On Jan 14, HUD updated single family nonprofit program requirements
HUD issued Mortgagee Letter 2025-05 updating application and recertification requirements for nonprofit entities seeking approval to participate in certain programs.
Updates to be incorporated into a forthcoming update of the HUD Handbook 4000.1.
Approval and Recertification Procedures
Mortgagee letter streamlines and simplifies the application and recertification requirements nonprofits must meet to participate in single-family nonprofit programs.
Expands relevant experience requirements to draw more eligible nonprofits to program
Updates definition of relevant experience to add new construction as acceptable experience, removes requirement for 2 of 5 relevant experience years be consecutive.
Defines information to be provided for relevant experience and clarifies exceptions.
Revises allowable net development costs for nonprofits that acquire, rehabilitate, resell HUD REO properties by eliminating requirement grant funds be excluded from proceed
Permits 18 months’ worth of mortgage interest, up from 6, to be counted as an NDC.
Removes requirement to submit complete nonprofit application at recertification.
Effectiveness
Provisions of Mortgagee Letter 2025-05 may be implemented immediately but must be implemented no later than 180 days from date of Mortgagee Letter, Jul. 12, 2025.
