FOR ALL NEW CLIENTS, WE WILL GIVE A 15% DISCOUNT OFF YOUR LAST YEAR'S TOTAL AUDIT FEES.

HUD Approval Process - Getting Approved To Process FHA Loans

The approval process required to originate, purchase, hold or sell HUD-FHA insured mortgages can be overwhelming and time consuming. It doesn't have to be that way. Here are answers to frequently asked questions that will help you understand and decide if becoming HUD-FHA approved is right for your company.
                  
The difference between a Title I and Title II mortgage is simple.  A Title I mortgagee is approved to originate, purchase, hold or sell HUD-FHA insured manufactured housing mortgages. While, a Title II mortgagee is approved to originate, purchase, hold or sell HUD-FHA insured mortgages.  A company can be approved as both a Title I and Title II mortgagee.

Title II mortgagees are classified into one of five areas:  (1) Supervised, (2) Nonsupervised, (3) Loan Correspondent (approvals expire in 2010), (4) Investing, and (5) Government Institutions.  First, a Supervised mortgagee is a financial institution that is a member of the Federal Reserve System.  A Nonsupervised mortgagee, on the other hand, is a financial institution when its principal activity is the lending or investment of funds in real estate mortgages.  A Nonsupervised mortgagee funds its HUD-Insured loans directly. They are required to have a HUD-FHA approved underwriter on staff and insure all loans through HUD. They must maintain an escrow account and account for all funds in that account. They can either sell their portfolio or keep their portfolio and service it. This type of mortgagee is often referred to in the industry as an "eagle".  A Loan Correspondent mortgagee is a company that originates HUD-insured loans to sell or transfer to its Sponsor(s).

Elimination of Loan Correspondent Approval for Single Family Programs

Loan Correspondent Approval Expiration

Loan correspondents approved and in good standing will be permitted to retain their approval through December 31, 2010. All loan correspondents that were required to renew their FHA approval on or after March 31, 2010, and prior to May 20, 2010, and that have not yet renewed their approval, must complete their online annual certification and submit their renewal fee via FHA Connection. Failure to complete these items in accordance with existing FHA requirements (i.e., within 90 days of a loan correspondent’s fiscal year end) will result in administrative action.

Loan correspondents with fiscal years ending prior to December 31, 2009, that failed to comply with HUD/FHA annual recertification requirements (i.e. submission of annual certification fee, annual online certification or audited financial statements) will be subject to administrative action. For loan correspondents with fiscal years ending on or after December 31, 2009, and that were required to renew their FHA approval prior to May 20, 2010, FHA will rely on the submission of the prior year’s audited financial statements for the renewal of loan correspondent approval. These loan correspondents must submit the online annual certification and the annual renewal fee or be subject to administrative action leading to the possible withdrawal of their FHA approval as detailed in Mortgagee Letter 2009-01 which is available at: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/index.cfm .

May 20, 2010

FHA no longer accepts any new applications for loan correspondent approval. FHA will complete the processing of loan correspondent applications received prior to May 20, 2010. For those entities that submitted an application for loan correspondent approval on or after May 20, 2010, the application and fee will be returned to the applicant. 

An Investing mortgagee is an organization which is not approved as another type of institution and that invests funds under its own control. Finally, a Government Institution is simply a Federal, State or municipal government agency.

 

HUD Net Worth Requirements (Nonsupervised)

PLEASE NOTE:  THESE REQUIREMENTS CHANGED IN 2010.  PLEASE READ THIS LETTER ISSUED BY HUD:  http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-20ml.pdf 

  1. Nonsupervised -

    FHA is implementing increases to its net worth requirements, and is providing additional accommodations for existing FHA-approved small business lenders and mortgagees. The increases will be carried out in two phases as described below.

    PHASE ONE

    Effective May 20, 2010, all new applicants for FHA approval as a lender or mortgagee, irrespective of size, must possess a net worth of at least $1,000,000, of which no less than 20 percent must be liquid assets consisting of cash or its equivalent acceptable to the Secretary. In addition, all new applicants must use the new HUD Form 92001-A, FHA Lender Approval Application that is available at: http://www.hud.gov/offices/adm/hudclips/ and replaces the HUD Form 11701.

    Effective May 20, 2011, each lender or mortgagee with FHA approval as of May 20, 2010, that exceeds the size standards for a small business as defined by the Small Business Administration at 13 CFR 121.201, Sector 52 (Finance and Insurance), Subsector 522 (Credit Intermediation and Related Activities) 2, must possess a net worth of at least $1,000,000, of which no less than 20 percent must be liquid assets consisting of cash or its equivalent acceptable to the Secretary.

    Effective May 20, 2011, each lender or mortgagee with FHA approval as of May 20, 2010, that meets the size standards for a small business as defined by the Small Business Administration at 13 CFR 121.201, Sector 52 (Finance and Insurance), Subsector 522 (Credit Intermediation and Related Activities), must possess a net worth of at least $500,000, of which no less than 20 percent must be liquid assets consisting of cash or its equivalent acceptable to the Secretary.

    PHASE TWO

    Effective May 20, 2013:

    Participation in Single Family Programs. The final rule provides that, irrespective of size, all applicants for approval and lenders and mortgagees with FHA approval as of or after May 20, 2010, that wish to participate in FHA single family programs must possess a minimum net worth of not less than $1,000,000 plus an additional net worth of one percent of the total volume in excess of $25 million of FHA single family insured mortgages originated, underwritten, purchased, or serviced during the prior fiscal year, up to a maximum required net worth of $2.5 million. Not less than 20 percent of a mortgagee’s required net worth must be liquid assets consisting of cash or its equivalent acceptable to the Secretary.

    Participation in Multifamily Programs with Engagement in Mortgage Servicing. The final rule provides that, irrespective of size, all applicants for approval and lenders and mortgagees with FHA approval as of or after May 20, 2010, that wish to participate in FHA multifamily programs, and that engage in mortgage servicing, must possess a minimum net worth of not less than $1,000,000 plus an additional net worth of one percent of the total volume in excess of $25 million of FHA multifamily insured mortgages originated, underwritten, purchased, or serviced during the prior fiscal year, up to a maximum required net worth of $2.5 million. Not less than 20 percent of a mortgagee’s required net worth must be liquid assets consisting of cash or its equivalent acceptable to the Secretary.

    Participation in Multifamily Programs without Engagement in Mortgage Servicing. The final rule provides that all applicants for approval and lenders and mortgagees with FHA approval as of or after May 20, 2010, that wish to participate in FHA multifamily programs, and that do not engage in mortgage servicing, must possess a minimum net worth of not less than $1,000,000 plus an additional net worth of one half of one percent of the total volume in excess of $25 million of FHA multifamily insured mortgages originated, underwritten, or purchased during the prior fiscal year, up to a maximum required net worth of $2.5 million. Not less than 20 percent of a mortgagee’s required net worth must be liquid assets consisting of cash or its equivalent acceptable to the Secretary.

    Participation in Single Family and Multifamily Programs. All applicants for approval and lenders and mortgagees with FHA approval as of or after May 20, 2010, that wish to participate in both FHA single family and multifamily programs must meet the higher net worth requirements for single family mortgagees.

    All applicants for FHA lender approval or renewal, except for government mortgagees, are required to submit audited financial statements as a condition of their approval or renewal. Previously, this requirement only applied for non-supervised lender approval and renewal. However, applicants for approval or renewal as supervised or investing mortgagees, in addition to non-supervised mortgagees, are now required to submit audited financial statements.

FHA/HUD Audit Fixed Pricing Schedules


FHA/HUD Audit Fixed Pricing Schedules

1. Check HUD's Standard Fee schedule on-line for current information.
                

2. Annual Audit Fees:  Annually your company is required to be audited by a certified public accountant (CPA). Most CPA firms charge on an hourly basis with hourly various billing rates.  Our quotes are not an estimate – they are the actual fees charged with NO hidden costs or extras.

 

FOR ALL NEW CLIENTS, WE WILL GIVE A 15% DISCOUNT OFF YOUR LAST YEAR'S TOTAL AUDIT FEES. IF OUR STANDARD PRICING IS LESS THAN YOU PAID LAST YEAR, WE WILL GIVE YOU 10% OFF OUR STANDARD PRICING. 

WE WOULD LIKE TO DO OUR PART IN HELPING YOU SUCCEED IN THE YEARS TO COME.

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Login   Search   Site Map   Privacy Policy   Disclaimer