The Federal Housing Administration is seeking feedback on its current single family minimum property requirements, after the Mortgage Bankers Association and others nudged the agency earlier this month.
The FHA published a request for information in the Federal Register Friday, looking for stakeholder comment on how to improve and modernize standards that have not received a comprehensive update in more than 20 years and no longer reflect the current state of the housing industry, according to the FHA.
"FHA MPRs are dated, creating unnecessary burdens that
This motion is in line with the administration's efforts to
The FHA is particularly interested in receiving answers to the following questions:
- What are the advantages and/or disadvantages of FHA's current MPRs?
- How could FHA streamline and/or simplify its MPR policies?
- Are there important factors FHA should consider when modernizing MPR policies?
- What specific FHA MPRs are no longer applicable or necessary?
- Do current FHA MPRs adequately protect borrowers utilizing FHA-insured single family mortgage programs to finance a home?
- Are MPRs clearly communicated in FHA policies?
- Is the FHA-approved appraiser's scope of work to identify MPR deficiencies aligned with modern appraisal practices?
The feedback will guide efforts to adjust the requirements, which were designed to ensure that FHA-insured mortgages are collateralized by properties that are safe, sound and secure, to better fit current industry practices, the FHA said. The agency set the deadline to submit comments for June 29.
The request for information comes after the MBA and other trade associations sent a letter to Department of Housing and Urban Development Secretary Scott Turner, urging the FHA to address the requirements and other appraisal reforms.
"MBA has long urged FHA to modernize its MPRs and better align its standards with the property condition rating frameworks used by Fannie Mae and Freddie Mac," an MBA spokesperson told National Mortgage News. "This would reduce operational friction while maintaining appropriate safety and soundness protections."
The most significant change the associations suggested in the letter to Turner was the adoption of the government-sponsored entity's property condition standards as a replacement for the FHA requirements. The GSE standards are associated with the most widely used financing programs in the market, according to the letter.
"We believe alignment between FHA and GSE property standards could help reduce appraisal-related delays, improve consistency across the market and expand access to qualified appraisers," the MBA spokesperson said.
The MBA will meet with its members and submit a response by the June deadline.
