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What construction documents do lenders need for properties one year old or less?

On new construction one year old or less that involves maximum financing (greater than 90% LTV):
If the property is being processed under the procedures set forth in Mortgagee Letter (ML) 01-27 using a building permit and Certificate of Occupancy (CO), the lender must obtain and submit in the case binder to HUD for endorsement the following construction documents. Also, the lender must retain copies of these construction documents in its origination case binder:

1. Builder's Certification of Plans, Specifications and Site (Form HUD-92541)

2. Builder's One Year Warranty (Form HUD-92544)

3. Building Permit and Certificate of Occupancy

4. Wood Infestation Report, NPCA 99a and 99b

5. Local Health Authority well water analysis or septic report, where applicable

NOTE: These requirements do not apply to loans involving manufactured housing or condominiums (see ML 01-27).

If the case is not being processed under the procedures set forth in ML 2001-27 and instead the lender is using the Early Start process or using a 10 Year Warranty, the lender must obtain and submit in the case binder to HUD the following construction exhibits. Also, the lender must retain copies of all of these documents in its origination case binder:

1. Builders Certification of Plans, Specifications and Site (Form HUD-92541)

2. Builder's One Year Warranty (Form HUD-92544)

3. Wood Infestation Report, NPCA 99a and 99b

4. Ten Year Warranty (if applicable)

5. Three (3) inspections (Form HUD-92051) if not using a 10 Year Warranty - One inspection (Final) if using a 10 Year Warranty

6. Local Health Authority well water analysis or septic report, where applicable

On new construction one year old or less that involves 90% or less LTV financing:
If the property is proposed or under construction the lender must obtain and include in the case binder submitted to HUD for insurance endorsement the following documents.
Also, the lender must retain copies of these documents in its origination case binder:

1. Builders Certification of Plans, Specifications and Site, Form HUD-92541

2. Wood Infestation Report, NPCA 99a and 99b

3. Final inspection by a HUD Roster inspector.

4. Local Health Authority well water analysis or septic report, where applicable If the property is 100% complete (existing construction less than one year old) the lender must obtain and include in the case binder submitted to HUD for insurance endorsement the following documents.

Also, the lender must retain copies of these documents in its origination case binder:

1. Builders Certification of Plans, Specifications and Site, Form HUD -92541

2. Builder's One Year Warranty, Form HUD-92544 (on high ratio loans only)

3. Wood Infestation Report, NPCA 99a and 99b

4. Local Health Authority well water analysis or septic report, where applicable.

Handbook 4155.2: 8.B.2.B
Handbook 4145.1 (Appendix 11)
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh

ML 06-33
ML 01-27
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee



REFERENCE

Handbook 4155.2: 8.B.2.B ; Handbook 4145.1 (Appendix 11); ML 06-33; ML 01-27


REFERRAL LOCATION


DISCLAIMER

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.