FHA Issues Final Rule Streamlining Home Warranty Requirements

Filed in Codes and Standards, Housing Finance by on December 17, 2018 0 Comments

regulationsThe Federal Housing Administration (FHA) on Dec. 14 published in the Federal Register a final rule that would streamline the home warranty requirements for FHA single-family mortgage insurance.

The rule would eliminate the regulations that require borrowers to purchase 10-year protection plans in order to qualify for certain mortgages on newly-constructed single-family homes.

This action conforms with changes made by the Housing and Economic Recovery Act of 2008.

The final rule also allows consumers who opt to purchase warranties to be able to choose from the entire market of warranty providers, not just those approved by HUD.

HUD, however, is retaining the requirement that the Warranty of Completion of Construction be executed by the builder and the buyer of a new construction home, as a condition for FHA mortgage insurance.

This final rule becomes effective March 14, 2019.

For more information, contact Curtis Milton at 800-368-5242 x8597.

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