How to Get a Ten-Year Warranty for an FHA Loan on a New Build

The Quick Read: The FHA no longer requires a ten-year warranty on a new build, so you can finance a new home without one. A one-year builder warranty is still mandatory. If you want ten years of coverage, you can buy or negotiate a private plan as an optional extra. It does not replace the required paperwork, and it does not change how the loan is reviewed.

What Counts as New Construction on an FHA Loan?

A home is “new construction” if it is not built yet, is still being built, or is finished but less than a year old. Each stage changes what the file needs.

Here is the short list:

• Proposed: no concrete or permanent materials have been placed yet.
• Under construction: the build is underway.
• Existing less than one year: finished, but not yet a year old.

The program basics stay the same across all three. Across the wholesale lenders Lendmire works with, FHA loan programs allow financing up to 96.5% of the value with a 3.5% minimum investment. That applies at a decision score of 580 or higher, subject to lender guidelines and full file review. The home must be your principal residence, one to four units. An upfront mortgage insurance premium of 1.75% of the base loan is financed into the balance. An annual premium also applies, and it depends on term, loan amount and LTV.

That 96.5% figure is the point. Under the old rule, a new build without a ten-year plan could not reach that level of financing. Today the build stage and the builder’s paperwork matter more than a plan purchase.

Buying your first new build? Lendmire’s piece FHA Loan New Build Requirements for a First-Time Buyer covers the buyer-side checklist in more detail.

How Is an FHA Loan on a New Build Underwritten?

Underwriting a new build means checking the builder’s paperwork, the inspection evidence, and the appraised value. A ten-year plan is not one of the checks. Here is the sequence on a typical file.

1. The lender classifies the property. Proposed, under construction, or existing under a year. That sets which documents apply.

2. The builder certifies the plans and site. Form HUD-92541, the Builder’s Certification of Plans, Specifications, and Site, goes into the loan file. HUD Mortgagee Letter 2020-36 lists it as a required document.

3. The builder and buyer sign the warranty form. That is Form HUD-92544, the Warranty of Completion of Construction. The same letter makes it a requirement for all new construction.

4. Inspections happen as applicable. The lender can rely on local-authority evidence, such as a building permit and certificate of occupancy. It can also use an inspection by a certified inspector. Your lender confirms which evidence fits your build.

5. The appraiser values the as-built home. The appraisal has to support the price you agreed to pay.

6. The loan closes with the signed warranty form on file. The builder delivers the certifications, and the lender files the warranty.

The same letter eliminated the old Early Start Letter and pre-approval steps. It also made the paperwork the same whatever the LTV. That means a buyer at maximum financing and a buyer with a bigger down payment submit the same set of builder documents.

Builder paperwork is where files stall. A missing certification, a late permit or an unfinished final inspection can hold up a closing. Ask the builder early for the certifications and the final inspection plan.

Is a Ten-Year Warranty Still Required?

No. The requirement was removed, and it has stayed removed. HUD Mortgagee Letter 2019-05 implemented a final rule that eliminated the Insured Ten-Year Protection Plan requirements. It took effect in March 2019. HUD’s Federal Register final rule says it removes the regulations that required borrowers to buy ten-year plans to qualify for certain mortgages on newly built single-family homes.

Here is what changed.

HUD gave several reasons. It pointed to better building technology and to uniform building codes with stricter local enforcement. It also noted that a 2008 housing law had already removed the statutory mandate. The inspection requirements and the builder’s warranty of completion do the quality-assurance job better than the ten-year plan, without the added cost.

That cost point matters to you. In its earlier proposed rule, HUD noted that builders factor the cost of the plan into the home price. So a buyer paid for the plan whether or not the builder listed it as a line item.

One caution on dates. The change applies by FHA case-number assignment date. Files with older case numbers follow the older rules, so do not apply the new rule to them.

What Does the One-Year Builder Warranty Cover?

It covers defects in equipment, material and workmanship. Form HUD-92544 sets the warranty period at one year from the transfer of title. For items finished later, the year runs from completion.

That is the coverage FHA still requires. A few points matter in practice:

• The builder gives it, not an outside company.
• It is signed by the builder and the buyer, then filed by the lender.
• It does not make the home defect-free. HUD itself acknowledged that eliminating all construction defects is likely not feasible.

After year one, you carry the risk of hidden structural defects yourself. A private plan is how you shift some of that risk.

How Do You Get a Ten-Year Warranty Anyway?

You get one by asking the builder to offer it, or by buying a private plan. FHA does not require it, so you are shopping for protection, not meeting a lending rule. Here is the usual route.

1. Ask the builder up front. Many builders already offer an insurance-backed ten-year plan. Ask before you sign the sales contract, because that is when you have the most leverage.

2. Ask who stands behind it. The plan should be backed by an insurer or a financially sound issuer. A promise from the builder alone is only as good as the builder’s business.

3. Read what it covers. Plans often separate coverage into tiers. Short-term workmanship comes first, then systems, then long-term structural defects. Look closely at exclusions and at how claims are filed.

4. Check whether it transfers. If you sell during the term, transferable coverage may help the next buyer.

5. Negotiate who pays. The cost can come from the builder, from you, or from both through the price. Ask for the cost in writing.

6. Keep the required form anyway. A longer warranty never replaces Form HUD-92544. Both go in the file.

The plan costs money, so ask for a written quote. The cost is outside your loan terms. It is a separate purchase decision.

Is it worth it? That is a real toss-up. A buyer in a first-time build with a thin cash cushion may value the protection against a big structural repair in year five. A buyer building with an established builder, strong local inspections and a solid emergency fund may skip it. The loan works either way.

Where the Rules Bend

The general rule has some bends worth knowing.

• Old information is everywhere. Many lender pages and blogs still describe the pre-change rule. If a page says you must buy a ten-year plan to reach high leverage, check its date.
• Other programs differ. VA, USDA and conventional loans have their own rules. Do not assume they match FHA’s. VA historically shared the combined warranty form, but check the program you are using.
• Property types vary. Condos and manufactured homes can raise their own questions. Ask your lender to confirm how the change applies to your property type.
• Occupied homes under a year old. A home that has been lived in may be treated as existing construction rather than new. Your lender decides how to classify it.
• Lender overlays exist. A lender may add its own conditions on top of FHA’s. Those vary, so ask.
• Case-number timing. A file whose case number was assigned before the change may follow the pre-change rule, so confirm with your lender which version applies to your file.

Key Terms Defined

Ten-year warranty (ten-year plan): A private, insurance-backed plan covering structural defects in a new home for up to ten years. FHA once required it on some new builds. It is now optional.

Builder warranty (Form HUD-92544): The one-year warranty the builder and buyer sign on a new FHA-financed home. It covers equipment, material and workmanship.

New construction: A home that is proposed, under construction, or finished less than a year ago.

LTV (loan-to-value): The loan amount as a percentage of the home’s price or appraised value.

Builder’s certification (Form HUD-92541): A form where the builder certifies the plans, specifications and site.

Case number: The number FHA assigns to your loan file. Its assignment date decides which version of the rules applies.

What to Ask Your Builder and Your Lender

Walk into the first meeting with these questions.

• Do you offer an optional ten-year plan, and who insures it?
• Can I see the plan’s coverage tiers, exclusions and claims process in writing?
• When will you deliver the certifications and the signed warranty form?
• What is your schedule for the final inspection and the certificate of occupancy?

• How do you classify my home: proposed, under construction, or existing under a year?
• Which inspection evidence do you accept for my build?
• Do you add any conditions beyond the FHA minimums?
• Does my property type, such as a condo or manufactured home, change the file?

Picture a buyer at 96.5% financing on a spec home that is nearly finished. The ten-year plan has no effect on that leverage. The file turns on whether the builder’s certifications are dated correctly, whether the final inspection evidence is in, and whether the appraisal supports the price. That is where to spend your attention.

If you are buying a new 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 is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. HUD Mortgagee Letter 2020-36

2. HUD Mortgagee Letter 2019-05

3. Federal Register Final Rule 2018-27116

4. Federal Register Proposed Rule 2013-02668 (govinfo)

5. Form HUD-92544, Warranty of Completion of Construction