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Use HECM Insurance Application to add or update the application for FHA mortgage insurance for a non-endorsed Home Equity Conversion Mortgage (HECM) case. HECM insurance application information is view only if the case is endorsed or if you are not authorized to update the information. Authorized employees of lenders participating in the Lender Insurance (LI) Reverse program can use HECM Insurance Application to endorse a HECM case for FHA insurance. The basic procedure for processing HECM Insurance Application includes:
See some of the sources of information used for completing the HECM Insurance Application Update page.
| • | A warning message is displayed indicating the status of the validation of the name, Social Security Number, and birth date combination of the borrower(s) against government records. If one or more borrowers failed validation, the sequential number of the borrower that failed is provided (e.g., #2 for the second borrower listed). Use Holds Tracking to get details. However, cases are only listed there for three to five business days. See also Reviewing HECM Insurance Application Results for links to information on common messages. |
| • | For an endorsed case, the view-only HECM Insurance Application Results page appears. Changes cannot be made. A message appears above the FHA Case Number stating that the case is endorsed for insurance. |
| • | Select Yes in the Issue MIC in Sponsor Name field if the Mortgage Insurance Certificate (MIC) is to be issued in the sponsor's or agent's name. Otherwise, select No. Note: If there is a sponsored originator, Yes must be selected. |
| • | Select Yes in the Mail to Sponsor Name field if the Mortgage Insurance Certificate/Non-Endorsement Notice - form HUD-59100 is to be mailed to the sponsor or agent. Otherwise, select No. Note: If there is a sponsored originator, Yes must be selected. |
in the ADP Code field to look
up and select the appropriate ADP code. The ADP code must be one of the codes
designated for a HECM case. After an ADP code selection is made, the new ADP
Code Characteristics are displayed in the Amortization
Type, Housing
Program, Property Type,
Special Program,
and Buydown fields.
Verify the information in these fields (information is view only). If it is not
correct, look up the ADP code again and make another selection.
to look up the appropriate Program ID.| • | Select Yes in the Repair Set Aside field. |
| • | Enter the month and year the repairs will be completed in the Repair Complete Date field. Use an mm/yy format. The Repair Complete Date must be within one year of the Closing/Disbursement Date. |
| • | Enter the amount in the Repair Set Aside Amount field. Do not include a dollar sign, comma, or cents. |
| Get the information from the Home Equity Conversion Loan Agreement, Exhibit 3 - Repair Rider. | |
| If necessary, update the nine-digit identifier issued through the FHA Connection for the completed Certificate of HECM Counseling, form HUD-92902. When the HECM Insurance Application Update page is processed, the date HECM counseling
was completed for the new certificate is displayed in the HECM Counsel Date field on the subsequent HECM Insurance Application Results page. Note: You can click to the right of the field to display the pop-up HECM Counseling Certificate Information page with details on the completed Certificate of HECM Counseling, form HUD-92902. Click Close to close the page or click Print to print the page. |
| -or- |
| If HECM counseling is being waived for a HECM refinance case that meets the conditions for a waiver, leave this field blank. Counseling can be waived for a HECM refinance if the Home Equity Conversion Mortgage (HECM) Anti-Churning Disclosure - form HUD-92901 is included in the case binder and it is determined by the system that the other conditions for a waiver were met. If HECM housing counseling is required, it must be performed before Case Number Assignment processing. |
| • | If the case is not a HECM refinance or a HECM refinance that does not meet the conditions for a counseling waiver, select No from the drop-down list. |
| • | If the case is a HECM refinance and meets the conditions for a counseling waiver, select Yes from the drop-down list. (The HECM Counseling Certificate Number field must be blank.) |
Do not use dollar signs, commas, or cents in any of the monetary fields in this section.
-or-
Click
to
select a date.
Get the information from form
HUD 92900-A.
If a Social Security Number is added or changed in the Borrower Information section, the borrower's/coborrower's identification is validated against government records and credit history is checked in the Credit Alert Verification Reporting System (CAIVRS). A non-borrowing spouse's Social Security Number is validated against government records but is not checked in CAIVRS.
Enter the last name, first name, and middle initial of the borrower in the appropriate Name field (e.g., Borrower 1), or make any necessary changes to the name displayed (up to 22 characters).
| Notes: | |
| • | Use this format: Last Name, First Name, Middle Initial. Example: Doe, John J. |
| • | If the name has a generational suffix (Jr, Sr, II, or III), use this format: Last Name Suffix, First Name, Middle Initial. Example: Doe Jr, John J. |
| • | If the name is too long to fit in the field (i.e., is more than 22 characters), enter as much of the last name as possible. At least one character must be entered for the first name. Example: Bartholomew Milhouse-Rumpelstiltskin is entered as Milhouse-Rumpelstil, B. |
| • | If the borrower has a single name, enter it as the last name and FNU as the first name (FNU is an acronym First Name Unknown). For example, if Zorro is the single name of the borrower, Zorro, FNU is entered in the Name field. |
| Get the information from Fannie Mae form 1009, section III. Borrower Information, Borrower's Name or Co-Borrower's Name. | |
| • | Enter the last name, first name, and middle initial of the non-borrowing spouse in the NBS Name field. |
| • | Enter the non-borrowing spouse's Social Security Number in the SSN field. |
| • | Enter the date of birth of the non-borrowing spouse in the Date of Birth field. Use an mm/dd/yyyy format. Note: The non-borrowing spouse must be 18 years or older. |
| Note: A maximum of three borrowers can have a non-borrowing spouse per case. | |
| • | If the demographic information was collected through a face-to-face interview, Yes or No must be selected from the drop-down list for each question. |
| • | If the demographic information was collected through any method other than a face-to-face interview, leave these fields blank. |
| • | If the borrower is a nonprofit or corporation, leave these fields blank. However, for any co-borrower of a corporation, Yes or No must be selected from the drop-down list for each question if the demographic information was collected through a face-to-face interview. |
| Get the information from the Demographic Information Addendum to the URLA (Fannie Mae form 1003, Freddie Mac form 65). | |
Do not enter a percent sign (%) in fields requiring percentages in this section.
| • | For mortgages assigned an FHA case number on or after May 3, 2021, this rate must be equal to or greater than the Margin, up to 18.875. |
| • | For mortgages assigned an FHA case number before May 3, 2021, this rate can be .001 to 19.999. |
| • | For an adjustable rate mortgage (ARM), this is the initial interest rate charged on the mortgage beginning at closing. |
| • | For a fixed rate mortgage, this is the expected average mortgage interest rate (same as Expected Rate). |
| • | For mortgages assigned an FHA case number on or after May 3, 2021, this rate can be 0 to 18.875. |
| • | For mortgages assigned an FHA case number before May 3, 2021, this rate can be .001 to 30.00. |
| • | For a fixed rate mortgage, the rate must be the same as the Interest Rate (%). |
| • | Initial Principal Limit (IPL): Enter the value of the loan proceeds available to the borrower, determined at closing, in the Principal Limit field. Do not include a dollar sign, comma, or cents. The value in this field must be between 9% and 78% of the Maximum Claim Amount. Get the information from the Home Equity Conversion Loan Agreement, Exhibit 1 - Payment Plan. |
| • | Initial MIP Factor: For mortgages assigned an FHA case number before October 2, 2017, select the percentage to be used for calculating the initial (upfront) mortgage insurance premium (MIP) from the drop-down list. (For a HECM refinance case, only the prior mortgage is considered when computing the initial MIP.) Note: Initial MIP Factor selected must agree with the sum of the Mandatory Obligations (Does not include cash), Taxes/Insurance 1st Yr Payments, Additional 10% of IPL Usage Amount, and Repair Set Aside Amount. |
| • | Mandatory Obligations (Does not include cash): Enter the amount of financed fees and charges incurred in connection with the origination of the mortgage that are paid at loan closing. Do not include a dollar sign, comma, or cents. The sum of financed mandatory obligations cannot exceed the available principal limit. This field cannot be left blank and a zero (0) amount can be entered. Note: You can click  to get details on Mandatory Obligations. Sources: Home Equity Conversion Loan Agreement, Exhibit 1 - Payment Plan, Exhibit 2 - Schedule Closing of Costs/Schedule of Liens, and Exhibit 3 - Repair Rider, Settlement Statement/Closing Disclosure, and Credit Report. |
| • | Mandatory Obligations Cash from Borrower: Enter the amount of "cash" the borrower is required to bring to loan closing to satisfy the difference between the Initial Principal Limit amount and the amount of mandatory obligations. Do not include a dollar sign, comma, or cents. This field cannot be left blank and a zero (0) amount can be entered. Sources: Home Equity Conversion Loan Agreement, Exhibit 1 - Payment Plan and Exhibit 2 - Schedule Closing of Costs/Schedule of Liens, and Settlement Statement/Closing Disclosure. |
| • | Mandatory Obligations Cash from Lender: For a traditional or refinance HECM, enter the amount of "cash" the lender will contribute towards the borrower’s mandatory obligations, as documented in the Good Faith Estimate and Settlement Statement/Closing Disclosure. Do not include a dollar sign, comma, or cents. This field cannot be left blank and a zero (0) amount can be entered. Sources: Home Equity Conversion Loan Agreement, Exhibit 1 - Payment Plan and Exhibit 2 - Schedule Closing of Costs/Schedule of Liens, and Settlement Statement/Closing Disclosure. |
| • | Taxes / Insurance 1st Yr Payments: If HECM proceeds, or funds from a property charge set aside, are used to pay property taxes and hazard and flood insurance bills within the first 12-month disbursement period, enter the amount in this field. The sum of the actual insurance premium and tax amounts must be used. If a new tax bill has not been issued, the prior year’s amount multiplied by 1.2 is used. Do not include a dollar sign, comma,
or cents. -or- Otherwise, enter zero (0). Note: This information is not collected for cases assigned a case number before April 27, 2015 and for those cases, zero (0) is entered in this field. |
| • | Additional 10% of IPL Usage: Select Yes from the drop-down list to specify an additional amount of up to 10% of the Principal Limit was taken by the borrower at loan closing and/or the borrower intends to take during the first 12-month disbursement period after loan closing. Otherwise, select N/A or No. Note: If the sum of the Mandatory Obligations (Does not include cash), Taxes/Insurance 1st Yr Payments, and Repair Set Aside Amount is greater than or equal to 50% of the Initial Principal Limit (IPL), Yes or No must be selected for the Additional 10% of IPL Usage field. If the sum is less than 50% of the Initial Principal Limit (IPL), N/A must be selected. |
| • | Additional 10% of IPL Usage Amount: If Yes was selected for the Additional 10% of IPL Usage, enter the amount. Do not include a dollar sign, comma, or cents. If N/A or No was selected for the Additional 10% of IPL Usage, leave this field blank. |
| • | Net LESA: For mortgages assigned an FHA case number on or after September 19, 2017, enter the amount of the fully or partially funded Life Expectancy Set Aside (LESA) minus Taxes/Insurance 1st Yr Payments in the Net LESA field. Enter the amount in dollars and cents using this format: nnnnnn.nn. Note: The LESA amount used in the calculation must be the same as the LESA requirement amount entered for HECM Financial Assessment. -or- Otherwise, enter zero (0). Note: The Taxes/Insurance 1st Yr Payments amount must also be zero (0). |
| • | Servicing Fee Set Aside: For mortgages assigned an FHA case number on or after September 19, 2017, enter the amount funded for the payment of the monthly servicing fee in the Servicing Set Aside field. -or- Otherwise, enter zero (0). |
-or-
Click to select a date.
-or-
Click
to
select a date.
Get the information from Settlement Statement/Closing Disclosure.
Enter the date on which the lender relinquished control of the funds in the Disbursement Date field. Use an mm/dd/yy format. The date must be at least four business days but not more than 45 calendar days after the Closing Date. For a HECM purchase case, the Disbursement Date can be on or after the Closing Date but within 45 days of the Closing Date.
-or-
Click to select a date.
Get the information from Settlement Statement/Closing Disclosure.
See case binder for information regarding flood insurance and policy for this property (if applicable). Do not enter dollar signs, commas, decimal points, or cents in any of the monetary fields in this section.
| • | If Yes, then you must answer the next question. | |
| • | If No, then skip the next question. | |
| • | If Yes, then the rest of the information in this section is not required and is optional. | |
| • | If No, then you must enter the following flood insurance-related information. | |
| • | No Insurance (default), |
| • | National Flood Insurance Program (NFIP), |
| • | Private Flood Insurance (PFI), or |
| • | Both NFIP and PFI. |
| a. | Enter the dollar amount of the flood insurance coverage (0 to 250000) for the dwelling (not a condominium) in the NFIP Flood Insurance Building Coverage field (see the property's flood insurance policy information). Coverage amount must be at least the lesser of: | |
| • | Outstanding Loan Balance at Closing, | |
| • | $250,000, or | |
| • | 100% Replacement Cost (if entered). | |
| Or, if the property is a condominium, enter the project's flood insurance amount in the respective flood insurance building coverage field (0 to 99999999). | ||
| b. | Enter the name of the insurance company associated with the entered flood insurance policy number in the NFIP Flood Insurance Company field. | |
| c. | Enter the policy number issued by the insuring company in the NFIP Flood Insurance Policy Number field (see the property's flood insurance policy for information). | |
| a. | Enter the dollar amount of the flood insurance coverage (0 to 99999000) for the dwelling (not a condominium) in the Private Flood Insurance Building Coverage (see the property's flood insurance policy information). Coverage amount must be at least the lesser of: | |
| • | Outstanding Loan Balance at Closing, | |
| • | $250,000, or | |
| • | 100% Replacement Cost (if entered). | |
| Or, if the property is a condominium, enter the project's flood insurance amount in the respective flood insurance building coverage field (0 to 99999999). | ||
| b. | Enter the name of the insurance company associated with the entered flood insurance policy number in the PFI Flood Insurance Company field. | |
| c. | Enter the policy number issued by the insuring company in the PFI Flood Insurance Policy Number field (see the property's flood insurance policy for information). | |
| a. | Enter both sets of insurance fields, National Flood Insurance Program (NFIP) and Private Flood Insurance (PFI), as previously described. |
| b. | The sum of the National Flood Insurance Program (NFIP) Building Coverage and Private Flood Insurance Building Coverage must be at least the lesser of: |
| • | Outstanding Loan Balance at Closing, | |
| • | $250,000, or | |
| • | 100% Replacement Cost (if entered). |
| • | Outstanding Loan Balance at Closing, |
| • | $250,000, or |
| • | 100% Replacement Cost. |
| Or, if 100% Replacement Cost is not entered, then the respective Flood Insurance Building Coverage amount must be at least the lesser of: | |
| • | Outstanding Loan Balance at Closing, or |
| • | $250,000. |
Borrower Request for Appraisal Review Information
Endorsement information can be entered by an authorized LI Reverse lender employee.
Note: If the case is endorsed for insurance, a Mortgage Insurance Certificate (MIC) is "issued." The Endorsement Information section of HECM Insurance Application cannot be updated after endorsement. Use Mortgage Insurance Certificate to view and print the MIC. A message is displayed if the case binder is required to be submitted. Use Binder Selection to track case binders that were requested, received (including binders for cases awaiting endorsement), and not accepted.
When all pertinent information has been entered in the HECM Insurance Application Update page, click Send. The HECM Insurance Application Results page appears if processing was successful.
-or-
If there is an error, one of the following
occurs:
| • | An error message box appears. Click OK to clear the message. Make the correction and process again. | |
| • | The HECM Insurance Application Update page appears again for making the correction. See Reviewing HECM Insurance Application Results. | |
A message at the top of the page informs you if processing was successful, unsuccessful, or successful with a warning. Some of the messages and warnings that may appear on the HECM Insurance Application Results or HECM Insurance Application Update pages are listed below.
Warning: Pending Borrower Validation
Warning: All Borrowers Passed SSN Validation - Name, SSN or DOB Changes Will Revalidate
Warning: Borrower Validation Failed for Borrower(s): #n
Message: HECM Insurance Application Processed; Errors Exist
Message: HECM Insurance Application Not Processed Due to Error(s)
Message: HECM Insurance Application Successfully Completed
Message:
HECM Insurance Application Successfully Completed
Case Endorsed; Query Only
See Also
HECM Insurance Application - Business Background
HECM Insurance Application Page - Field Description
HECM Insurance Application Update Page - Field Descriptions
HECM Insurance Application Results Page - Field Descriptions