www.hudclips.org 

HUD Mortgagee Letter 97-10
 

U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

 
OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER
 
April 1, 1997
 
MORTGAGEE LETTER 97-10
 
TO:  ALL APPROVED MORTGAGEES
 
SUBJECT:  Single Family Loan Production -
Energy Efficient Mortgages on Section 203(h) Mortgages for
Disaster Victims Areas
 
        With Mortgagee Letter 93-13 (ML 93-13) , FHA announced a
pilot program for insuring mortgages on energy efficient properties in five
states. ML 95-46  expanded the Energy Efficient Mortgage (EEM) program
nationwide and modified it to also include Section 203(k) rehabilitation
mortgages as well as to permit the use of adjustable rate mortgages.
 
        Effective immediately, the EEM program may now also be
used in conjunction with  Section 203(h) mortgages made to victims
of presidentially-declared disasters.  The mortgage must comply with both
Section 203(h) requirements as well as those for the EEM program, both of
which are described in chapter two of HUD Handbook 4155.1 REV-4 , Change 1.
However, the program is limited to one-unit detached houses only.  Two-,
three-, and four- unit properties are not eligible, nor are condominium units.
Adjustable rate mortgages may be used on Section 203(h) mortgages.
 
        Lenders are responsible for submitting in the endorsement
binder the documents used to calculate the maximum loan amount for the EEM, as
well as providing documentation attesting to the eligibility of the borrower
to obtain Section 203(h) financing, i.e., evidence of destruction of the
previous residence.
 
        If you have any questions regarding this issue, please
contact your local FHA office.
 
Sincerely yours,
 

Nicolas P. Retsinas
 Assistant Secretary for Housing-
 Federal Housing Commissioner