WASHINGTON (2/7/12)--The Credit Union National Association (CUNA) is seeking credit union comment on a Department of Housing and Urban Development (HUD) proposal that would eliminate the process for requesting alternative Federal Housing Administration (FHA) maximum mortgage amounts.
HUD currently limits the maximum principal obligation on FHA-insured single-family mortgages to either 115% of the median house price for a single-family home in a surrounding metropolitan area, or 65% of the national conforming limit. However, HUD allows this obligation to be challenged through an appeals process if any party involved in the mortgage "believes that a mortgage limit established by the [HUD Secretary] does not accurately reflect the median house prices in the area."
This HUD rule was implemented in the early 1980s, when HUD did not have comprehensive data for home sales transactions.
Under these current HUD rules, appeals could only be made in ten of the 3,234 counties in the U.S. and related territories, and HUD has not seen a mortgage-related appeal since 2008.
Overall, HUD has said this appeals process is outdated and unnecessary, and creates unneeded costs for the agency. HUD has said removing the appeals regulation would not have any impact on the calculation of area loan limits now or in the future.
CUNA has encouraged credit unions that have used the appeals process in the past, or that anticipate taking advantage of the appeals process in the future, to consider circumstances that would lead them to make an appeal before they provide their comment.
CUNA is accepting comments until March 1. For the full comment call, use the resource link.