GENERAL REQUIREMENTS FOR PROPERTY AND PRESERVATION OF PROPERTIES SECURED BY FHA INSURED MORTGAGES
Maximum Property Preservation Allowance and Over-Allowable Expense Request
The maximum property preservation allowance is the maximum reimbursement for all P&P expenses on an individual property without MCM approval. Maximum amounts for individual items are set forth in Exhibit B- “Maximum Property Preservation Allowance”. All reimbursements are subject to the maximum allowable amounts.
If the total P&P expense exceeds the $2,500 maximum cost limit in Exhibit B, the mortgagee may submit an over-allowable request in the „Conveyance Overallowables Screen‟ (an electronic version of Form HUD-50002, Request to Exceed Cost Limits), via the web-based P260 portal. The mortgagee must upload all supporting documentation into P260, including a detailed description of what actions were taken, along with verifiable, auditable documentation which includes an itemized list of the repairs, materials used, room dimensions, receipts, and photographs. The MCM will 6
review the requests and supporting documentation and approve, deny or adjust the requested P&P allowance utilizing an industry standard cost estimator. The mortgagee must obtain the MCM‟s decision, which is recorded in P260. Requests must be submitted at least five (5) business days prior to the conveyance due date or will be rejected. However, the mortgagee may request an extension of the conveyance due date. For a one time major repair item, the mortgagee must enter the request and its supporting documentation into the P260 internet based web portal for review and approval or denial by the Mortgage Compliance Manager. The cost of the one time major repair item does not count toward the maximum allowable cost of $2,500 per property for property and preservation expenses.
HUD is not prescribing the amounts that mortgagees may pay for the services performed, but is standardizing a reasonable maximum allowance that HUD reimburses for such services.