FHA Loan Builder Documentation and Warranties for a New Build

The Quick Read: An FHA-financed new build needs paperwork from the builder, not just from you. The builder certifies the plans, specs and site, signs a one-year completion warranty, and the file must show permit and inspection evidence. The old ten-year warranty requirement is gone, but the builder warranty is still a condition of FHA insurance.

Here is the short version for a buyer in a hurry. Three things decide whether a new-build file moves forward: the construction status when the appraisal is ordered, whether the required inspection evidence exists, and whether the builder signs both HUD forms. Everything below walks through those in order.

What Counts as “New Construction” for FHA?

A home counts as new construction in three situations: it has not been built yet, it is being built, or it was finished less than a year ago. Lenders sort files into three buckets: proposed construction, under construction, and existing less than one year.

• Proposed: no concrete or permanent material has been placed yet.
• Under construction: building has started but the home is not 100% complete and has no certificate of occupancy.
• Existing less than one year: the home is 100% complete and under a year old.

That last bucket surprises people. A home that looks finished and move-in ready can still fall under the new-construction paperwork rules if it is newly completed. Ask the builder early which bucket your home sits in, because it drives which documents the file needs.

Across the wholesale programs Lendmire places FHA files with, the status at appraisal is the first thing a loan officer checks on a new build. It sets the whole document list.

How Is the Loan Underwritten, Step by Step?

The underwriting path for a new build adds builder and inspection steps to the usual file review. In order:

1. Classify the construction status. Proposed, under construction, or recently completed.

2. The builder certifies the plans, specs and site. This is form HUD-92541, the Builder’s Certification of Plans, Specifications, & Site. In it, the builder agrees to give the lender a completed HUD-92544 on properties eligible for maximum-LTV financing.

3. Inspection evidence is gathered. More on this below.

4. The appraiser values the home. On a new build, the appraisal works against the plans and specifications. It also checks conformance and health and safety.

5. The lender assembles the case binder. It holds the builder forms, the inspection evidence and other certifications, and goes to HUD for endorsement.

6. Buyer and builder sign HUD-92544 at closing. Each gets a copy, and a copy goes in the binder.

Your own file runs alongside this. Credit, income and ratios are reviewed the usual way: the base pair is 31/43 with no compensating factors, and documented compensating factors can reach 40/50 at the top tier, though the automated finding governs most files. You can see how Lendmire’s FHA loan programs fit a purchase before you commit to a builder.

Which Builder Documents Does the File Need?

Two HUD forms carry most of the weight. Here is who does what.

HUD-92541, the builder’s certification. This form covers proposed construction, homes under construction, and dwellings finished less than one year before. Its edition date on HUD’s page is 10/2024. If your builder has never seen it, that is a flag worth raising early.

HUD-92544, the Warranty of Completion of Construction. The builder warrants that the home is built in substantial conformity with the plans and specifications. HUD’s rule describes the purpose in two parts: it gives FHA assurance the home was built according to plan, and it protects the buyer against defects in equipment, material or workmanship. Completed copies go to both the buyer and the builder at closing, according to HUD’s own form.

Not optional. HUD retained this warranty as a condition of FHA mortgage insurance on new construction.

What Inspections and Permits Does FHA Look For?

The lender needs evidence the home was built properly, and there is more than one way to show it. Under HUD Mortgagee Letter 19-04, the lender may obtain copies of the building permit and certificate of occupancy, or three inspections (footing, framing and final) by a qualified ICC-certified inspector on form HUD-92051.

That letter also describes the older FHA Inspector Roster, which covered limited cases such as a local jurisdiction that did not run its own inspections and CO issuance. Later Handbook language was revised and consolidated, so the exact current wording sits in Handbook 4000.1, Section II.A.8. Your loan officer should confirm which pathway applies to your property.

The borrower may be charged an inspection fee in some situations. Ask about it at the start, and expect it on your Loan Estimate if it applies.

Two edge cases come up often:

• Manufactured housing needs form HUD-92051. A 1004D appraisal update cannot replace it.
• Modular homes have historically needed fewer inspections than site-built homes. Confirm the current rule in the Handbook before assuming.

Termite protection also matters. A treated-lumber sill alone generally does not satisfy FHA’s termite requirement, so ask your builder what method they use and get it in writing.

The Ten-Year Warranty: What Changed

The ten-year warranty is no longer required. HUD removed it from Handbook 4000.1 through a Mortgagee Letter, and the same change was made as a final rule. According to the Federal Register final rule, the rule removed the regulations requiring borrowers to buy ten-year protection plans for certain mortgages on newly built single-family homes.

HUD gave its reasons. It said the inspection requirements and the Warranty of Completion of Construction assure quality more effectively, without the added cost. It also said it found no record of a claim against the ten-year warranty that led to an FHA claim. The change removed a significant cost to FHA borrowers.

Here is why you may still see conflicting advice. Some older articles, and some pages written for warranty companies, still describe a long-term structural warranty as a live requirement. It is not an FHA requirement now. Some builders still offer a longer plan on their own, and some buyers choose third-party coverage. That is your decision, not an FHA mandate. If a builder offers one, ask what it covers and who stands behind it.

Other agencies differ. VA and USDA have their own warranty rules, so do not assume FHA’s apply to those loans.

Does FHA Guarantee the Builder’s Work?

No. The warranty belongs to the builder. HUD keeps a role: the FHA Commissioner reserves the right to make a final determination about whether a defect exists and whether the builder must fix it. But the promise to repair comes from the builder’s document.

The warranty covers only nonconformities you report in writing within one year of the date title was conveyed. Practical steps:

• Keep your copy of HUD-92544 with your closing papers.
• Put the one-year deadline on your calendar.
• Report defects in writing, with dates and photos.
• Keep copies of everything you send.

Waiting until month eleven to look for problems can put the protection at risk.

Is the Appraisal a Home Inspection?

No. The appraiser estimates value and checks conformance and health and safety. Required inspections are separate documents. Neither one replaces a home inspection you hire yourself. On a new build, many buyers still pay for an independent inspection, such as one before the drywall goes up and another near completion. FHA does not require it, but it is your best view into what the paperwork cannot show.

Key Terms Defined

Proposed construction: A home where no concrete or permanent material has been placed yet.

Certificate of occupancy (CO): A local authority’s sign-off that a finished home may be lived in.

HUD-92541: The builder’s certification of plans, specifications and site.

HUD-92544: The builder’s one-year Warranty of Completion of Construction, signed by builder and buyer.

Case binder: The lender’s file of forms and certifications that goes to HUD for endorsement.

What a Builder Walk-Through of the Timeline Looks Like

Picture a buyer who signs a contract on a home that is only a lot and a set of plans. The status is proposed. The builder signs the certification early. The lender orders the appraisal against the plans and specs. During building, the footing, framing and final inspections happen, or the permit and CO are collected, depending on the pathway. At closing, buyer and builder sign the warranty and each takes a copy. The lender sends the binder to HUD.

Where this goes wrong: a missing CO, a failed inspection, or an unsigned form can hold up endorsement. A new build cannot close until the required documents exist. That is a practical consequence of HUD’s requirements, so build slack into your contract dates and your move-out plans.

Where the General Rule Breaks

• A builder who cannot or will not sign. Without the certification and warranty, an FHA file on that home stalls. Ask about this before you sign a purchase contract, not after.
• A home finished less than a year ago. It still counts as new construction.
• Open health, safety or code items. These must be resolved before the deal works forward.
• Owner-builders. Expect a very different path; talk to a loan officer first.
• Another loan type. If you are looking at VA or USDA, the warranty rules are different.

A Buyer’s Pre-Closing Checklist

• Builder has signed HUD-92541.
• Permit and CO, or footing, framing and final inspections, are in the file.
• Termite protection method is documented.
• Any open health, safety or code items are cleared.
• You have your signed copy of HUD-92544 and the date title is conveyed.
• You have calendared the one-year defect-reporting deadline.

If you are buying a home and want to see whether an FHA loan fits your file, Lendmire can help you compare the options and what each one asks of the file.

For your own numbers, request a scenario review with Lendmire.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. HUD-92544, Warranty of Completion of Construction

2. HUD Mortgagee Letter 19-04, new construction inspections

3. Federal Register final rule, Streamlining Warranty Requirements