What is the Collateral Risk Assessment Process for a Home Equity Conversion Mortgage (HECM)?

The Collateral Risk Assessment Process is a proprietary process that FHA will use to ensure that risks to FHA are mitigated by the use of a second appraisal.  Each Home Equity Conversion Mortgage (HECM) will be evaluated individually to determine if a second appraisal is required.

Because this is a proprietary process, Mortgagees will not be able to obtain a copy of the assessment. 

The process will be reviewed periodically and modified as needed.

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: 2018-0033