COVID-19: Must the Mortgagee obtain additional documentation to confirm a self-employed Borrower’s business is open and operating due to COVID-19?

The following requirement, published in Mortgagee Letter (ML) 2020-24 and extended in MLs 2020-40, 2020-46, 2021-07, and 2021-16 is effective for FHA Single Family Title II Forward Mortgage and Home Equity Conversion Mortgage (HECM) Case Numbers issued on or before September 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:

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-05563