In an effort to address questions and concerns about HUD-insured facilities (FHA’s Section 232 and 242 mortgage insurance programs) and the COVID-19 pandemic, HUD (Office of Healthcare Programs) has provided guidance, and possibly some relief, for borrowers.
On April 6th, HUD published this list of FAQs for External Stakeholders. Of specific note is question five (Q5) on page six:
Will HUD be flexible as to the use of Reserve for Replacement or Other Escrow Account funds during the COVID-19 response?
HUD says that in response to the National Emergency declaration, effective immediately through June 30, 2020, Lenders have the ability to approve certain types of transactions without the need for a formal HUD review. That is, if the borrower has COVID-19-related expenses, they may be able to use HUD funds to address that need. They should contact their lender to discuss their needs and the desire to use HUD funds.
Please review the FAQs found here and let us know if you have any questions or concerns that we can help with.
