The U.S. Department of Housing & Urban Development (HUD) has announced that the Federal Housing Administration (FHA) is rescinding more than 12 sub-regulatory policies under its Single-Family Mortgage Insurance Program, a move designed to cut red tape, help reduce the cost of homeownership, and eliminate financial and regulatory burdens.
The FHA’s rescissions span the loan origination process from the point of mortgage application submission, through FHA’s issuance of an insurance endorsement on the mortgage.
“These rescissions are bold, necessary, and long overdue,” said HUD Secretary Scott Turner. “Under President Trump’s leadership, we’re slashing red tape that drives up costs and shuts families out of the market. Every hardworking American deserves a fair shot at owning a home—the American Dream should never be buried under a pile of regulations. These changes open doors for families and lenders, unlocking opportunities nationwide.”
Today’s policy retractions, executed through a series of Mortgagee Letters (ML), are aimed at eliminating policies that directly or indirectly increase the cost of homeownership for first-time buyers. The goal of the removal of these requirements are intended to reduce unnecessary regulations, increase the nation’s affordable housing supply, reduce financing costs, and save taxpayer funds by creating more efficiency.
Reducing the Barriers to Homeownership
Among the FHA’s actions, the series of Mortgagee Letters will:
- Rescind Outdated and Costly FHA Appraisal Protocols: By removing antiquated and burdensome procedural steps that an appraiser must complete during each assignment, through Mortgagee Letter 2025-18, the FHA is better aligning its appraisal policies with industry standards and reducing unnecessary costs and delays that are passed through to homebuyers. During the first Trump Administration, HUD made targeted technology investments through FHA Catalyst that have improved FHA’s collateral valuation analytics. As a result, FHA will be able to extend the benefit of these investments to borrowers, lenders, and taxpayers in the form of streamlined appraisal procedures, lower costs, and quicker turnaround times.
- Rescind Full-Time Direct Endorsement Underwriter Requirements: By rescinding its previous full-time employment requirement for Direct Endorsement underwriter eligibility and now allowing part-time employment, Mortgagee Letter 2025-16 allows lenders the flexibility to better manage their staffing needs, reduce origination costs, and encourage greater participation in FHA programs.
- Rescind the Supplemental Consumer Information Form (SCIF) Collection Requirement: FHA Mortgagee Letter 2025-15 rescinds the required collection of the SCIF, and removes a requirement that had limited benefit and was an additional collection burden for lenders.
- Rescind the Federal Flood Risk Management Standard (FFRMS) for New Construction Eligibility: Mortgagee Letter 2025-17 rescinds the FFRMS restores the previous established policy, thus removing what would have been limits on the land available for development and eliminating increases in the cost of construction for FHA-insured single-family properties, which would have exacerbated the supply of affordable housing for the next generation of homebuyers.
- Rescind the Mandatory Pre-Endorsement Inspection Requirements for Properties Located in Presidentially Declared Major Disaster Areas: Mortgagee Letter 2025-19 modifies disaster inspection requirements that align FHA’s policies with industry standards and allows lenders the discretion to assess property condition and determine appropriate risk-based actions prior to endorsement. Mortgagee Letter 2025-19 reduces costly and unnecessary delays and will improve the bandwidth of home property inspectors that are often overwhelmed following a natural disaster.
