Announcement 2020-148 - FHA New Construction Requirements


Please note that 4000.1 Handbook requirements for New Construction properties have been revised and updated effective for FHA Case Numbers assigned on or after January 4, 2021. 


New Construction refers to the following three categories; Proposed Construction, Properties Under Construction, and Properties Existing Less than One Year as defined below:


  • Proposed Construction refers to a property where no concrete or permanent material has been placed. Digging of footing is not considered permanent.
  • Under Construction refers to the period from the first placement of permanent material to 100% completion with no Certificate of Occupancy (CO) or equivalent.
  • Existing Less than One Year refers to a property that is 100% complete and has been completed less than one year from the date of the issuance of the CO or equivalent. The property must have never been occupied.


FHA treats the sale of an occupied property that has been completed less than one year from the issuance of the CO or equivalent as an existing property.


The revisions and updates to the New Construction requirements were communicated in detail in FHA Mortgagee Letter 2020-36.  The changes included the elimination of Early Start Letter and Pre-Approval requirements, the consolidation of documentation requirements regardless of LTV, such as now requiring the completion of the HUD-92544 Warranty of Completion Form for all New Construction properties.


The NewRez New Construction checklist (see link below) has been updated to cover the new inspection and documentation requirements for all site built New Construction properties.  All documentation listed in the checklist must be included in the final case file.


Resource Links

FHA Mortgagee Letter 2020-36 – FHA New Construction Requirements

FHA New Construction Exhibits and Inspection Checklist for Site Built and Condominiums


Please reference the NewRez Lending Library for the changes outlined in this announcement.