FHA expands its definition of Government-Sponsored Enterprises (GSEs)

Federal Issues HUD FHFA GSEs Mortgages

Recently, HUD issued Mortgagee Letter 2024-12, updating its regulations to redefine Government-Sponsored Enterprises (GSEs) as separate from other governmental institutions with respect to FHA requirements for specific loan and mortgage origination activities. Acknowledging that GSEs do not have the infrastructure to comply with FHA origination requirements due to the nature of their lending activities, HUD has exempted GSEs from those specific FHA rules. After a period of public comment, on April 23 HUD published the final rule in the Federal Register, which amends regulations in 24 CFR Parts 202 and 5. The update also clarifies the definition of “Investing Mortgagee” to specify that it is not approved as a Supervised Mortgagee, a Nonsupervised Mortgagee, or a Government Mortgagee. These changes have also been incorporated into HUD Handbook 4000.1.