U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner recently announced the Federal Housing Administration (FHA) is rescinding more than 12 sub-regulatory policies under its Single-Family mortgage insurance program.

These changes aim to cut red tape, help reduce the cost of homeownership and eliminate financial and regulatory burdens, according to HUD. The rescissions span the loan origination process from the point of mortgage application submission through FHA’s issuance of an insurance endorsement on the mortgage.

“These rescissions are bold, necessary, and long overdue,” Turner said in a release. “Under President Trump’s leadership, we’re slashing red tape that drives up costs and shuts families out of the market. Every hardworking American deserves a fair shot at owning a home – the American Dream should never be buried under a pile of regulations. These changes open doors for families and lenders, unlocking opportunities nationwide.”

These policy retractions, executed through a series of Mortgagee Letters, eliminate policies that directly or indirectly increase the cost of homeownership for aspiring first-time buyers.

Specifically, the FHA:

• Rescinded what it called outdated and costly appraisal protocols. “By removing antiquated and burdensome procedural steps that an appraiser must complete during each assignment, FHA is better aligning its appraisal policies with industry standards and reducing unnecessary costs and delays that are passed through to homebuyers,” the FHA stated. “During the first Trump administration, HUD made targeted technology investments through FHA Catalyst that have substantially improved FHA’s collateral valuation analytics. As a result, FHA is now able to extend the benefit of these investments to borrowers, lenders, and taxpayers in the form of streamlined appraisal procedures, lower costs, and quicker turn times.”
• Rescinded its full-time employment requirement for direct endorsement underwriter eligibility and now allows part-time employment.
• Rescinded the Supplemental Consumer Information Form (SCIF) collection requirement for lenders.
• Rescinded the Federal Flood Risk Management Standard (FFRMS) for new construction eligibility.
• Rescinded the mandatory pre-endorsement inspection requirements for properties located in presidentially-declared major disaster areas to reduce delays and improve the bandwidth of home property inspectors that are often overwhelmed following a natural disaster.