FR-6609-N-01 Request for Information Regarding Single Family Minimum Property Requirements (MPR)

The Collateral Risk Network (CRN) supports the FHA's effort to modernize and streamline Single Family Minimum Property Requirements (MPRs) to reduce regulatory burdens and improve access to housing. They argue that current MPRs are often outdated, overly rigid, and place unnecessary technical inspection burdens on appraisers, and they recommend focusing on material defects while clarifying communication and appraiser roles.

The National Association of Mortgage Brokers (NAMB) supports modernizing the FHA's Minimum Property Requirements (MPRs) to make FHA loans more competitive with conventional financing. They recommend adopting the GSE property condition rating system, allowing for post-closing repairs on non-critical items, and consolidating fragmented guidance into a single policy document.

A coalition of housing finance trade organizations is urging the FHA to align its Minimum Property Requirements (MPRs) with the standards established by Fannie Mae and Freddie Mac. They argue that the current FHA requirements are overly burdensome, create unnecessary costs for lenders and borrowers, and should be replaced with a standardized condition rating system to improve efficiency and marketability.

The commenter, representing a business interest in the mortgage industry, provides specific recommendations to improve FHA's Single Family Minimum Property Requirements (MPRs). They argue for greater standardization, the removal of requirements for minor cosmetic repairs, and better alignment with GSE (Fannie Mae and Freddie Mac) standards to increase efficiency and reduce transaction costs.

The National Association of Appraisers (NAA) supports modernizing FHA's Minimum Property Requirements (MPRs) to align with GSE requirements. They argue that current MPRs create unnecessary barriers for borrowers and suggest streamlining the process by reducing requirements that exceed GSE standards and allowing for more flexible repair options like escrows or virtual inspections.

A mortgage lender (Newrez) argues that current FHA Minimum Property Requirements (MPRs) are often more burdensome and less clear than GSE requirements, creating hurdles for borrowers and lenders. They advocate for streamlining these requirements by removing several specific mandates—such as certain paint, power line, and water purification rules—to better align with modern appraisal practices and market standards.

Dennis Velardo, owner of Velardo Appraisal Group, LLC, supports the FHA's review of Minimum Property Requirements with the goal of modernizing the standards. He argues for clearer distinctions between normal aging and structural deficiencies, a reduction in subjective repair requirements, and more consistent interpretations among lenders and underwriters to improve efficiency and homeownership access.

The commenter expresses satisfaction with the FHA minimum property standards but suggests improvements to the clarity of the 4000.1 handbook regarding appraiser responsibilities. They also request clearer guidelines on exterior paint repairs and better accessibility to the appraisal help desk.