Written By: Stacey Sprain, Op-Ed Writer
Definition: Proposed Construction
These are properties pre-approved for mortgage insurance prior to the beginning of construction, defined as the first placement of concrete or other permanent materials. This means that the DE Statement of Appraised Value or Early Start letter has been issued by the DE Underwriter for the property prior to the first placement of concrete or other permanent materials.
Definition: Pre-Approval
For a high ratio loan, HUD requires the property to be pre-approved prior to the start of construction and obtain the required construction inspections, which; at a minimum are the initial, framing and final inspections. If the property is not pre-approved with evidence of the required inspections, then a final inspection and a HUD approved 10-year warranty is required for a high ratio loan.
Proposed Construction Documentation Requirements Checklist
High Ratio Loan- LTV >90%
_____ Copy of
• Plans and Specs
• HUD-92005 Description of Materials
• Plot Plan.
(Required by HUD to be reviewed by the underwriter as part of the Lenders file but not required to be part of the insuring file).
_____ NPMA-99a & NPMA-99b Subterranean Termite Treatment Report if property is located within a Termite Tip Zone.
Refer to http://www.hud.gov/offices/hsg/sfh/ref/sfh1-23a.cfm to determine tip zone statuses.
_____ HUD-92541 Builders Certification of Plans, Specifications and Site completed and signed by builder or builder's
Agent
_____HUD-92544 Warranty of Completion of Construction completed and signed by builder or builder's agent and
purchasing borrowers
_____ Health Authority Approval for private well and septic (if applicable)
_____ Evidence of enrollment in a HUD-Approved 10-year Warranty Plan and HUD-92051 Compliance Inspection Report as final inspection from a HUD Roster Fee Inspector; or
Three stage inspections on HUD-92051 Compliance Inspection Report from a HUD Roster Fee Inspector; or
Early Start Letter from a DE Underwriter and Three stage inspections on HUD-92051 Compliance Inspection Report from a HUD Roster Fee Inspector; or
Copy of building permit (or local jurisdiction equivalent to building permit); and Copy of the Certificate of Occupancy (or local jurisdiction equivalent to COO)
_____ Certification Letter signed by the borrower indicating that they have been provided with the Carpet Identification
Number, Manufacturers Warranties and have seen the posted Insulation Certificate
_____ Evidence of Flood insurance, if flood cert or elevation cert noted as SFHA. (If applicable)
Proposed Construction Documentation Requirements Checklist
Low Ratio Loan - LTV <=90%
_____ NPMA-99a & NPMA-99b Subterranean Termite Treatment Report if property is located within a Termite Tip Zone.
Refer to http://www.hud.gov/offices/hsg/sfh/ref/sfh1-23a.cfm to determine tip zone statuses.
_____HUD-92541 Builders Certification of Plans, Specifications and Site completed and signed by builder or builder's Agent
_____ Health Authority Approval for private well and septic (if applicable)
_____ Evidence of Flood insurance, if flood cert or elevation cert noted as SFHA. (If applicable)
About the Writer. As one of NAMU's® volunteer writers, Stacey Sprain is currently a NAMP member in good standing and is a NAMP Certified Ambassador Loan Processor (CALP). If you would like to become a volunteer writer for NAMU® , please email us at: blog@mortgageprocessor.org.
SOURCE: Published by NAMU® Publishing Group, a division of the National Association of Mortgage Underwriters® (http://www.Mortgage-Underwriters.org)
About The Author
Stacey Sprain - As an op-ed writer, Ms. Stacey Sprain is currently a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution.
