What will the Mortgagee or Borrower pay for FHA’s Home Equity Conversion Mortgage (HECM) Collateral Risk Assessment Process?

Neither the Mortgagee (Lender) nor the Borrower will be required to pay a fee for FHA’s Collateral Risk Assessment Process.

The cost of the Home Equity Conversion Mortgage (HECM) second appraisal, if required under the Collateral Risk Assessment Process, is eligible to be financed as part of the Borrower's closing costs.

For additional information, see Mortgagee Letters 2018-06 and 2019-16 available at: https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: 2018-0030