In other words, if a borrower is forced to go to a hospital for more than 12 consecutive months and there is not still one original borrower remaining in the home (not a family member, but a borrower who is on the loan), then the loan shall become Due and Payable and must be paid in full at that time. The Security Instrument for the Home Equity Conversion Mortgage ( in California it would be a Deed of Trust), states specifically that if the Property ceases to be the principal residence of at least one of the original borrowers during a period of 12 consecutive months after closing due to mental or physical illness, then there are grounds for acceleration of the debt (it can be called Due and Payable). That could be a disaster.The question about the extended vacation is the one that gets into the gray area Will this proceed as provided by my insurance company (one check now, another upon contract with the roofer and then my deductible) or do they insert themselves in this process? I have more than 20 pages of documents ready to go and they insist I endorse the check and send it to them. I'm also likely to have to wait well into next year to move forward because of their delays. I'm out the insurance premiums every year and the deductible. What do they have to do with it if they encourage upkeep? It's not costing them a cent and of more benefit to them than to us. Also noted all sorts of details about periodic inspections of the work and payments in thirds. Now I have to endorse the check, send it to the management company for the HECM loan and wait. However, payees are myself, my wife and department of HUD. Insurance company adjuster's report and reputable roofing company estimate in hand and received first partial check. I'm out the deductible, but ready to move forward. Accumulated wind damage over the years resulted in a new roof claim. If the home has been unoccupied for more than 30 days (and does not meet one of the conditions noted above) the lender’s underwriter must decide if an inspection of the system is necessary. In those instances, the appraiser is to condition for an inspection by the local health authority, a licensed sanitation, or an individual determined to be qualified by the DE Underwriter and a certification that the system is operating satisfactorily. Individual sewage system inspections are only required if there is evidence of system failure if mandated by state or local jurisdiction if customary to the area, or at the lender’s discretion. This includes numerous types of sewage systems including cesspools, individual pit privies, and mound systems. Individual Sewage Systems: For properties that cannot connect to a public system and are served by an individual sewage system that is acceptable to the local health authority, the system is then acceptable to HUD/FHA. The lender is responsible to ensure the community system(s) are licensed and adequate to service the property. The appraiser must note on the appraisal report the name of the community system(s). If a connection to a public system is not feasible, the property may be served by an individual sewage (septic) system or a community system.Ĭommunity Sewer System: HUD no longer maintains a list of approved systems. Then you can also put specific questions into the search box located on the first page of the HUD website and as an example, “What are FHA’s requirements for septic and sewer systems?”įHA’s requirements for septic and sewer systems?įHA requires that a property be connected to a public sewer system if feasible. Not all lenders will do everything that HUD states, HUD’s guidelines are a starting point since they are the absolute minimum that must be met to receive the insurance on the loan. You have to remember that these are HUD’s minimum requirements and lenders can and often do have “overlays” to HUD guidelines for specific circumstances. With regard to the reverse mortgage program, you have to be sure that you review the HUD general requirements and anything that may pertain to your property in particular in the HECM handbook (and then if that isn’t bad enough, they also issue Mortgagee Letters that sometimes deal with property requirements).Ĭhapter 4 of the HUD Manual 4155.2 ( )will give you some information about appraisal and property specifics but if you need to drill down further, you may need to consult the HUD appraisal manual 4150.2 The only problem as you alluded to above, is that HUD has several sources that all deal with property requirements. If you would like to read and check the items that you feel would and would not pertain to your circumstances, you can go to the HUD website at to review their various manuals.
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