FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Origination/Processing (05/25/2025)

FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Origination/Processing (05/25/2025)

a. Origination/Processing (05/25/2025) i. Application Packages and Disclosures (A) Borrower Eligibility (1) Definition Borrower refers to one who applies for and receives a Loan insured under this part. The term may also include any co-maker or Co-signer or any assumptor who is obligated for the repayment of a loan obligation insured under this part. (2) Contents of the Loan Application Package The Lender must maintain all information and documentation that is relevant to its approval decision in the case binder. All information and documentation that is required in this Handbook 4000.1, and any incidental information or documentation related to these requirements, is relevant to the Lender’s approval decision. If, after obtaining all documentation required below, the Lender has reason to believe it needs additional support for the approval decision, the Lender must obtain additional explanation and documentation, consistent with information in the case binder, to clarify or supplement the information and documentation submitted by the Borrower. (a) Maximum Age of Loan Application Documents Documents used in the origination and underwriting of a Loan may not be more than 120 Days old at the Disbursement Date. Only documents whose validity for underwriting purposes is not affected by the passage of time, such as divorce decrees or Tax Returns, may be more than 120 Days old at the Disbursement Date. For counting purposes, Day one is the Day after the effective or issue date of the document, whichever is later. Appraisal Validity The 120-Day age limit applies to a property appraisal conducted in connection with loan origination. See Appraisals. The 120-Day validity period may be extended for 30 Days at the option of the Lender if needed during loan origination, pre-closing review, or claim processes. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1006 Last Revised: 11/26/2025 (b) Handling of Documents Lenders, including sponsored TPOs, must not accept or use documents relating to the employment, income, assets, or credit of Borrowers that have been handled by, or transmitted from or through, the equipment of unknown or Interested Parties, including the Borrower, the Dealer or its agent, or sponsored TPOs. The documents referred to in this section are Lender-generated direct verification documents, which are used to verify and supplement documentation submitted by the Borrower at application. These verifications are to be sent directly from the Lender to the requested responder to obtain independent, written verification of employment, income, rent, or financial accounts. (i) Information Sent to the Lender Electronically The Lender must authenticate all documents received electronically by examining the source identifiers (e.g., fax banner header or the sender’s email address) and contacting the source by telephone to verify the document’s validity. The Lender must document the name and telephone number of the individual with whom the Lender verified the validity of the document. (ii) Information Obtained via Internet The Lender must authenticate documents obtained from an Internet website and examine portions of printouts downloaded from the Internet including the Uniform Resource Locator (URL) address, as well as the date and time the documents were printed. The Lender must verify that the website exists. Documentation obtained through the Internet must contain the same information as would be found in an original hard copy of the document. (iii)Confidentiality Policy for Credit Information Lenders must not divulge sources of credit information, except as required by a contract or by law. All personnel with access to credit information must ensure that the use and disclosure of information from a credit report complies with: • Fair Housing Act, 42 U.S.C. §§ 3601–3619; • the Fair Credit Reporting Act (FCRA), Public Law 91-508; • the Privacy Act, Public Law 93-579; • the Financial Privacy Act, Public Law 95-630; and II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1007 Last Revised: 11/26/2025 • the Equal Credit Opportunity Act (ECOA), Public Law 94-239 and 12 CFR Part 202. (c) Signature Requirements for All Application Forms All Borrowers must sign and date Fannie Mae Form 1003/Freddie Mac Form 65, Uniform Residential Loan Application (URLA), and form HUD-92900-TI, HUD Addendum to the Uniform Residential Loan Application for Title I Loans. (i) The application may not be signed by any party who will not be on the Note. (ii) A Power of Attorney (POA) may not be used unless the Lender verifies and documents that all of the following requirements have been satisfied: • For military personnel, a POA may only be used when all of the following apply: o when the service member is on overseas duty or on an unaccompanied tour; o when the Lender is unable to obtain the absent Borrower’s signature on the application by mail or fax; and o where the attorney-in-fact has specific authority to encumber the Property and to obligate the Borrower. • For incapacitated Borrowers, a POA may only be used: o where a Borrower is incapacitated and unable to sign the loan application; and o where the attorney-in-fact has specific authority to encumber the Property and to obligate the Borrower. (d) Prohibition on Documents Signed in Blank Lenders are not permitted to have Borrowers sign documents in blank, incomplete documents, or blank sheets of paper. (e) Policy on Use of Electronic Signatures (i) Definition An Electronic Signature refers to any electronic sound, symbol, or process attached to or logically associated with a contract or record and executed or adopted by a person with the intent to sign the record. FHA does not accept an electronic signature that is solely voice or audio. Digital signatures are a subset of electronic signatures. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1008 Last Revised: 11/26/2025 (ii) Use of Electronic Signatures An electronic signature conducted in accordance with the Electronic Signature Performance Standards (Performance Standards) is accepted on FHA documents requiring signatures to be included in the case binder for loan insurance, unless otherwise prohibited by law. Electronic signatures meeting the Performance Standards are treated as equivalent to handwritten signatures. (iii)Electronic Signature Performance Standards The Performance Standards are the set of guidelines that govern FHA acceptance of an electronic signature. The use of electronic signatures is voluntary. However, Lenders choosing to use electronic signatures must fully comply with the Performance Standards. The Electronic Signatures in Global and National Commerce Act (ESIGN Act) Compliance and Technology A Lender’s electronic signature technology must comply with all requirements of the ESIGN Act, including those relating to disclosures, consent, signature, presentation, delivery, retention and any state law applicable to the transaction. Third Party Documents Third Party Documents refer to those documents that are originated and signed outside of the control of the Lender, such as the sales contract. FHA will accept electronic signatures on Third Party Documents included in the case binder for loan insurance endorsement in accordance with the ESIGN Act and the Uniform Electronic Transactions Act (UETA). An indication of the electronic signature and date should be clearly visible when viewed electronically and in a paper copy of the electronically signed document. Authorized Documents Authorized Documents refer to the documents on which FHA accepts electronic signatures provided that the Lender complies with the Performance Standards. • Loan Insurance Endorsement Documents: Electronic signatures will be accepted on all documents requiring signatures included in the case binder for loan insurance. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1009 Last Revised: 11/26/2025 • Servicing and Loss Mitigation Documentation: Electronic signatures will be accepted on any documents associated with servicing or loss mitigation services for FHA-insured Loans. • FHA Insurance Claim Documentation: Electronic signatures will be accepted on any documents associated with the filing of a claim for FHA insurance benefits, including form HUD-637, Title I Claim for Loss. Associating an Electronic Signature with the Authorized Document The Lender must ensure that the process for electronically signing authorized documents provide for the document to be presented to the signatory before an electronic signature is obtained. The Lender must ensure that the electronic signature is attached to, or logically associated with, the document that has been electronically signed. Intent to Sign The Lender must be able to prove that the signer certified that the document is true, accurate, and correct at the time signed. Electronic signatures are only valid under the ESIGN Act if they are “executed or adopted by a person with the intent to sign the record.” Establishing intent includes: • identifying the purpose for the Borrower signing the electronic record; • being reasonably certain that the Borrower knows which electronic record is being signed; and • providing notice to the Borrower that their electronic signature is about to be applied to, or associated with, the electronic record. Intent to use an electronic signature may be established by, but is not limited to: • an online dialog box or alert advising the Borrower that continuing the process will result in an electronic signature; • an online dialog box or alert indicating that an electronic signature has just been created and giving the Borrower an opportunity to confirm or cancel the signature; or • a click-through agreement advising the Borrower that continuing the process will result in an electronic signature. Single Use of Signature Lenders must require a separate action by the signer, evidencing intent to sign, in each location where a signature or initials are to be applied. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1010 Last Revised: 11/26/2025 This provision does not apply to documents signed by Lender employees or Lender contractors provided the Lender obtains the consent of the individual for the use of their electronic signature. The Lender must document the Borrower’s consent. Authentication - Definition Authentication refers to the process used to confirm a signer’s identity as a party in a transaction. Authentication - Standard Before a Lender reports the Loan for insurance, the Lender must confirm the identity of the signer by authenticating data provided by the signer with information maintained by an independent source. Independent sources include, but are not limited to: • national commercial credit bureaus; • commercially available data sources or services; • state motor vehicle agencies; or • government databases. The Lender must verify a signer’s name and date of birth, and either their Social Security Number (SSN) or driver’s license number. Attribution - Definition Attribution is the process of associating the identity of a signer with their signature. Attribution - Standard The Lender must maintain evidence sufficient to establish that the electronic signature may be attributed to the individual purported to have signed. The Lender must use one of the following methods, or combinations of methods, to establish attribution: • selection by or assignment to the individual of a Personal Identification Number (PIN), password, or other shared secret, that the individual uses as part of the signature process; • delivery of a credential to the individual by a trusted third party, used either to sign electronically or to prevent undetected alteration after the electronic signature using another method; • knowledge base authentication using “out of band/wallet” information; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1011 Last Revised: 11/26/2025 • measurement of some unique biometric attribute of the individual and creation of a computer file that represents the measurement, together with procedures to protect against disclosure of the associated computer file to unauthorized parties; or • public key cryptography. Credential Loss Management Lenders must have a system in place to ensure the security of all issued credentials. One or a combination of the following loss management controls is acceptable: • maintaining the uniqueness of each combined identification code and password, such that no two individuals have the same combination of identification code and password; • ensuring that identification code and password issuances are periodically checked, recalled, or revised; • following loss management procedures to electronically deauthorize lost, stolen, missing, or otherwise compromised identification code or password information, and to issue temporary or permanent replacements using suitable, rigorous controls; • using transaction safeguards to prevent unauthorized use of passwords or identification codes; or • detecting and reporting any attempts at unauthorized use of the password or identification code to the system security unit. (f) Required Documentation and Integrity of Records Lenders must ensure that they employ industry-standard encryption to protect the signer’s signature and the integrity of the documents to which it is affixed. Lenders must ensure that their systems will detect and record any tampering with the electronically signed documents. FHA will not accept documents that show evidence of tampering. If changes to the document are made, the electronic process must be designed to provide an “audit trail” showing all alterations, the date and time they were made, and identify who made them. The Lender’s system must be designed so that the signed document is designated as the Authoritative Copy. The Authoritative Copy of an electronically signed document refers to the electronic record that is designated by the Lender or holder as the controlling reference copy. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1012 Last Revised: 11/26/2025 (3) Credit Application and Initial Supporting Documentation The Lender must obtain a completed URLA (Fannie Mae Form 1003/Freddie Mac Form 65), form HUD-92900-TI, and a Notice to Borrower of HUD’s Role in Title I Loans from the Borrower prior to completion of the underwriting process. (a) Interview with Borrower The Lender must conduct a telephone or face-to-face interview with the Borrower and any co-maker or Co-signer to resolve any material discrepancies, and ensure that the information, including listed debts and obligations, is accurate and complete. (b) Dealer Certification Dealers who participate in the Borrower’s purchase of a Manufactured Home must sign the certification on the last page of form HUD-92900-TI. (c) Credit Application Name Requirements (i) Standard All credit applications must be executed in the legal names of one or more individuals on the application. Credit applications from a corporation, partnership, sole proprietorship, nonprofit or trust (including living or non-revocable trusts) are not permitted under Title I. (ii) Required Documentation The Lender must include a statement that it has verified the Borrower’s identity using a valid government-issued photo identification at or prior to closing the Loan, or the Lender may choose to include a copy of such photo identification as documentation. (4) Borrower’s Authorization The Lender must obtain the Borrower’s authorization to verify the information needed to process the loan application. (5) Borrower’s Authorization for Use of Information Protected under the Privacy Act (a) Standard The Lender must obtain the Borrower’s consent for use of the Borrower’s information for any purpose relating to the origination, servicing, loss II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1013 Last Revised: 11/26/2025 mitigation, and disposition of the Loan or, if applicable, the Property securing the Loan, and relating to any insurance claim and ultimate resolution of such claims by the Lender and FHA. (b) Required Documentation The Lender must obtain a signed statement from the Borrower that clearly expresses the Borrower’s consent for the use of the Borrower’s information as required above. (6) Sales Contract and Required Documentation (a) Standard The Lender must not originate an insured Loan for the purchase of a Property if any provision of the sales contract violates FHA requirements. An addendum or modification may be used to remove or correct nonconforming provisions. The Lender must ensure (1) all purchasers listed on the sales contract are Borrowers, and (2) all Borrowers sign the sales contract. (b) Required Documentation The Lender must obtain a complete copy of the sales contract including any modifications or revisions agreed upon by buyer and seller. (c) Property Appraisal The Borrower must receive a copy of the property appraisal when an appraisal is required for FHA insurance endorsement. When an appraisal report is required, the Lender must give the Borrower a copy of the property appraisal report at least three Days prior to loan closing. A property appraisal is not required in connection with: • purchase of a New Manufactured Home; or • refinance of an FHA-insured Loan that secures a Manufactured Home. (B) Disclosures and Legal Compliance The Lender must provide or ensure the Borrower is provided with the following disclosure. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1014 Last Revised: 11/26/2025 (1) Notice to Borrower of HUD’s Role in Title I Loans (a) Standard The Lender must provide a written notice to clearly inform each Borrower that the Loan will be insured against Default by HUD and about the actions that HUD will take to collect the Loan if the Borrower defaults. This notice also serves to document the Borrower’s agreement to pay any penalties and administrative costs that may be assessed by HUD. (b) Required Documentation – Borrower Acknowledgment The Lender must have each Borrower sign a copy of the notice at loan application. The copy signed by the Borrower(s) must be retained in the case binder. (c) Required Documentation – Wording of the Notice The Lender must prepare the notice on the Lender’s letterhead. The notice must read as follows: You have applied for a manufactured home loan that is to be insured by the Department of Housing and Urban Development. If you fail to repay this lender as agreed, we may foreclose or repossess the home or other property securing this loan and sell it. It is important for you to understand that the value of the property at the time of repossession/foreclosure may be less than the unpaid balance on your loan, leaving you liable for the difference. After your property is sold, we may assign the remaining debt to HUD for collection. Failure to pay this debt to HUD may result in offset of Federal payments due you (including Federal income tax refunds, Social Security benefit payments, and Federal employee wages or retirement) or may result in the administrative garnishment of your wages. In addition, failure to pay may result in the referral of the debt for collection to the Department of Justice, to the Department of Treasury, or to private collection agencies. In addition to principal and interest on the debt, you will be liable for the payment of any penalties or administrative costs that may be imposed by HUD as authorized by Section 3717 to Title 31 of the United States Code. Your signature below indicates that you have read and understand this notice, and that you consent to pay any penalties, administrative costs, and interest that may be assessed by HUD. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1015 Last Revised: 11/26/2025 (2) Compliance with All Applicable Laws, Rules, and Requirements The Lender must comply with all laws, rules, and requirements applicable to the loan transaction, including full compliance with the requirements applicable to the following under the purview of the Consumer Financial Protection Bureau (CFPB): • Truth in Lending Act (TILA) • Real Estate Settlement Procedures Act (RESPA) • the FCRA and the ECOA, as implemented by Regulation B (12 CFR Part 1002) (3) Nondiscrimination Policy The Lender must fully comply with all applicable provisions of nondiscrimination and equal opportunity laws, regulations, and contract provisions including, but not limited to: • Fair Housing Act, 42 U.S.C. §§ 3601–3619; • the FCRA, 15 U.S.C. §§ 1681a‒1681x; and • the ECOA, 15 U.S.C. §§ 1691a‒1691f. The Lender must make all determinations with respect to the adequacy of the Borrower’s income in a uniform manner without regard to race, color, religion, sex, age, national origin, familial status, disability, marital status, receipt of public assistance, because an applicant has in good faith exercised any right under the Consumer Credit Protection Act, or location of the Property. (C) Application Document Processing The Lender must order the FHA case number and perform any associated tasks performed directly in FHA Connection (FHAC). The Lender may use nonemployees in connection with its origination of FHA-insured Loans only as described below. The Lender ultimately remains responsible for the quality of the Loan and strict compliance with all applicable FHA requirements, regardless of the Lender’s relationship to the person or entity performing any particular service or task. (1) Sponsored Third-Party Originator The Title I Lender is responsible for dictating the specific application and processing tasks to be performed by the sponsored TPO. Only HUD-approved Lenders/Mortgagees acting in the capacity of a sponsored TPO may have direct access to FHAC. (2) Dealer The Lender is responsible for approving and monitoring a Dealer and dictating the specific application and processing tasks that the Dealer performs. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1016 Last Revised: 11/26/2025 (3) Contract Service Providers A Lender may use qualified contractors to perform the administrative and clerical loan processing functions, provided the contractors do not have an interest in the transaction. These contractors perform the following functions: typing loan documents, mailing out and collecting verification forms, ordering credit reports, and/or preparing for endorsement and shipping Loans to Investors. (4) Excluded Parties The Lender may not contract with entities or persons that are suspended, debarred, or otherwise excluded from participation in HUD programs, or under a Limited Denial of Participation (LDP) that excludes their participation in FHA programs. The Mortgagee must ensure that no sponsored TPO or contractor engages such an entity or person to perform any function relating to the origination of an FHA-insured Mortgage. The Lender must check the System for Award Management (SAM) and must follow appropriate procedures defined by that system to confirm eligibility for participation. (5) Underwriter Qualifications HUD does not approve nor require Direct Endorsement certification for Title I underwriters. Title I Lenders approve the underwriter based on demonstrated capabilities and knowledge in loan underwriting. The Lender must register each underwriter in FHAC. By registering the underwriter in FHAC, the Lender certifies that the underwriter meets the necessary qualifications to underwrite Title I Manufactured Home Loans. The underwriter must be a full-time employee of the Lender. (D) Initial Document Processing The Lender begins processing the Loan by obtaining the URLA (Fannie Mae Form 1003/Freddie Mac Form 65) and form HUD-92900-TI. (E) Case Number Assignment A Lender reports all prospective Title I Manufactured Home Loans to HUD via the “Case Number Assignment” screen on the FHAC portal web site. The information required on this screen includes general loan information, and information about the Borrower, the home unit and the home site. Once the Lender’s submission passes all data entry validations, it is accepted for overnight processing. This process verifies the submitted data against a series of system validations. Once completed, the system will issue a Title I case number that will be specific to the loan II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1017 Last Revised: 11/26/2025 transaction. The system will advise the Lender if additional information is required or if corrections are needed. (1) Case Numbers on Sponsored Originations The Lender will not be able to order case numbers for sponsored originations unless their sponsored TPO has been registered in FHAC. (2) Canceling a Case Number The Lender may cancel FHA case numbers in FHAC under the following circumstances: • an appraisal has not been completed and the Borrower will not close the loan as an FHA-insured Loan; • the FHA insurance will not be sought; or • the appraisal has already expired. ii. Manufactured Home Loan Eligibility and Purpose (A) Definition Manufactured Home Loan refers to a Loan for the purchase or refinancing of a Manufactured Home and/or the lot on which to place such home. Unless otherwise indicated, the term includes Manufactured Home Purchase Loans, Manufactured Home Lot Loans, and Combination Loans. Manufactured Home Purchase Loan refers to a Loan for the purchase or refinancing of a Manufactured Home exclusive of any lot or site, and may also include a garage, patio, carport, or other comparable appurtenance. A Combination Loan refers to a Loan made for the purchase or refinancing in a single transaction of a Manufactured Home and a manufactured home lot, and may also include a garage, patio, carport, or other comparable appurtenance. (B) Standard The loan proceeds may be used for the following loan types and purposes. (1) Manufactured Home Loan A Manufactured Home Loan is used to purchase or refinance a Manufactured Home unit. (2) Manufactured Home Lot Loan A Manufactured Home Lot Loan is used to purchase a parcel of real estate to be used as the site for the placement of a Manufactured Home unit. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1018 Last Revised: 11/26/2025 (3) Combination Loan (Manufactured Home and Lot) A Combination Loan is used to purchase or refinance a Manufactured Home unit and a parcel of real estate to be used as the site for the placement of a Manufactured Home unit. (C) Refinance A refinance transaction establishes a new Loan to pay off the existing debt for a Borrower with legal title to the subject Property. The refinance Loan may also advance additional funds for the purchase of a home or lot, which is also referred to as a Combination Loan. (D) General Borrower Eligibility Requirements In order to obtain FHA-insured financing, all Borrowers must meet the eligibility criteria in this section. A party who has a financial interest in the loan transaction, such as the seller, builder or real estate agent, may not be a co-Borrower or a Co-signer. Exceptions may be granted when the party with the financial interest is a Family Member. (1) Social Security Number (a) Standard Each Borrower must provide evidence of their valid Social Security Number (SSN) to the Lender. Individuals employed by the World Bank, a foreign embassy, or equivalent employer identified by HUD are not required to provide an SSN. (b) Required Documentation The Lender must: • validate and document an SSN for each Borrower, co-Borrower, or Co-signer on the Loan by: o entering the Borrower’s name, date of birth, and SSN in the Borrower/address validation screen through FHAC; o examining the Borrower’s original pay stubs; IRS Form W-2s, Wage and Tax Statement; valid Tax Returns obtained directly from the Internal Revenue Service (IRS); or other document relied upon to underwrite the Loan; and • resolve any inconsistencies or multiple SSNs for individual Borrowers that are revealed during loan processing and underwriting using a service provider to verify the SSN with the Social Security Administration (SSA). II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1019 Last Revised: 11/26/2025 (2) Borrower Age Limits The Borrower must be old enough to enter into a loan Note that can be legally enforced in the state, or other jurisdiction, where the Property is located. There is no maximum age limit for a Borrower. (3) Occupancy The Borrower must own and occupy the Manufactured Home as a Principal Residence. Non-Occupant Borrowers are not permitted unless there is proof that they are exempted due to military service with overseas assignments. (4) Borrower and Co-Borrower Ownership and Obligation Requirements To be eligible, all Borrowers and co-Borrowers must take title to the Property at settlement, be obligated on the Note or credit instrument, and sign all security instruments. Not all individuals with an interest in the Property are required to be Borrowers. However, the Loan must be executed by all parties necessary to make the lien valid and enforceable under state law. (5) Military Personnel Eligibility (a) Standard Borrowers who are military personnel, who cannot physically reside in a Property because they are on Active Duty, are still considered Owner- Occupant Borrowers and are eligible for maximum financing if a Family Member of the Borrower will occupy the subject Property as their Principal Residence, or the Borrower intends to occupy the subject Property upon discharge from military service. (b) Required Documentation The Lender must obtain a copy of the Borrower’s military orders evidencing the Borrower’s Active Duty status and that the duty station is more than 100 miles from the subject Property. The Lender must obtain the Borrower’s intent to occupy the subject Property upon discharge from military service. (6) Citizenship and Immigration Status U.S. citizenship is not required for loan eligibility. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1020 Last Revised: 11/26/2025 (7) Residency Requirements The Lender must determine the residency status of the Borrower based on information provided on the loan application and other applicable documentation. In no case is a Social Security card sufficient to prove immigration or work status. (a) Permanent Residents (i) Standard A Borrower with lawful permanent resident status may be eligible for FHA-insured financing provided the Borrower satisfies the same requirements, terms, and conditions as those for U.S. citizens. (ii) Required Documentation The case binder must include evidence of the permanent residency and indicate that the Borrower is a lawful permanent resident on the URLA (Fannie Mae Form 1003/Freddie Mac Form 65). The U.S. Citizenship and Immigration Services (USCIS) within the Department of Homeland Security provides evidence of lawful, permanent residency status. (b) Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau (i) Standard A Borrower with citizenship in the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau may be eligible for FHA-insured financing provided the Borrower satisfies the same requirements, terms, and conditions as those for U.S. citizens. (ii) Required Documentation For Borrowers who are citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau, the case binder must include evidence of such citizenship. (c) Non-U.S. Citizens without Lawful Residency Non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured Loans. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1021 Last Revised: 11/26/2025 (8) Borrower Ineligibility due to Delinquent Federal Non-tax Debt (a) Standard Lenders are prohibited from processing an application for an FHA-insured Loan for Borrowers with delinquent federal non-tax debt, including deficiencies and other debt associated with past FHA-insured Mortgages or Loans. Lenders are required to determine if the Borrowers have delinquent federal non-tax debt. Lenders may obtain information on delinquent Federal Debts from public records, credit reports or equivalent, and must check all Borrowers against the Credit Alert Verification Reporting System (CAIVRS). (b) Verification If a delinquent Federal Debt is reflected in a public record, credit report or equivalent, or CAIVRS or an Equivalent System, the Lender must verify the validity and delinquency status of the debt by contacting the creditor agency to whom the debt is owed. If the debt was identified through CAIVRS, the Lender must contact the creditor agency using the contact phone number and debt reference number reflected in the Borrower’s CAIVRS report. If the creditor agency confirms that the debt is valid and in delinquent status as defined by the Debt Collection Improvement Act of 1996, then the Borrower is ineligible for an FHA-insured Loan until the Borrower resolves the debt with the creditor agency. The Lender may not deny a Loan solely on the basis of CAIVRS information that has not been verified by the Lender. If resolved either by determining that the information in CAIVRS is no longer valid or by resolving the delinquent status as stated above, the Lender may continue to process the loan application. (c) Resolution In order for a Borrower with verified delinquent Federal Debt to become eligible, the Borrower must resolve their federal non-tax debt in accordance with the Debt Collection Improvement Act of 1996. The creditor agency that is owed the debt can verify that the debt has been resolved in accordance with the Debt Collection Improvement Act. (d) Required Documentation The Lender must include documentation from the creditor agency to support the verification and resolution of the debt. For debt reported through CAIVRS, the Lender may obtain evidence of resolution by obtaining a clear CAIVRS report. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1022 Last Revised: 11/26/2025 (9) Eligibility Period for Borrowers Delinquent on FHA-insured Loans If a Borrower is currently Delinquent on an FHA-insured Loan, they are ineligible for insurance on a new FHA Loan unless the delinquency is resolved. (10) Delinquent Federal Tax Debt (a) Standard Borrowers with delinquent Federal Tax Debt are ineligible. Tax liens may remain unpaid if the Borrower has entered a valid repayment agreement with the federal agency owed to make regular payments on the debt, and the Borrower has made timely payments for at least three months of scheduled payments prior to the date of application. The Borrower cannot prepay scheduled payments in order to meet the required minimum of three months of payments. The Lender must include the payment amount in the agreement in the calculation of the Borrower’s Debt-to-Income (DTI) ratio. (b) Verification Lenders must check public records and credit information to verify that the Borrower is not presently delinquent on any Federal Debt and does not have a tax lien placed against their Property for a debt owed to the federal government. (c) Required Documentation The Lender must include documentation from the IRS evidencing the repayment agreement and verification of payments made, if applicable. (11) Valid First Liens (a) Standard The Borrower must be able to provide a valid first lien on the Property securing the debt. The Lender must ensure that the Property will be free and clear of all liens other than for the FHA-insured Manufactured Home Loan. (b) Consent of Non-purchasing Spouses If it is necessary to perfect a valid first lien under state law, the Lender must require a non-purchasing spouse to execute either the security instrument or documentation indicating that they are relinquishing all rights to the Property. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1023 Last Revised: 11/26/2025 (c) Required Documentation The lien must be documented in the case binder by a Lender or deed of trust, executed by the Borrower and in Fee Simple. (12) Eligibility Requirements for Living Trusts (a) Property Held in Living Trusts The Lender must not originate a Title I Manufactured Home Loan for a Property held by the Living Trust. (b) Living Trusts and Security Instruments The security instrument, such as a Loan or deed of trust, must not name a Living Trust as property owner. The individual borrower name(s) must appear on the security instrument, property deed, and title. (E) Excluded Parties (1) Borrower (a) Standard Borrowers with a new Loan or assumption are not eligible to participate in FHA-insured loan transactions if they are suspended, debarred, or otherwise excluded from participating in HUD programs. Exception Establishing Excluded Parties is not required for an existing Borrower being evaluated under Loss Mitigation Tools. (b) Required Documentation The Lender must check the HUD LDP List to confirm the Borrower’s eligibility to participate in an FHA-insured loan transaction. The Lender must check SAM and must follow appropriate procedures defined by that system to confirm eligibility for participation. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1024 Last Revised: 11/26/2025 (2) Other Parties to the Transaction (a) Standard A Loan is not eligible for FHA insurance if anyone participating in the loan transaction is found on HUD’s LDP List or in SAM. This may include but is not limited to: • Borrower • seller (except where selling the Principal Residence) • Dealer or retailer • listing or selling real estate agent • loan officer • loan processor • underwriter • Appraiser • broker (b) Required Documentation The Lender must check the HUD LDP List and SAM, and must follow appropriate procedures defined by that system to confirm eligibility for participation. (3) FHA Policy Limiting the Number of Title I Manufactured Home Loans per Borrower (a) Standard A Borrower with an existing FHA-insured Manufactured Home Loan may not obtain an additional FHA-insured Manufactured Home Loan with Title I insurance. A Borrower with an existing FHA-insured Manufactured Home Loan may obtain a Title I FHA-insured Property Improvement Loan. (b) Required Documentation Each Borrower purchasing a Manufactured Home must sign form HUD-56002-MH, Placement Certificate for Manufactured Home, to certify that the Property will be the Borrower’s Principal Residence. The Lender must review the URLA (Fannie Mae Form 1003/Freddie Mac Form 65), form HUD-92900-TI, and other loan documents to assess if the Borrower owns property other than Property associated with the transaction. If the Borrower owns other property, the URLA must identify the property II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1025 Last Revised: 11/26/2025 address, expenses for debt, taxes and insurance, and its use as either a Secondary Residence or for investment. (F) Occupancy Types (1) Principal Residence (a) Definition A Principal Residence refers to a dwelling where the Borrower maintains or will maintain their permanent place of abode, and which the Borrower typically occupies or will occupy for the majority of the calendar year. A person may have only one Principal Residence at any one time. (b) Standard (i) FHA Requirement for Establishing Owner Occupancy All Borrowers must occupy the Property within 60 Days of signing the security instrument. (ii) FHA Insurance on a Principal Residence FHA will not insure a Manufactured Home Loan if it is determined that the transaction was designed to use FHA loan insurance as a vehicle for obtaining Investment Properties, even if the Property to be insured will be the only one owned using FHA loan insurance. (2) Secondary Residence (a) Definition A Secondary Residence refers to a Structure that a Borrower occupies in addition to their Principal Residence, but less than a majority of the calendar year. A Secondary Residence does not include a Vacation Home. (b) Standard Secondary Residences are not permitted under the Title I Manufactured Home Loan program. (3) Investment (a) Definition An Investment Property refers to a Property that is not occupied by the Borrower as a Principal or Secondary Residence. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1026 Last Revised: 11/26/2025 (b) Standard Investment Properties are not permitted under the Title I Manufactured Home Loan program. (G) General Property Eligibility (1) Eligible Geographic Locations The Property must be located within the U.S., Puerto Rico, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, or American Samoa. (2) Restrictions on Property Locations within Coastal Barrier Resources System In accordance with the Coastal Barrier Resources Act, a Property is not eligible for FHA loan insurance if the improvements are in or are proposed to be located within the Coastal Barrier Resources System (CBRS). (3) Hazard Insurance (a) Standard Hazard insurance is required for all Manufactured Homes and must be maintained for the life of the insured Loan. Hazard insurance is not required for FHA-insured Loans that secure a lot. The minimum amount of insurance must be the greater of the unpaid balance due on the Title I Loan or the actual value of the home where state law precludes a higher amount. The Lender must be named as the loss payee. (b) Lender Responsibilities If during the lender term the Borrower does not maintain the required hazard insurance, the Lender must obtain the insurance and may pass on the expense to the Borrower. The Lender assumes the risk and potential costs on a Property that is not insured in compliance with the above requirements. (c) Required Documentation The Lender must maintain a copy of the Declarations page throughout the life of the Loan. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1027 Last Revised: 11/26/2025 (4) Special Flood Hazard Areas The Lender must determine if a Property is located in a Special Flood Hazard Area (SFHA) as designated by the Federal Emergency Management Agency (FEMA). The Lender must obtain flood zone determination services, independent of any assessment made by the Appraiser, to cover the Life of the Loan Flood Certification. Flood Insurance is required when any portion of the home site or residential improvement including Structures or equipment essential to the value is located in an SFHA identified by FEMA using the Life of the Loan Flood Certification and must be maintained for the life of the insured Loan. A Property is not eligible for FHA insurance if a home site on which a Manufactured Home is placed is: • located within SFHA Zone V, a Coastal High Hazard Area; or • located within SFHA Zone A and insurance under the National Flood Insurance Program (NFIP) is not available in the community; or • proposed to be located within a CBRS. A Property may be eligible for FHA insurance if a home site on which the Manufactured Home is placed is located in an SFHA if: • a FEMA issued Letter of Map Amendment (LOMA) or Letter of Map Revision (LOMR) removes the Property from the SFHA; or • a FEMA NFIP Elevation Certificate (FEMA Form FF-206-FY-22-152) shows the finished grade beneath the Manufactured Home is at or above the 100-year return frequency flood elevation. To be eligible for FHA insurance, a Property located in an SFHA must be in a community that participates in the NFIP and has NFIP available, regardless of whether the Borrower obtains NFIP coverage. (5) Flood Insurance (a) Standard Flood Insurance is required if the Property to be improved is secured and is located in a FEMA designated flood hazard area. The amount of insurance must be no less than the unpaid balance due on the Title I Loan, and the Lender must be named as the loss payee. Prior to closing, Lenders must inform Borrowers of the requirement to have or obtain adequate Flood Insurance as a condition of closing for Properties where II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1028 Last Revised: 11/26/2025 any portion of the dwelling and related Structures or equipment essential to the Property Value is located in an SFHA. Flood Insurance must be maintained for the life of the insured Loan. (b) Required Documentation The Lender must obtain the Life of the Loan Flood Certification indicating whether or not the home site is located within an SFHA. When the home site is located in an SFHA, the Lender must provide HUD a copy of the pages from the Flood Insurance policy showing the coverage amount required and reflecting the Lender as the loss payee. (i) Requirements for Private Flood Insurance If the Borrower purchases a Private Flood Insurance (PFI) policy in lieu of an NFIP policy, the Mortgagee must ensure the PFI policy meets the following requirements: • is issued by an insurance company that is licensed, admitted, or otherwise approved to engage in the business of insurance in the state or jurisdiction in which the Property to be insured is located, by the insurance regulator of the state or jurisdiction; or, in the case of a policy of difference in conditions, multiple peril, all risk, or other blanket coverage insuring nonresidential commercial property, is recognized, or not disapproved, as a surplus lines insurer by the insurance regulator of the state or jurisdiction where the Property to be insured is located; • provides Flood Insurance coverage that is at least as broad as the coverage provided under a standard Flood Insurance policy under the NFIP for the particular type of Property, including when considering exclusions and conditions offered by the insurer; • includes deductibles that are no higher than the specified maximum, and includes similar nonapplicability provisions, as under a standard Flood Insurance policy under the NFIP; • includes a requirement for the insurer to provide written notice 45 Days before cancellation or nonrenewal of Flood Insurance coverage to the Borrower and the Mortgagee. In cases where the Mortgagee has assigned the loan to HUD, the insurer must provide notice to HUD and, where applicable, to the Borrower; • includes information about the availability of Flood Insurance coverage under the NFIP; • includes a mortgage interest clause similar to the clause contained in a standard Flood Insurance policy under the NFIP; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1029 Last Revised: 11/26/2025 • includes a provision requiring the Borrower to file suit no later than one year after the date of a written denial for all or part of a claim under the policy; and • contains cancellation provisions that are as restrictive as the provisions contained in a standard Flood Insurance policy under the NFIP. (ii) Private Flood Insurance Policy Compliance Aid Definition The Private Flood Insurance (PFI) Policy Compliance Aid is the statement: “This policy meets the definition of private flood insurance contained in 24 CFR 203.16a(e) for FHA-insured mortgages.” Standard The PFI Policy Compliance Aid may be made by the insurance provider, attesting that a PFI policy meets the requirements of Flood Insurance. The Mortgagee may rely on the PFI Policy Compliance Aid to determine whether a PFI policy meets the Flood Insurance requirements. A Mortgagee may not reject a policy solely because it is not accompanied by a PFI Policy Compliance Aid.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Origination/Processing (05/25/2025) · source URL · snapshot 8c03836f77f317e1