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FHA Revises Policy for Disbursement of Funds for Reserve for Replacement Accounts
The Office of Multifamily Housing recently published Housing Notice 2022-04/Mortgagee Letter 2022-12, introducing its new policy for delegating the process for approving borrowers' requests for disbursement of funds from Reserve for Replacement (RfR) accounts to lenders.
The Office of Multifamily Housing recently published Housing Notice 2022-04/Mortgagee Letter 2022-12, introducing its new policy for delegating the process for approving borrowers' requests for disbursement of funds from Reserve for Replacement (RfR) accounts to lenders. The Policy provides two options available to lenders in the review of borrower distribution requests, Full Delegation, and Partial Delegation. Full Delegation enables lenders to take full responsibility for reviewing and approving borrowers' requests for disbursements. Partial Delegation would enable lenders to review and recommend requests for approval by HUD.
HUD is currently limiting this delegation to certain properties in its portfolio as outlined in Section IV of the HN/ML. While this policy is effective immediately, lenders will need to seek and obtain approval prior to conducting delegated reviews of HUD-9250 RfR disbursement requests. The process for obtaining approval is outlined in Section III of the HN/ML.
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