HUD recently released Notice H 2013-19 to extend and revise Notices H 2010-13, H 2011-4 and H 2011-35 concerning Loan Committees and all prior administrative guidance regarding Loan Committee policy and procedures. The purpose of a Loan Committee approval structure is to align the Hub and Program Center loan review processes with management of credit risks, and to ensure the integrity and stability of the FHA Insurance Fund. In doing so, HUD is ensuring that the best lending and deal structuring decisions are made on large, complex, and higher risk loan transactions and that consistent and predictable underwriting outcomes are achieved for both lenders and borrowers.
Summary of Changes in Notice 2013-19:
- Loan amount and project size thresholds requiring review by the National Loan Committee are further increased, shifting more cases to Hub Loan Committee review and decision.
- In prior Notices, all Section 220, as well as all 221(d) age-restricted and 231 applications were identified as requiring National Loan Committee review, regardless of the size of the loan or number of units. But this requirement is clarified to exclude age restricted transactions where the property was previously financed under Section 202 or is an insured project with project based Section 8 assistance. Now such prior assisted, age restricted projects require Loan Committee review only in accord with the thresholds for loan size or number of units.
- Submission documents and file naming requirements previously specified for National Loan Committee submissions are now made mandatory for all Loan Committee submissions.
- Hub Directors are required to define a quorum for Hub Loan Committees.
- The method for “Approval by Consent” is clarified.
Click here to read Notice 2013-19./a>
