The


U.S.
Department
of
Housing
and
Urban
Development
(HUD)
on
Monday
announced
a

proposal
to
shift
its
Title
I
home
loan
programs
to
the
use
of
the
Uniform
Residential
Loan
Application
(URLA)
that
would
more
closely
align
them
with
broader
industry
standards.

The
proposal,
now
available
for
review
on
HUD’s

Single
Family
Drafting
Table
portal
for
proposed
policies,
will
be
available
for
comments
from
industry
stakeholders
through
Dec.
18.
Title
I
loans
currently
require
their
own
program-specific
documentation
for
both
property
improvement
and

manufactured
home
loans.

This
draft
policy
“proposes
to
replace
these
two
Title
I-specific
forms
with
the
industry-standard
loan
application
form,
Uniform
Residential
Loan
Application
(URLA,

Fannie
Mae
Form
1003/Freddie
Mac
Form
65),
and
the
new
HUD
Addendum
to
the
Uniform
Residential
Loan
Application
for
Title
I
Loans
(form

HUD-92900-TI).”

But
with
an
eye
toward
expanding
accessibility
for
these
programs,
HUD’s
proposal
would
allow
more
common
industry

technology
and
infrastructure
to
accommodate
these
loan
programs.

“By
replacing
the
Title
I-specific
forms
with
the
more
commonly
used
industry
standard
URLA,
HUD
seeks
to
simplify
its
Title
I
loan
application
process,
enabling
lenders
to
use
existing
origination
system
technology
to
collect
borrower
data,
which
eliminates
the
financial
burden
of
acquiring
multiple
software
licenses
or
manually
completing
a
Title
I
program-specific
application
form,”
the
announcement
stated.

This
will
help
to
“encourage
greater
lender
participation
in
the
Title
I
program,”
according
to
the


Federal
Housing
Administration
(FHA).

The
proposed
guidance
stems
from
2022
requests
for
information
by
HUD
that
sought
to
“gain
insight
into
barriers
with
the
origination
of
both
small-balance
mortgages
and
Title
I
Loans.”
Many
comments
on
these
requests
indicated
a
“lack
of
parity
between
Title
I
and
Title
II
loan
requirements
in
many
areas,
including
the
forms
required
for
each
program,”
according
to
the

proposed
Mortgagee
Letter
(ML).

While
the
current
forms
reflect
some
of
the
unique
characteristics
of
these
loan
programs,
HUD
wants
to
reevaluate
the
associated
processes
to
better
align
them
with
common
industry
practices.
In
addition
to
moving
Title
I
loans
to
the
URLA,
HUD
also
seeks
to
introduce
an
addendum
to
the
URLA
to
accompany
Title
I
loans,
which
would
maintain
recognition
of
the
program’s
unique
attributes.

The
addendum
would
collect
“information
similar
to
[existing
forms]
for
Title
II
loans
and
adds
Title
I
specific
questions,”
the
proposed
ML
reads.
“Aligning
Title
I
and
Title
II
requirements
by
allowing
the
use
of
the
industry
standard
URLA
form
will
alleviate
the
additional
burden
previously
imposed
on
Title
I
Lenders
to
use
a
program-specific
application
form.”

Earlier
this
year,
HUD
announced
that
Title
I
manufactured
housing

loan
limits
would
be
increased.
The
goal
is
to
align
the
FHA
with
market
forces
and
to
encourage
more
lenders
to
participate
in
the
program.

Related