What property types are not eligible for a HECM purchase loan?

The following property types are ineligible for FHA insurance under the HECM for Purchase program:

1. Cooperative units;

2. Newly constructed principal residences where a Certificate of Occupancy, or its equivalent, has not been issued by the appropriate local authority;

3. Boarding houses;

4. Bed and breakfast establishments;

5. Existing manufactured homes built before June 15, 1976; and

6. Existing manufactured homes built after June 15, 1976 that fail to conform to the Manufactured Home Construction Safety Standards, as evidenced by affixed certification labels (e.g. data plate and HUD certification label) and/or lack a permanent foundation as required in HUD’s Permanent Foundations for Manufactured Housing Guide or homes that are installed or occupied previously at another site or location.

Mortgagee Letter 09-11 is available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee
Federal Register 24 CFR 206.45 at:  https://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title24/24cfr206_main_02.tpl

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: KA-02275