HUD adopts 14 changes to FHA policies, aiming to lower costs and ease credit access

The U.S. Department of Housing and Urban Development (HUD) is rolling out 14 changes to the Federal Housing Administration (FHA)’s single-family mortgage insurance program, including less stringent appraisal rules, expanded flexibility for the 203(k) rehab loan program and simplified closing forms. 

The updates touch FHA policies from origination through servicing and quality control. HUD said the goal is to remove outdated requirements, reduce administrative work, and make FHA financing more efficient for both homebuyers and lenders. 

“Every unnecessary regulation comes with a cost, and too often homebuyers pay the price,” HUD Secretary Scott Turner said in a statement. “If a policy does not protect taxpayers, improve affordability, or expand opportunity for Americans, we should rethink it.” 

Regarding appraisal quality control, FHA is reducing requirements tied to appraisal field reviews, which HUD said cost about $425 per review. The change will save the industry an estimated $3.3 million per year. 

Under the Limited 203(k) Rehabilitation Mortgage Insurance Program, FHA will allow an increased number of contractor draw requests, making it easier to complete smaller home rehabilitation projects, which are often critical for addressing aging housing markets and lower-priced housing segments.

FHA is also permanently exempting early payment defaults caused by natural disasters from required quality control review samples. And it’s eliminating the duplicative requirement for lenders to use the Important Notice to Homebuyers Form 92900-B, which is expected to simplify the FHA closing process. 

In loss mitigation, FHA is clarifying requirements governing trial payment plans. HUD said the changes are designed to protect the Mutual Mortgage Insurance Fund, establish safeguards to prevent abuse and ensure proactive borrowers are not penalized when they work with servicers to avoid default.

Turner, who took over the department’s top job under the Trump administration, has emphasized regulatory rollbacks and cost reductions as core priorities. 

FHA’s single-family unit has also seen turnover in senior roles. Earlier this month, Frank Cassidy stepped down from his role as FHA Commissioner and HUD assistant secretary for housing after a brief temporary leave. Ginnie Mae President Joseph Gormley is leading the office in an acting capacity. 

HUD said FHA has taken more than 150 actions to streamline its single-family program since the beginning of the Trump administration, signaling an ongoing regulatory recalibration rather than a one-off adjustment. 

This article was written by Flávia Furlan Nunes and generated with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.