In October, HUD approved the Sun City Recreation Center fee at transfer of title ($3,500) as an acceptable transfer fee in that the funds go to the benefit of the property owner.
While this was good news in terms of HUD’s underwriting guidelines 12 CFR 1228, it did not address WeMAR’s concerns regarding Free Assumability (203.41.5.b and 203.41.5.c.2).
You may read the WeMAR letter to HUD regarding this issue.
This week, we receive a response from HUD. You may read HUD’s response. It would appear that HUD will insure FHA mortgages with mandatory fees at change of title under special conditions granted in the Housing Opportunity Through Modernization Act (2016).
Your buyer may want to verify with their lender that their FHA purchase or reverse mortgage will meet FHA underwriting guidelines if the home is part of an association with mandatory fees at change of title. In their response, HUD did confirm that Free Assumability has not changed.
According to the letter, HUD is seeking to issue some form of guidance to FHA stakeholders in the future.