Newrez Disaster Policy
Disaster Policy
CORR
Page 1 of 11
Published 07.30.2024
Updates are noted in red
Contents
Chapter 7A Overview ..................................................................................................... 2
7A.1 Definitions ............................................................................................................................................................. 2
7A.2 FEMA Presidentially Declared Major Disaster Areas ............................................................................................. 3
7A.3 Conventional Conforming Inspection Requirements ............................................................................................ 3
7A.3(a) Appraisals Completed Prior to Incident Start or End Date .......................................................... 3
7A.4 Appraisals Completed after the Incident Date ...................................................................................................... 4
Chapter 7A.5 FHA Inspection Requirements ...................................................................... 5
Chapter 7A.6 VA Inspection Requirements ........................................................................ 9
Chapter 7A.7 USDA Inspection Requirements .................................................................. 10
Chapter 7A.8 Smart Series Inspection Requirements ........................................................ 11
Newrez Disaster Policy
Disaster Policy
CORR
Page 2 of 11
Published 07.30.2024
Updates are noted in red
Chapter 7A Overview
Newrez Disaster policy is initiated when a Federal Emergency Management Agency (FEMA) Presidentially
Declared Major Disaster Area (PDMDA) is issued in response to a natural disaster event, such as a
hurricane, tornado, wildfire, or flood that caused widespread damage and disruption to the community.
Under the FEMA PDMDA, designated disaster areas are identified by state and counties and by the type of
government disaster assistance provided. When loans secured by properties located in designated counties
that have been authorized for Individual Assistance, certain property inspection and income validation
requirements are required to validate that condition or marketability of subject property or borrower
income have not been negatively impacted by the disaster event. This must be verified prior to closing or
purchasing the loan.
The Correspondent Client must ensure that the property continues to meet the collateral requirements set
forth above and under the No Adverse Origination Circumstances section in the Correspondent Operations
Guide, Chapter 1C, Representations, Warranties, and Covenants.
7A.1 Definitions
1. Declaration Date
The Declaration Date is the date in which the President declare an area a FEMA Major Disaster
Declaration
2. Incident Period
The Incident Period is the time interval during which the disaster-causing incident occurs.
A FEMA Disaster Notification with the affected counties will be published by FEMA at
http://www.fema.gov/disasters
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Disaster Policy
CORR
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The property is considered potentially impacted for 90 days from the Incident Period END date or
date to which FEMA may extend the expiration of the disaster.
The disaster “Declaration Date” is the date in which FEMA announces a Major Disaster Declaration
and any aid has been made available.
7A.2 FEMA Presidentially Declared Major Disaster Areas
If the subject property is in a county where a Major Disaster Declaration with Individual Assistance
has been issued, an acceptable recertification of value and property inspection (see below) is
required prior to closing the loan.
If the property is in a county where a Disaster Declaration with Public Assistance or an Emergency
Declaration has been issued, or the property is within proximity to a Federally declared disaster
areas, no additional action is required.
Revalidation of employment and income may be required, as per guidance below.
Newrez does not require a specific form or damage inspection report. Inspections must be performed by a
certified appraiser, qualified professional (e.g., home inspector, engineer, etc.) or disaster inspection
company. Inspections for FHA loans must be performed by the original FHA appraiser or approved FHA
roster appraiser. Below are recommended options to certify the property condition:
Disaster Area Inspection Report (DAIR)
Desktop Underwriter Property Inspection Report (Form 2075)
Appraisal Update and/or Completion Report (Form 1004D/442)
All federally declared disaster areas with Incident End Dates within the past 12 months can be found on the
FEMA Disaster website.
7A.3 Conventional Conforming Inspection Requirements
7A.3(a) Appraisals Completed Prior to Incident Start or End Date
One of the following is required:
Newrez Disaster Policy
Disaster Policy
CORR
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A Correspondent client certification, with photos, which represents and warrants that
the property has not sustained damage and that the subject property is in marketable
condition with no required repairs or adverse conditions. This Correspondent Client
certification option is not eligible for Cash-out refinances.
A Disaster Inspection Report with photos evidencing the property is free from damage
and the disaster had no effect on the value or marketability is required. If the Disaster
Inspection Report or Attestation reveals more than minor cosmetic damage, a new
interior and exterior appraisal report is required, and all damage must be repaired prior
to closing and purchase by Newrez. Below are recommended forms to certify the
property condition:
Disaster Area Inspection Report (DAIR)
Desktop Underwriter Property Inspection Report (Form 2075)
Appraisal Update and/or Completion Report (Form 1004D/442)
A letter on the appraiser's letterhead bearing an original signature
If the property inspection reveals more than minor cosmetic damage, a new interior appraisal is
required, and all damage must be repaired prior to closing and/or purchase by Newrez.
7A.4 Appraisals Completed after the Incident Date
Appraisal Date
Appraisal Type
After the “Incident
Period” end date
Standard (Full) appraisal
The “Incident Period” is
within 90 days of initial
application date and
within 90 days of
disaster expiration date
Appraisal Waiver, ACE, or
another reduced appraisal type
(per DU/LPA)
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Disaster Policy
CORR
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Recommended forms to certify the property condition:
Disaster Area Inspection Report (DAIR)
Desktop Underwriter Property Inspection Report (Form 2075)
Appraisal Update and/or Completion Report (Form 1004D/442)
A letter on the appraiser's letterhead bearing an original signature
Minor cosmetic damage is defined as damage that would not warrant an insurance claim and so
minor as not to impact the safety, soundness, structural integrity, security, or preservation of the
property. Minor cosmetic damage examples include but are not limited to:
Landscaping damage
Cracked or damaged exit doors
Marred paint surfaces
Cracked window glass
7A.5 FHA Inspection Requirements
Pending mortgage closings or endorsement in a declared disaster require a damage inspection that
identifies and quantifies any dwelling damage.
The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows
no damage to the property. If the original appraiser is not available, another FHA Roster Appraiser may
complete the disaster inspection. The original appraisal report must be provided to the appraiser
completing the damage inspection report and be able to certify that his or her personal inspection of the
building revealed no indications of significant disaster related damages.
The report must be dated after the earlier of the Incident Period end date or 14 days from the
Incident Period start date;
The appraiser may, at their discretion, perform a Remote Observation of the Property;
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Disaster Policy
CORR
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If the effective date of the appraisal is on or after the date required above for an inspection, a
separate damage inspection report is not required;
The appraiser is not required to ensure utilities are on at the time of this inspection if they have
not yet been restored for the area.
All damages must be repaired by licensed contractors or per local jurisdictional requirements. All
damages, regardless of amount, must be repaired and the property restored to pre-loss condition
with applicable documentation.
Newrez and FHA do not require a specific form or damage inspection report. Below are recommended
forms to certify the property condition:
Disaster Area Inspection Report (DAIR)
Desktop Underwriter Property Inspection Report (Form 2075)
Appraisal Update and/or Completion Report (Form 1004D/442)
A letter on the appraiser's letterhead bearing an original signature
Refer to our Product Summaries for possible exceptions to the Disaster Policy.
Appraisal completed on or
prior to the disaster
“Incident Period” end date
The original appraiser or another FHA Roster Appraiser must re-inspect the
property and include the following:
Interior and Exterior inspection with photos, dated after the earlier of
the Incident Period end date or 14 days from the Incident Period start
date;
A statement as to the dwelling habitability;
Property is free from damage and has not sustained any flooding
and/or windstorm damage; and
A statement as to whether sustained damage is above or below $5000.
If the re-inspection indicates damage below $5000 and the property is
habitable, one of the following must be met prior to closing:
A re-inspection showing that repairs have been completed, or
Established repair escrow (Refer to Newrez’s Escrow Holdback policy).
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Disaster Policy
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If the re-inspection indicates damage above $5000 or the property is not
habitable, the following must be met prior to closing the loan:
An interior and exterior re-inspection showing that the repairs have
been completed, and
Appraiser must state that the property is habitable.
Appraisal completed after
the “Incident Period” end
date (or 14 days from the
Incident Period start date,
whichever is earlier), up to
the expiration date of the
disaster (90 days from the
end of the “Incident
Period”)
Full appraisal with interior and exterior inspection is required. The appraiser
must address the physical condition of the site and improvements as well as
the impact of any damages to the property value and marketability if the
inspection occurs within 90 days of the incident end period.
The appraiser must include the following:
Interior and Exterior inspection with photos,
A statement as to the dwelling habitability,
Property is free from damage and has not sustained any flooding
and/or windstorm damage, and
A statement as to whether sustained damage is above or below $5000.
If the damage exists and is below $5000 and the property is habitable, one
(1) of the following must be met prior to closing the loan:
A re-inspection showing that repairs have been completed, or
Establish repair escrow (Refer to Newrez’s Escrow Holdback policy).
If damage exists and is above $5000 or the property is not habitable, the
following must be met prior to closing the loan:
An interior and exterior re-inspection showing that the repairs have
been completed, and
Appraiser states that the property is habitable.
Loans Pending Mortgage
Endorsement
The appraiser must complete an exterior inspection with photos.
If damage exists and is below $5000 and the property is habitable, one of
the following must be met prior to closing the loan:
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Disaster Policy
CORR
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Updates are noted in red
A re-inspection showing that repairs have been completed, or
Establish repair escrow (Refer to Newrez’s Escrow Holdback policy).
If damage exists and is above $5000 or the property is not habitable, the
following must be met prior to closing the loan:
An interior and exterior re-inspection showing that the repairs have
been completed, and
Appraiser states that the property is habitable.
FHA Streamline Refinance
(No appraisal)
No inspection required.
Appraisal completed with
Remote Observation
Remote Observation is a technology-based method that allows the
Appraiser to directly observe the Property characteristics, concurrently and
in coordination with another individual at the Property. The technology
must provide data capture of the observation and include metadata with
geocoding for location confirmation
Required Analysis and Reporting:
All required visual exhibits and photography images for the applicable
scope of work must be included. A Remote Observation option is only
available in connection with:
Damage inspections in a Presidentially-Declared Major Disaster
Area or
Completing the Certification of Completion section of Fannie Mae
Form 1004D/Freddie Mac Form 442, Appraisal Update and/or
Completion Report, for the reobservation of a Property.
When using a Remote Observation technology, the appraisal report must
include a certification that states the visual inspection was performed with
Remote Observation and the technology verified the location of the
Property.
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Disaster Policy
CORR
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Updates are noted in red
All damage must be repaired by licensed contractors or per local jurisdictional requirements. All damages,
regardless of amount, must be repaired and the subject property restored to pre-loss condition with
appropriate and applicable documentation.
7A.6 VA Inspection Requirements
Pending mortgage closings or endorsement in a declared disaster require a damage inspection that
identifies and quantifies any dwelling damage.
Loans Closed Prior to Natural
Disaster
Any loan closed prior to the date of the declared disaster is eligible for VA
Guaranty without regard to the disaster.
Appraisal completed on or prior
to the Natural disaster end date
and not closed
Exterior inspection performed by a VA approved appraiser is required.
Appraiser must address the physical condition of the site and
improvements as well as the impact of any damages to the property value
and marketability and if damage is noted an interior inspection must also
be performed.
The following items must be submitted with the VA guaranty request:
Lender Certification, signed with title and dated
This is to affirm that the property which is security for VA loan number
_________has been inspected to ensure that it was either not
damaged in the recently declared disaster or has been restored to its
pre‐disaster condition or better.
Veteran Certification, signed and dated
I have inspected the property located at ____________and find its
condition now to be acceptable to me. I understand that I will not be
charged for any disaster‐related expenses and now wish to close the
loan.
If local law requires the property to be inspected and approved by the
local building inspection authority, a copy of the appropriate local report(s)
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Disaster Policy
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must be provided. Neither VA nor the veteran purchaser shall bear the
expense of any disaster‐related inspection or repairs.
Decline in Value
If there is an indication that the property, despite repairs, will be worth
less at the time of loan closing than it was at the time of appraisal, the VA
appraiser must update the original value estimate. The payment of the
appraiser’s fee for that service will be a contractual matter between the
buyer and seller.
If the property value has decreased, the loan amount must be reduced
accordingly.
Appraisal completed after the
“Incident Period” end date up to
the expiration date of the
disaster (90 days from the end
of the “Incident Period”)
Full appraisal with interior and exterior inspection required. Appraiser
must address the physical condition of the site and improvements as well
as the impact of any damages to the property value and marketability if
the inspection occurs within 90-days of the disaster end period.
VA IRRRL (No appraisal)
No inspection is required.
7A.7 USDA Inspection Requirements
USDA Streamlined-Assist and Streamline without Appraisal Refinance do not require Disaster
Inspections.
Loans with an appraisal date prior to the declared disaster Incident Date requires a Disaster
Inspection Report with photos evidencing the property is free from damage and the disaster had
no effect on value or marketability.
Newrez and USDA do not require a specific form or damage inspection report. Below are recommended
forms to certify the property condition:
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Disaster Policy
CORR
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Updates are noted in red
Disaster Area Inspection Report (DAIR)
Desktop Underwriter Property Inspection Report (Form 2075)
Appraisal Update and/or Completion Report (Form 1004D/442)
A letter on the appraiser's letterhead bearing an original signature
7A.8 Smart Series Inspection Requirements
Refer to Conforming Inspection requirements.
Revision History
Date
Non-Agency Inspection Requirements
August 31,2021
Overview-Borrower Attestation Requirements -Added
October 31, 2021
Removed Appraisals dated on or before September 3, 2021
August 22, 2022
Removed: requirements shown in Correspondent Operations Guide Ch 1C
Removed: Appraisals dated on or before September 3, 2021
Added definition of incident date based on FEMA website and reporting tool
Removed County declaration information and references to Incident Start Date, End Date
and Incident period
Added Conventional inspection options for appraisals dated prior to FEMA incident date
Removed Conventional disaster inspection report content and inspector qualifications
Removed: Age of Underwriting (Employment, Credit or Asset) documents as of note
date throughout for Fannie Mae, Freddie Mac and VA sections
Updated VA Disaster Policy to change incident date to declaration date
May 30,2024
Removed VA requirement to complete VA Loan Summary Sheet (VA Form 26-0286) per
VA announcement manual 16-7 (lenders handbook A and B updates as of 05.20.204
removing this form
Added information about Remote Observations
July 30, 2024