The Federal Housing Administration (“FHA”) recently issued Title I Letter 489 (“TIL-489”) to announce the adoption of the Uniform Residential Loan Application (“URLA”) for Title I loan programs. Title I loan programs, established under the National Housing Act, provide homeowners with the ability to finance home improvements or repairs through FHA-insured loans. Unlike other FHA loans primarily aimed at purchasing or refinancing homes, Title I loans are specifically designed for property improvements that “substantially protect or improve the basic livability or utility of a property.” Title I loans are also available for the purchase or refinance of manufactured homes.
Until now, Title I loan programs have used program-specific borrower loan applications that are different from the Uniform Residential Loan Application (“URLA”) required by Title II loan requirements. Now, these forms, HUD-56001 (Credit Application for Property Improvement Loan) and HUD-56001-MH (Credit Application for Manufactured Home Loan Improvement Loan), are being replaced with the URLA (FNMA Form 1003/FHLMC Form 65). In addition, TIL-489 also introduces a new form that will be required for Title I loans, form HUD-92900-TI, HUD Addendum to Uniform Residential Loan Application for Title I Loans. The new form is similar to form HUD-92900-A for Title II loans but adds Title I specific questions.
FHA states that the adoption of the standardized URLA is part of an effort to align Title I loan programs with current industry practices. The FHA expects the policy changes to result in a more streamlined and efficient loan process which will encourage higher lender participation. Lenders will be able to use existing loan origination systems to collect loan information, instead of having to maintain other software for Title I applications or complete the information manually.
The Single Family Housing Policy Handbook 4000.1 is being updated to reflect the new requirements, which will be included in a future publication. The provisions of TIL-489 must be implemented for Title I loan case numbers assigned on or after May 8, 2025, but may be implemented immediately. The previously required forms, HUD-56001 and HUD-56001-MH, will be retired on November 8, 2025.
DocMagic will make the form HUD-92900-TI available beginning on March 6, 2025. The form will return with the standard URLA in Title I loan plans or can be selected from the Form List.
