III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages 2. Default Servicing Handbook 4000.1 1307 Last Revised: 8/12/2026 • reusing and rekeying existing locksets at sheds and outbuildings to the dwelling key code, if possible; • securing shed and outbuilding doors with a padlock and hasp if no other locking mechanism exists; and • boarding/securing the outbuildings if no doors or other securing mechanism exists. The Mortgagee may convey with boarded/secured outbuildings and sheds without prior approval. (v) Windows and Glazing The Mortgagee must secure all windows by: • employing or installing locking mechanisms on all windows; • removing all broken glass debris from the interior and exterior of the Property; and • replacing broken or cracked window glazing. Where the AHJ requires replacement of dual-pane, tempered, thermal-sealed or other specialized glazing in kind, the Mortgagee must obtain prior over-allowance approval from the MCM. The Mortgagee must not brace, nail shut, or otherwise block or damage the windows. (vi) Boarding/Securing of Property Openings Resecuring due to Vandalism or Unauthorized Property Access The Mortgagee must resecure and reglaze windows, doors, and other access openings when the Property has been vandalized or accessed without authorization. Boarding/Securing Required by the AHJ The Mortgagee may secure windows, doors, and other access openings by boarding/securing, if required by an AHJ, and may convey with such boarding/securing in place. Boarding/Securing where Unable to Secure by Other Methods The Mortgagee may request approval from the MCM to board/secure openings that cannot be protected by any other method or where an imminent safety hazard exists, and to convey with boarding in place. All boarding/securing materials that are leased or rented for the Mortgagee’s convenience must be removed prior to conveyance of the Property to HUD.

D. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages 3. Acceptable Reporting Forms and Protocols (04/10/2025) Handbook 4000.1 829 Last Revised: 8/12/2026 The Appraiser must analyze and report any long-term stigma caused by the Property’s contamination by meth and the impact on value or marketability. iii. Wood Destroying Insects/Organisms/Termites The Appraiser must observe the foundation and perimeter of the buildings for evidence of wood destroying pests. The Appraiser’s observation is not required to be at the same level as a qualified pest control specialist. If there is evidence or notification of infestation, including a prior treatment, the Appraiser must mark the evidence of infestation box in the “Improvements” section of the appraisal and make the appraisal subject to inspection by a qualified pest control specialist. n. Repair Requirements (09/14/2015) When examination of New or Existing Construction reveals noncompliance with MPR and MPS, the Appraiser must report the repairs necessary to make the Property comply, provide an estimated cost to cure, provide descriptive photographs, and condition the appraisal for the required repairs. If compliance can only be effected by major repairs or alterations, the Appraiser must report all readily observable property deficiencies, as well as any adverse conditions discovered performing the research involved in completion of the appraisal, within the reporting form. Regardless of the Appraiser’s suggested repairs, the Mortgagee will determine which repairs are required. i. Limited Required Repairs The Appraiser must limit required repairs to those repairs necessary to: • maintain the safety, security and soundness of the Property; • preserve the continued marketability of the Property; and • protect the health and safety of the occupants. ii. As-Is Condition and Cosmetic Repairs The Appraiser may complete an as-is appraisal for existing Properties when minor property deficiencies, which generally result from deferred maintenance and normal wear and tear, do not affect the health and safety of the occupants or the security and soundness of the Property. Cosmetic or minor repairs are not required, but the Appraiser must report and consider them in the overall condition when rating and valuing the Property. Cosmetic repairs include missing handrails that do not pose a threat to safety, holes in window screens, cracked window glass, defective interior paint surfaces in housing constructed after 1978, minor plumbing leaks that do not cause damage (such as a dripping faucet), and other inoperable or damaged components that in the Appraiser’s professional judgment do