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Financial Services Law Insights and Observations

HUD issues mortgagee letter extending interim procedures relating to FHA Section 232 approved mortgages

Federal Issues Covid-19 HUD Mortgages FHA Third-Party

Federal Issues

On July 31, 2020, the U.S. Department of Housing and Urban Development issued Mortgagee Letter 2020-25, which extends interim procedures regarding site access issues related to Section 232 mortgage insurance applications during the Covid-19 pandemic (previously covered here). The guidance provides temporary modifications pertaining to third-party site inspections for Section 232 FHA-insured healthcare facilities with effective dates within 60 days of the issuance of the mortgagee letter. The letter also provides guidance on other aspects relating to Section 232 properties, including regarding Property Capital Needs Assessments, appraisals, Section 232 Phase 1 Environmental Site Assessments, asbestos surveys, and radon testing, among other things.