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Thanks to Years of Experience, Metz & Associates CPA Knows the FHA Lenders Acceptance Requirements and Can Help You Get FHA Approved

To get approved takes some initial effort and money, but it’s an investment that can be well worth it. There are few lenders and loan products available to meet the needs of moderate income and credit-challenged borrowers. Instead of searching for lenders, FHA may be a viable alternative source of financing. 

To apply to be FHA approved, you’ll need to gather certain documents (see list below), fill out an application (HUD 11701) and application fee form and submit to HUD. The FHA process is relatively simple, and more than worth the time.  We can audit your financial statements and review the application before you send it.  

The FHA approval process should take 4 to 8 weeks not including mailing time.

Here is a summary of the FHA Requirements taken from the  HUDClips -> Mortgagee Approval Handbook (4060.1).  Detailed FHA requirements and instructions can be found within this handbook.

  1. must be a corporation, partnership, or other chartered institution, and must be a permanent organization having succession.  A sole proprietorship or trust is not an acceptable business form for approval as a FHA mortgagee.
  2. must obtain all required business licenses prior to, or in conjunction with, approval as a FHA mortgageeExcept for a supervised mortgagee, copies of all required licenses must be submitted with the applicationA state-licensed mortgagee must also submit a letter certifying to the Department that it has not been refused a license or sanctioned.
  3. must submit documentation that they have State approval for both their legal name and any “doing business as” name they use.
  4. must have and maintain an adequate adjusted net worth as defined in chapter 7 of the HUD IG Handbook. All calculations must be prepared by a CPA pursuant to chapter 7 of the most recent version of HUD IG Handbook 2000.04
  5. must maintain liquid assets of 20 percent of its adjusted net worth or $100,000 whichever is lesser.
  6. must pay all its own operating expenses
  7. must employ trained personnel that are competent to perform their assigned responsibilities.
  8. must have sufficient staff or permitted contractor support for loan origination, processing, underwriting, servicing, and collection activities, to the extent that the mortgagee engages in these activities.
  9. may contract out certain administrative and clerical functions that do not materially affect underwriting decisions or increase the risk to FHA.
  10. home office and each branch office must be able to provide prompt responses to applicant or mortgagor inquiries
  11. “must comply with the Fair Housing Act, Executive Order 11063 on Equal Opportunity in Housing, the Equal Credit Opportunity Act (ECOA), the Real Estate Settlement Procedures Act (RESPA), the Home Mortgage Disclosure Act (HMDA), and all other Federal laws relating to the lending or investing of funds in real estate mortgages.
  12. must follow all applicable statutes, regulations and HUD written instructions, including program handbooks and mortgagee letters on loan originations
  13. may not use mortgagor escrow funds for any purpose other than for which they were received.
  14. may not pay any fee, kickback, compensation or thing of value (including a fee representing all or part of the mortgagee’s origination fee) to any person or entity in connection with a FHA insured mortgage transaction, except for services actually performed and permitted by the Department.
  15. must spend a majority of its time and assets in the production of real estate mortgages and in the lending or investment of funds in real estate mortgages, or a directly related field.
  16. required to have at least one qualified sponsor at all times.

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