www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 June 16, 1994 Mortgagee Letter 94-27 TO: ALL APPROVED MORTGAGEES SUBJECT: Single Family Loan Production-Requirements for Affirmative Fair Housing Marketing Plan and Revised Builder Certification Form On September 9, 1993, HUD issued Mortgagee Letter 93-27 concerning the termination of subdivision processing and implementation of the new Builder Certification procedure for new construction. Since issuance of that Mortgagee Letter, the Department has received a number of questions about how Affirmative Fair Housing Marketing Plans (AFHMP) should be processed under the new Builder Certification procedure for proposed construction. The purpose of this Mortgagee Letter is to review the requirements for AFHMPs and the processing procedures to be used by builders and lenders when using the new Builder Certification process and processing procedures to be used by the Department. In addition, the Department wishes to reemphasize to lenders, builders and others in the industry its commitment to affirmatively further fair housing. HUD's regulations require that the builder or developer have a HUD-approved AFHMP if it intends to sell with HUD mortgage insurance five or more new properties in any twelve-month period. To obtain HUD approval of an AFHMP, the builder or developer must complete and file Form HUD-935.2 with the Fair Housing and Equal Opportunity (FHEO) Division of the local HUD full-service Field Office or the FHEO Program Operations Divisions in HUD Regional Offices. The FHEO Division reviews and evaluates the AFHMP in accordance with HUD Handbook 8025.1, Implementing Affirmative Fair Housing Marketing Requirements, and monitors its implementation. The AFHMP must be approved by the FHEO Division before the builder or developer begins to market its properties. _____________________________________________________________________ 2 With respect to new subdivisions being built in phases, an AFHMP must be filed for the first phase. Builders or developers that are planning large phased subdivisions must consult with the FHEO Division of the local HUD full-service Field Office for further guidance on implementing affirmative fair marketing requirements for subsequent phases. Be advised that, depending on the size, location and sequencing of each phase, the FHEO Division can request the submission of new or amended AFHMPs for subsequent phases. In addition, the builder or developer who is an applicant for participation in any HUD program subject to either AFHMP requirements or the joint HUD-VA Nondiscrimination Certification shall be exempt from obtaining HUD approval of an AFHMP if: (a) the builder or developer is a signatory in good standing to a Voluntary Affirmative Marketing Agreement (VAMA) between the Department and a State or local home builders association or Board of Realtors associated with their national organizations. As a signatory to such an agreement, a builder or developer promises that it will conduct its marketing activities connected with HUD-insured mortgages in a non-discriminatory manner and abide by the provisions of the VAMA; and (b) the builder or developer submits to HUD written proof of its status as a signatory to such an agreement. The FHEO Division determines whether a builder or developer is a signatory in good standing. To assure that the builder has complied with HUD's AFHMP requirements, the Builder Certification Form HUD-92541 has been amended to include information about the AFHMP. (A copy of the amended Form HUD-92541 is attached to this Mortgagee Letter.) The builder must complete Block 11 to certify compliance with AFHMP requirements. The amended Form HUD-92541 may be used immediately, at the discretion of the lender, but must be used for all lender requests for appraisals (Form HUD-92800.1) dated on or after September 1, 1994. A lender shall not request FHA case numbers for new properties until it is sure that the builder is in compliance with HUD's AFHMP requirements, i.e., has an approved AFHMP or is found to be a signatory in good standing to a VAMA. Lenders and builders that fail to comply with HUD's AFHMP requirements will be subject to appropriate disciplinary proceedings by the Department. HUD is committed to enforcing Fair Housing laws and regulations and will not tolerate non-compliance with them. _____________________________________________________________________ 3 If you have any questions concerning this letter, please contact your local HUD Office. Sincerely yours, Roberta Achtenberg Nicolas P. Retsinas Assistant Secretary for Fair Assistant Secretary for Housing Housing and Equal Opportunity - Federal Housing Commissioner Attachment _____________________________________________________________________ ___________________________________________________________________________ Builder's Certification of Plans, Specifications, & Site ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ___________________________________________________________________________ form HUD-92541 (3/94) Page 1 of 2 ref. Handbook 4145.1 _____________________________________________________________________ ___________________________________________________________________________ Instructions for Builder's Certification, form HUD-92541 ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ___________________________________________________________________________ form HUD-92541 (3/94) Page 2 of 2 ref. Handbook 4145.1