www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 April 28, 1995 Mortgagee Letter 95-18 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 the 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. The purpose of this Mortgagee Letter is to review the requirements for AFHMPs, the processing procedures to be used by builders, developers and lenders when using the new Builder Certification process and the 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. Affirmative Fair Housing Marketing Plans 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 FHEO Division of the local HUD Office. 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 Director before the builder or developer begins to market its properties. With respect to new subdivisions being built in phases, an AFHMP must be filed for the first phase. Builders or developers 2 that are planning phased subdivisions must consult with the FHEO Division of the local HUD full-service office for further guidance on implementing affirmative 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 AFHM Plans for subsequent phases. Voluntary Affirmative Marketing Agreements (VAMA) In addition, the builder or developer who is an applicant for participation in any HUD program subject to either AFHM 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 the Voluntary Affirmative Marketing Agreement (VAMA) between the Department and the National Association of Home Builders concluded on January 28, 1995. As a signatory to such an agreement, the 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, e.g., a copy of the VAMA Signatory Page included in the recently published National Association of Home Builders Voluntary Affirmative Marketing Agreement. Having this document on file is sufficient proof of its signatory status. Note that all builders regardless of their status as members of a State or local home builders association are eligible for this exemption. Builders should contact the FHEO Division at their HUD full-service office for further details on becoming a signatory to a VAMA. The Builder's Relationship With Its Marketing Agent A builder that contracts with a third party such as a realty company to implement its approved Affirmative Fair Housing Marketing Plan shall state the name of the company on its Builder's Certification Form. The third-party marketer may be a signatory to a National Association of Realtors VAMA, although it is not a requirement to function as a third-party marketer of single-family housing. However, the Department will hold the builder accountable for the quality of performance of the third-party marketer in the same manner as it holds builders who market their own housing. 3 Other Matters 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 applicant must complete Block 11 to certify compliance with AFHMP requirements. The amended Form HUD-92541 must be used for all requests for endorsement submitted to HUD on or after May 1, 1995. 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. 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 (4/95) ref. Handbook 4145.1 Page 1 of 2 ___________________________________________________________________________ ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ___________________________________________________________________________ form HUD-92541 (4/95) ref. Handbook 4145.1 Page 2 of 2 *U.S. Government Printing Office: 1995 -- 387-734/20077