Reminder: New FHA Handbook for 2015, 2016 Takes Effect This Month

Heads up FHA lenders and borrowers. There’s a new FHA handbook that takes effect later this month. The new handbook is more than 800 pages long and covers almost every aspect of the FHA mortgage-insurance program. It also replaces several other guides and policy letters, which will be phased out when the new book takes effect on September 14, 2015.

Most of the information in the new handbook pertains to mortgage lenders, in particular. It explains paperwork procedures, underwriting guidelines and the like. But borrowers seeking an FHA loan can also learn a lot from the new handbook. For instance, Chapter 2, Section A deals with “allowable mortgage parameters” such as loan-to-value limits, down payments, mortgage insurance and the like. These are all relevant topics for home buyers and borrowers.

New FHA Handbook: “Single Family Housing Policy”

Officially, the new policy guide is called the Single Family Housing Policy Handbook. The “single-family” part means that most of it applies to single-family home loans in particular, as opposed to multi-family lending. It is also commonly referred to as the “SF Handbook,” or HUD Handbook 4000.1.

Here are some frequently asked questions relating to the new guide.

When does the new handbook take effect?

Most sections of the new FHA handbook are effective for home loans with case numbers assigned on or after September 14, 2015. A few sections, namely those that apply to the FHA 203(k) program, don’t take effect until March 14, 2016.

Can mortgage lenders start using it early, if they’re ready?

No. According to HUD, approved mortgagees (lenders) must continue using current FHA handbooks and policies until the new Single Family Housing Policy Handbook becomes effective. See implementation dates above.

The book was previously published online, on HUD’s website and also at, to help mortgage lenders prepare. But according to HUD, all existing guidelines will remain in effect “until the effective dates of the various sections and subsections, as noted in the online SF Handbook.”

How will HUD / FHA make changes to the new handbook, going forward?

HUD will regularly update the new FHA handbook over time, as they have done with other policy guides in the past. The change process, and the manner in which they communicate changes to lenders, will also be similar to what has been done in the past. In most cases, handbook changes will be preceded by some form of announcement, such as the “Mortgagee Letters” HUD has used in the past. The handbook itself will be marked with color-coded notations whenever an update or addition is made.

Will some of the HUD Mortgagee Letters be superseded by this handbook?

Yes, a number of Mortgagee Letters will be superseded when HUD Handbook 4000.1 takes effect. Here’s a list of letters (by ML number and name) that will be replaced:

  • 2014-08: Guidance on Nonprofits Assisting Government Entities in Providing Secondary Financing in Conjunction with FHA-Insured Mortgages
  • 2013-44: HUD Single Family Real Estate Owned (REO) Properties: Clarification on Comparables used for Appraisals
  • 2013-14: Minimum Cash Investment and Secondary Financing Requirements – Acceptable Documentation for Funds Provided by Federal, State, or Local Governments, their Agencies or Instrumentalities
  • 2011-38: Secondary Financing Eligibility Requirements for IRC Section 115 Nonprofits
  • 2011-19: Financing of Transaction Costs for Real Estate Owned (REO) Properties Purchased Under FHA $100 Down Sales Incentive
  • 2002-01: Nonprofit Participation in Single Family FHA Activities – New Requirements and Restrictions
  • 2001-30: Nonprofit Organization and Government Entity Participation in Single Family FHA Activities
  • 2000-27: Appraising and Financing HUD Real Estate Owned (REO) Properties with FHA-Insured Financing – Single Family Loan Production
  • 1996-52: Single Family Loan Production – Nonprofit Agencies as Mortgagors
  • 1995-56: Single Family Property Disposition Insured Sales with Repair Escrow
  • 1994-02: Secondary Financing Provided by Nonprofit Agencies

Learn more and get updates:
The new FHA handbook for 2015 – 2016 is currently available in PDF form on the website. There’s also a collapsible / expandable version available on In addition, we are currently working on a “clean HTML” version to improve access readability. Our HTML version will be available before the first implementation date of September 14, 2015. If you’d like to know when it comes online, sign up for our newsletter at the top of this page.