The following requirement, published in Mortgagee Letter (ML) 2020-24 and extended in MLs 2020-40, 2020-46 and 2021-07 is effective for FHA Single Family Title II Forward Mortgage and Home Equity Conversion Mortgage (HECM) Case Numbers issued on or before June 30, 2021.
Yes, the Mortgagee must obtain one of the following to verify and confirm that the business is open and operating:
- evidence of current work (executed contracts or signed invoices that indicate the business is operating on the day the lender verifies self-employment);
- evidence of current business receipts within 10 days of the Note date (payment for services performed);
- lender certification that the business is open and operating (lender confirmed through a phone call or other means); or
- business website demonstrating activity supporting current business operations (timely appointments for estimates or service can be scheduled).
For additional information, see:
- Mortgagee Letters 2021-07, 2020-46, 2020-40 and 2020-24: https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee
- Handbook 4000.1 II.A.4.c.xii(I) and II.A.5.b.xii(I): https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh