FHA's June Regulatory Overhaul: What Mortgage Lenders Need to Know
On June 23, 2026, FHA issued five Mortgagee Letters (MLs) updating requirements across origination, quality control, and servicing under the FHA Single Family Housing Policy Handbook (Handbook 4000.1). The changes will be incorporated into a forthcoming update to the Handbook. Below is what mortgage lenders need to know.
Form HUD-92900-B Requirement Eliminated
ML 2026-07 formally rescinds the requirement that mortgagees furnish borrowers with form HUD-92900-B, Important Notice to Homebuyers, at application.
Mortgagees no longer need to provide the form to borrowers or obtain and retain an executed copy.
The change is permanent and supersedes the November 19, 2025 waiver of the same requirement.
Disclosures required under the Truth in Lending Act and other federal law are unaffected.
Lenders should update loan application checklists, disclosure packages, and vendor platforms to remove the form.
Officer in Charge and QC Sampling Changes
ML 2026-09 eliminates several institutional approval and quality control requirements.
The Officer in Charge no longer needs to be a full-time employee exclusively dedicated to the mortgagee, and the prior exception for Investing Mortgagees is removed as unnecessary.
The requirement that staff have internet or hard-copy access to FHA guidance is eliminated.
The separate "Identifying Patterns" QC requirement is removed as redundant with existing loan-level QC expansion rules.
A permanent exception now excuses certain Early Payment Defaults tied to Presidentially-Declared Major Disaster Areas from the QC sample, replacing case-by-case waivers.
More Draws Allowed Under Limited 203(k)
ML 2026-06 increases the maximum number of draw requests under the Limited 203(k) program from two to four per contractor.
The 203(k) program allows borrowers to finance home purchase or refinance costs together with rehabilitation costs in a single FHA-insured mortgage.
Draws now consist of an initial draw at closing, up to two intermediate draws, and a final draw.
Each draw may include up to two disbursements, counted as a single draw.
Standard 203(k) draws may also include multiple disbursements without increasing the total draw count.
Lenders originating 203(k) loans should review escrow disbursement procedures and contractor payment schedules to reflect the updated structure.
Appraisal Field Reviews Now Optional
ML 2026-10 removes the requirement that mortgagees obtain appraisal field reviews on at least 10 percent of origination and underwriting QC reviews.
Field reviews remain available as a tool but are no longer mandatory.
Mortgagees may instead rely on valuation tools, AVMs, and desk reviews, provided all other appraisal and property QC requirements are met.
Lenders should revisit QC plans to confirm the review methodology going forward.
Servicing and Loss Mitigation Updates
ML 2026-08 updates Trial Payment Plan (TPP) and loss mitigation review requirements.
A Borrower's third failure to accept a TPP Agreement in a Default episode now counts as a TPP failure.
TPP payments may change due to escrow adjustments for taxes and insurance.
Repeat loss mitigation re-reviews are now limited before a mortgagee may initiate foreclosure.
The implementation deadline is September 21, 2026.
Bottom Line
Mortgagees should review policies, procedures, and vendor agreements for each of these updates now, as most provisions are effective immediately rather than on a delayed timeline.
Questions about how these updates affect your policies or procedures? Contact troy@garrishorn.com to schedule a consultation.