HOC Reference Guide -- Closing Costs and Other Fees(Page 2-15) (2024)

HUD HOC Reference Guide

Closing Costs and Other Fees

Mortgage lenders may collect from the borrower those customary and reasonable costs necessary to close the mortgage with the exception of the Tax Service fee, which may not be charged to a borrower. Lenders are reminded that aggregate charges may not violate FHA?s tiered pricing rules and that all charges must be properly disclosed to the borrower(s).

FHA no longer limits the origination fee to 1% of the mortgage amount for its standard mortgage insurance programs, however, both the HECM and 203k Rehabilitation Mortgage programs are still limited to their origination fee limitation, which is the greater of $2,000 or 2% for the Maximum Claim Amount for HECMs and 1% for 203k loans. For 203k loans, a supplemental origination fee may be charged (refer to the 203k parameters in the 4155.1 for limitation of the supplemental fee).

Please see: Mortgagee Letters Handbook 4155.1, Section 5.A