13-28 Ml

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSINGFEDERAL HOUSING COMMISSIONER

Date:

September 3, 2013

To:

All Approved Mortgagees

Mortgagee Letter 2013-28
Subject

Home Equity Conversion Mortgage (HECM) Financial Assessment and
Property Charge Guide

Purpose

This Mortgagee Letter and the attached HECM Financial Assessment and
Property Charge Guide provide parameters for the required financial
assessment that mortgagees must complete prior to approval of an FHAinsured HECM as announced in Mortgagee Letter 2013-27.

Effective Date

This guidance is effective for HECM case numbers assigned on or after
January 13, 2014.

Affected Topic

The requirements set forth in this Mortgagee Letter supplement and, where
they conflict, replace HUD Handbook 4235.1 REV-1 and 4330.1 REV-5.

Summary

Mortgagees must perform a financial assessment of all prospective
mortgagors on all HECM transaction types, i.e., traditional, refinance, and
purchase.
Mortgagees must refer to the attached HECM Financial Assessment and
Property Charge Guide for specific requirements regarding:




performing the credit history analysis.
performing the cash flow/residual income analysis;
documenting and verifying credit, income, assets and property charges;
Continued on next page

www.hud.gov

espanol.hud.gov

2

Mortgagee Letter 2013-28, Continued
Summary
(continued)






evaluating extenuating circumstances and compensating factors
evaluating the results of the financial assessment in determining eligibility
for the HECM;
determining if funding sources for property charges from HECM proceeds
will be required; and
completing a HECM financial assessment worksheet.

Information
Collection

The information collection requirements contained in this document have
been approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB
control number 2502-0524, 2502-0429, and 2505-0059. In accordance with
the Paperwork Reduction Act, HUD may not conduct or sponsor, and a
person is not required to respond to, a collection of information unless the
collection displays a currently valid OMB control number.

Questions

Please address any questions about the topics addressed in this Mortgagee
letter to the FHA Call Center at 1-800-CALLFHA. Persons with hearing or
speech impairments may reach this number via TTY by calling the Federal
Information Relay Service at 1-800-877-8339. For additional information on
this Mortgagee Letter, please visit www.hud.gov/answers.

Signature

Carol J. Galante
Assistant Secretary for Housing-Federal Housing Commissioner

Attachment