In the August 26, 2014, Federal Register (79 FR 50838), the Federal Housing Administration (FHA) published a final rule (click here) that revises two FHA single family adjustable rate mortgage (ARM) regulations. The final rule revises §203.49(d)(2) to require that an interest rate adjustment resulting in a corresponding change to the mortgagor’s monthly payment for a FHA-insured ARM have a 45-day look-back period. The final rule revises §203.49(h) to require that the mortgagee of an FHA-insured ARM comply with the disclosure and notification requirements of §1026.20(c) and (d) of Regulation Z, including at least a 60-day but no more than 120 day advance notice of an adjustment to a mortgagor’s monthly payment. This change to FHA ARM regulations is to align FHA interest rate adjustment and notification regulations with the requirements for notifying mortgagors of ARM adjustments, as required by §1026.20(c) and (d) of Regulation Z. Effective January 10, 2015, the final rule revises FHA’s ARM regulations in 24 CFR §203.49(d)(2) and (h) as follows: (Note: We have underlined the final rule revisions.)

Complete Memorandum