FHA Single Family Handbook 4155.2 ch. 6 & 12 provide instructions on how to create mortgage forms which are acceptable to FHA. While the Uniform Covenants of such documents are required to follow (verbatim) the Uniform Covenants of the FHA Model Mortgage Form, the non-uniform covenants:
“. . . should contain provisions required to adapt the mortgage to the laws and practices of the particular jurisdiction in which the property is located. The text of these paragraphs should be the same as the FNMA/FHLMC non-uniform covenants for the jurisdiction in which the property is located. Changes to the FNMA/FHLMC paragraphs, and additional material, may be included if needed, to conform to requirements of state law or practice.” (Ibid. ch. 12.A.2.f)
The FNMA/FHLMC language referred to is the language used in the “approved” FNMA/FHLMC uniform security instruments (see Ibid. ch. 12.A.2.a). The approved security instruments are the 1990 versions rather than the current 2001 versions (see FHA ML 2009-13 and 2002-03).
In regards to New York, one notable difference between the 1990 and 2001 versions of FNMA Form 3033 is the absence from the former of the “Borrower’s Statement Regarding the Property,” which appears in the latter as Covenant 25.
This Covenant is primarily included in order to identify what type of property is being secured by the mortgage, for the benefit of the recorder. For properties secured by a one or two family residence or dwelling, a recording tax deduction of $25 may be extended (see N.Y. Tax Law § 253[a] [McKinney 2013]).
Since both New York law allows for this credit and it is a common practice for lenders to include the “Borrower’s Statement Regarding the Property” section in the mortgage in order to obtain this credit, we will be including this section in Cx396 (as Covenant 21), since FHA allows for the adaptation of the 1990 version of the FNMA/FHLMC non-uniform covenants to conform to “the laws and practices” of a jurisdiction. Current Covenant 21 (the Riders to This Security Instrument section) will be renumbered as Covenant 22.
This change will take effect on May 21, 2013. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
May 14, 2013