[TABLE OF CONTENTS]{.underline}

[Paragraph]{.underline} [Page]{.underline}

# **CHAPTER 1 INTRODUCTION**

1-1 PURPOSE 1-1

1-2 MORTGAGE INSURANCE PROGRAMS 1-1

1-3 GENERAL PROCESSING STEPS 1-2

1-4 LENDER APPROVAL 1-2

1-5 THE CONTRACT OF MORTAGAGE INSURANCE 1-2

1-6 INELIGIBLE PARTICIPANTS 1-3

1-7 PROHIBITION ON PROPERTY FLIPPING 1-4

1-8 MAXIMUM LOAN LIMITS AND MORTGAGE AMOUNTS 1-6

1-9 INTEREST RATE 1-7

1-10 MORTGAGE TERM 1-8

1-11 MORTGAGE INSURANCE PREMIUM (MIP) 1-8

1-12 MORTGAGE NOTE AND SECURITY INSTRUMENT 1-11

1-13 PREPAYMENT PRIVILEGE 1-11

1-14 SECONDARY FINANCING 1-12

1-15 ASSUMPTIONS 1-12

1-16 HUD HANDBOOKS, MORTGAGEE LETTERS, AND OTHER FORMS 1-13

1-17 ORGANIZATION OF HUD 1-13

1-18 CIVIL RIGHTS AND FAIR HOUSING 1-14

1-19 FAIR HOUSING MARKETING 1-15

1-20 REPORTING FRAUD AND ABUSE 1-16

# **CHAPTER 2 PROPERTY APPRAISAL AND VALUATION**

2-1 PURPOSE OF THE APPRAISAL 2-1

2-2 PROPERTY APPRAISAL AND UNDERWRITING PROCESS 2-1

2-3 APPRAISAL REQUIREMENTS 2-1

2-4 APPRAISAL REPORTING REQUIREMENTS 2-1

2-5 CONDOMINIUMS 2-2

2-6 GENERAL ACCEPTABILITY STANDARDS FOR PROPERTY 2-2

2-7 USE OF VA CERTIFICATE OF REASONABLE VALUE (VA-CRV) 2-6

2-8 REQUESTING AN FHA CASE NUMBER 2-6

2-9 TERM OF APPRAISAL 2-7

2-10 COMPLIANCE INSPECTIONS 2-7

2-11 SATISFYING REPAIR REQUIREMENTS 2-7

2-12 SECTION 223 (e) 2-9

2-13 APPRAISAL AND INSPECTION FEES 2-9

2-14 DOCUMENTATION OF APPRAISED VALUE 2-9

## CHAPTER 3 MORTGAGE CREDIT ANALYSIS AND BORROWER APPROVAL

3-1 PURPOSE OF MORTGAGE CREDIT ANALYSIS 3-1

3-2 EQUAL CREDIT OPPORTUNITY 3-1

3-3 CONFIDENTIAL NATURE OF CREDIT INFORMATION 3-1

3-4 APPLICATION 3-1

3-5 CREDIT REPORT AND VERIFICATIONS 3-2

3-6 BORROWER APPROVAL OR REJECTION 3-2

3-7 INVESTMENT PROPERTIES AND DWELLINGS FOR TWO OR MORE FAMILIES 3-3

## CHAPTER 4 CANCELLING CASES AND TRANSFERRING APPLICATIONS

4-1 CANCELLING CASES 4-1

4-2 TRANSFERS OF CASE NUMBERS BETWEEN LENDERS 4-1

## CHAPTER 5 LOAN CLOSING AND INSURANCE

5-1 LOAN CLOSING 5-1

5-2 CLOSING COSTS AND OTHER FEES 5-1

5-3 PROHIBITED PAYMENTS 5-3

5-4 UNIFORM CASE BINDER 5-4

5-5 SUBMISSION OF CLOSING PACKAGE FOR ENDORSEMENT 5-4

5-6 INSURANCE ENDORSEMENT 5-4

5-7 DEFICIENT SUBMISSIONS 5-4

5-8 RETENTION OF LENDER'S ORIGINATION FEE 5-5

5-9 POST-ENDORSEMENT REVIEWS 5-5

## CHAPTER 6 HOME MORTGAGE INSURANCE PROGRAMS

6-1 GENERAL 6-1

6-2 SECTION 203(b) HOME MORTGAGE INSURANCE 6-1

6-3 SECTION 203(h) HOME MORTGAGE INSURANCE FOR DISASTER

VICTIMS 6-2

6-4 SECTION 203(i) HOME MORTGAGE INSURANCE FOR OUTLYING

AREAS 6-3

6-5 SECTION 203(k) REHABILITATION HOME MORTGAGE INSURANCE 6-4

6-6 SECTION 203(n) SINGLE-FAMILY COOPERATIVE PROGRAM 6-5

6-7 SECTION 220 (d)(3)(A) URBAN RENEWAL MORTGAGE INSURANCE 6-5

6-8 SECTION 220(h) INSURED IMPROVEMENT LOANS-URBAN RENEWAL

AREAS 6-6

6-9 SECTION 223(e) MISCELLANEOUS HOUSING INSURANCE 6-7

6-10 SECTION 233 MORTGAGE INSURANCE FOR EXPERIMENTAL

HOUSING 6-8

6-11 SECTION 234(c) MORTGAGE INSURANCE FOR CONDOMINIUM UNITS 6-8

6-12 SECTION 238 (c) MORTGAGE INSURANCE IN MILITARY IMPACTED

AREAS (MIAs) 6-9

6-13 SECTION 245 (a) GPMs AND GEMs 6-9

6-14 SECTION 247 SINGLE-FAMILY MORTGAGE INSURANCE ON

HAWAIIAN HOMELANDS (HHL) 6-11

6-15 SECTION 248 SINGLE-FAMILY MORTGAGE INSURANCE ON

INDIAN HOMELANDS (IL) 6-11

6-16 SECTION 251 ARMs 6-12

6-17 SECTION 255 HECM 6-13

## 

## 

## 

## APPENDICES

I. SINGLE FAMILY HOMEOWNERSHIP CENTER JURISDICTIONS I-1

II\. CASE NUMBER PREFIXES II-1

III\. HOME MORTGAGE AUTOMATED DATA PROCESSING (ADP) CODES III-1

IV\. STATES WITH LOW AND HIGH AVERAGE CLOSING COSTS IV-1

V. PROGRAM IDENTIFICATION CODES V-1

VI\. EXTENDED LENDING AREAS FOR LOAN ORIGINATION VI-1

VII\. SUGGESTED FORMAT FOR CORRECTION OF
MIC............................VII-1

**[FORMS RELEVANT TO HANDBOOK 4000.2]{.underline}**

+----------------+-------------------------------------+---------------+
| **Form \#**    | **Form Name**                       | ##            |
|                |                                     | ###### OMB Ap |
|                |                                     | proval Number |
+----------------+-------------------------------------+---------------+
| FEMA Form      | Elevation Certificate               | 3067-0077     |
| 81-31          |                                     |               |
+----------------+-------------------------------------+---------------+
| HUD 1          | Settlement Statement                | 2502-0265     |
+----------------+-------------------------------------+---------------+
| HUD 59100      | Mortgage Insurance                  | N/A           |
|                | Certificate/Non-Endorsement Notice  |               |
+----------------+-------------------------------------+---------------+
| HUD 91322.1    | Master Appraisal Report             | 2502-0111     |
+----------------+-------------------------------------+---------------+
| HUD 92051      | Compliance Inspection Report        | 2502-0189     |
+----------------+-------------------------------------+---------------+
| HUD 92300      | Mortgagee Assurance of Completion   | 2502-0189     |
+----------------+-------------------------------------+---------------+
| HUD 92561      | Borrower's Contract with Respect to | 2502-0059     |
|                | Hotel and Transient Use of Property |               |
+----------------+-------------------------------------+---------------+
| HUD 92577      | Request for Acceptance of Changes   | 2502-0117     |
|                | in Approved Drawings and            |               |
|                | Specifications                      |               |
+----------------+-------------------------------------+---------------+
| HUD 92800.5B   | Conditional Commitment-DE Statement | 2502-0494     |
|                | of Appraised Value                  |               |
+----------------+-------------------------------------+---------------+
| HUD 92900-B    | Interest Rate Disclosure Statement  | N/A           |
+----------------+-------------------------------------+---------------+
| HUD 92900-PUR  | Mortgage Credit Analysis Worksheet  | 2502-0059     |
|                | Purchase Money Mortgage             |               |
+----------------+-------------------------------------+---------------+
| HUD 92900-WS   | Mortgage Credit Analysis Worksheet  | 2502-0059     |
+----------------+-------------------------------------+---------------+
| URAR (FNMA     | Uniform Residential Appraisal       | N/A           |
| 1004/FHLMC 70) | Report                              |               |
+----------------+-------------------------------------+---------------+
| HUD 92564-VC   | Notice to the Lender                | 2502-0538     |
+----------------+-------------------------------------+---------------+
| HUD 92564-HS   | Notice to Homebuyer                 | 2502-0538     |
+----------------+-------------------------------------+---------------+
| VA 26-1843a    | Master Certificate of Reasonable    | []{.mark}     |
|                | Value                               |               |
+----------------+-------------------------------------+---------------+
| VA-NOV         | Veterans Affairs- Notice of Value   | 2900-0045     |
+----------------+-------------------------------------+---------------+