The Federal Housing Administration (FHA) today published Mortgagee Letter (ML) 2020-36, FHA New Construction Requirements. This guidance updates the requirements for new construction financing for Title II Single Family forward mortgages in alignment with the regulatory amendments announced in the 2018 final rules that streamlined inspection and warranty requirements.

Changes to HUD’s maximum financing policy for new construction include:

This guidance may be used immediately for existing cases and must be used for FHA case numbers assigned on or after Jan. 4, 2021.