentially-Declared Major Disaster Areas (PDMDA), which can be found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1):

Loan Servicing and Loss Mitigation

The mortgagee may offer forbearance relief to a borrower with a mortgaged property or place of employment located within a PDMDA as follows:

• Informal Forbearance for Borrowers in PDMDAs. The mortgagee may consider borrowers in PDMDAs for an Informal Forbearance and may offer additional Informal
Forbearance periods if the foreclosure moratorium is extended, as mentioned below.

• Formal Forbearance for Borrowers in PDMDAs. The mortgagee may consider Formal Forbearances for borrowers in PDMDAs while they are pursuing home repairs
and/or resolving verifiable financial difficulties related to the disaster, provided that:

o The forbearance period does not exceed the estimated time needed to complete the home repairs and

o The total accumulated mortgage arrearages during the forbearance period do not exceed the equivalent of 12 months of principal, interest, taxes, and
insurance (PITI).

• FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster declaration.

• In PDMDAs, FHA provides mortgagees an automatic 90-day extension from the foreclosure moratorium expiration date to commence or recommence a foreclosure
action or evaluate the borrower under HUD’s Loss Mitigation Program.

• For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Handbook 4000.1 Section III.A.3.c.iii, Monitoring of Repairs to
Substantially Damaged Homes.

Mortgagees should review complete servicing guidance in Handbook 4000.1, Sections III.A.2, relating to the servicing of mortgages in PDMDAs.

Mortgagees are reminded to contact affected borrowers who may require loss mitigation assistance as soon as possible post-disaster, and FHA encourages mortgagees to use any permissible means to contact borrowers to provide them with needed forbearance relief. Because of the extensive destruction in connection with Hurricane Helene and disruption to modes of communication, mortgagees may offer and provide the forbearance unless the borrower affirmatively declines the offer.

Home Equity Conversion Mortgages

• HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day
extension of HECM foreclosure timelines.

• In PDMDAs, FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure extension expiration date to commence or
recommence a foreclosure action.

This Guide Bulletin announces:

• CHOICERenovation® and CHOICEReno eXPress® Mortgages

➢ The refactoring of Guide Chapter 4607

➢ The introduction of Loan Status HubSM – November 2, 2024

➢ Updates to CHOICERenovation Mortgages – November 25, 2024

➢ New delivery requirements – March 31, 2025

• Asset and income modeler

➢ An enhancement to automated employment assessment with Loan Product Advisor® – October 14, 2024

• Duty to Serve Credit Fee Cap

➢ Pricing pipeline coverage for Mortgages originated by a Small Financial Institution – January 1, 2025

• Additional Guide updates

➢ Further updates as described in the Additional Guide updates section of this Bulletin

EFFECTIVE DATE

All of the changes announced in this Bulletin are effective immediately unless otherwise noted.

USDA Rural Development (RD) remains committed to assisting borrowers impacted by disasters and understands that some may experience unique and unparalleled circumstances in their hardships. Due to the magnitude and devastation of Hurricane Helene, the USDA reminds servicers of guidance for servicing accounts when a county, parish or municipality has been identified as a Presidentially Declared Disaster (PDD) area.

This announcement outlines relief measures that holders and/or loan servicers of USDA RD mortgages should implement to assist USDA RD borrowers affected by PDDs. Homeowners impacted may be eligible for temporary relief. Servicers can immediately implement the following for borrowers in the designated areas.

1. FORECLOSURE SUSPENSION: The servicer must suspend all foreclosure actions for 90 days for borrowers whose properties or place of employment have been directly impacted in the PDD. This applies to both the initiation of new foreclosures, as well as foreclosures already in process. This suspension shall expire no earlier than 90 days after the date of the PDD unless extended by the USDA.

2. FORBEARANCE: USDA encourages loan servicers to evaluate forbearance options for borrowers in distress in a PDD. Borrowers impacted may be placed on a forbearance of up to 12 months to provide payment relief from their mortgage obligation during this time. Precise and consistent communication with borrowers should help determine whether their difficulties are directly or indirectly related to the PDD, or whether the issue stems from other sources which must be addressed. Guidance relating to this topic can be found in ‘Assistance in Natural Disasters’ located in Chapter 18 of the technical Handbook.

3. REPORTING: Servicers are reminded that they must report the appropriate default status codes associated with the actions taking place. These instructions apply only to USDA Electronic Status Reporting requirements and do not apply to credit bureau reporting. Servicers should confer with their legal team for requirements pertaining to credit bureau reporting.

4. DOCUMENTATION: Servicers should fully document their decisions when loss mitigation servicing actions are implemented. The documentation should substantiate their loss mitigation decision and should follow the Agency’s outline in ‘Assistance in Natural Disasters’, located in Chapter 18 of the technical Handbook.

Questions regarding program policy and this announcement may be directed to the SFHGLP Servicing Division at sfhglpServicing@usda.gov or (833) 314-0168 option 4.

Thank you for your support of the Single-Family Housing Guaranteed Loan Program.