Industry win: HUD announces credit union-supported FHA changes

Removing barriers for consumers to obtain mortgages through the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD) updated FHA quality control requirements to allow greater flexibility and alternatives to appraisal field reviews. The new provisions took effect immediately when released in a Mortgagee Letter Tuesday.  

The change was requested by America’s Credit Unions and other organizations in a joint trades letter sent last month. It removes the requirement for mortgage lenders, including credit unions, to obtain appraisal field reviews on at least 10 percent of origination and underwriting quality control reviews. 

 
The change will make field reviews optional for appraisal quality control, maintain FHA’s core appraisal compliance framework, and give lenders the ability to tailor their review methods on a case-by-case-specific risk.  The removal will also reduce appraisal costs for credit unions while encouraging participation in FHA programs. 

It follows the Promoting Access to Mortgage Credit Executive Order, aligning the FHA's standards with those adopted by the Department of Veterans Affairs and the overall mortgage industry.