Application and Eligibility Requirements for Approval

HUD Handbook 4000.1 >> Application and Eligibility Requirements for Approval

This section of the Single Family Housing Policy Handbook covers application and eligibility requirements for approval.

a. Title I and Title II Program Applications

An applicant for FHA approval may apply for Title I and Title II approval separately or in the same application.3

b. Online Application

An applicant seeking FHA approval must submit an online application containing all information and documentation required to demonstrate eligibility for approval as provided in this section. The online application also includes certification statements and an application fee. Applicants must ensure that all information contained in and documentation submitted with the application is true, complete, and up to date as of the date of submission of the application.

i. Application Information
(A) Standard The applicant must provide the following information as part of a completed application for FHA approval:

  • general information (such as the applicant name, date the applicant was established, Taxpayer Identification Number (TIN), Nationwide Mortgage Licensing System and Registry Unique Identifier (NMLS ID), etc.);
  • contact information (the primary contact information for all inquiries related to the application);
    addresses (the geographic and mailing addresses for the applicant’s home office);
  • Mortgagee type (the type of FHA Mortgagee approval being sought: Supervised, Nonsupervised, Government, or Investing);
  • Mortgagee function (the functions being sought: originate/underwrite, service, and/or hold);
    FHA program participation (the FHA program participation being sought: Title I, Title II Single Family, and/or Title II Multifamily);
  • Corporate Officers (the names, titles, and Social Security Numbers (SSN) for all Corporate Officers who will be directly involved in managing, overseeing, or conducting FHA business and the designated Officer in Charge); and
  • Principal Owners (the names, SSN or TIN, and percent ownership).

(B) Required Documentation The applicant must submit all of the application information in the online application.

ii. Application Documentation
(A) Standard The applicant must provide supporting documentation to demonstrate that it is eligible for FHA approval.
(B) Required Documentation The applicant must submit all eligibility documentation listed in the table below that is required for the type of approval being sought. This documentation must be submitted in the online application.

documentation table

Federally regulated refers to an entity that is a member of the FRS or whose accounts are insured by the FDIC or the NCUA.

iii. Certification of Compliance
(A) Standard As part of its application, the applicant, through a Corporate Officer, must complete a series of certification statements that address the applicant’s compliance with FHA requirements.
(B) Required Documentation The certification statements must be completed in the online application by a Corporate Officer of the applicant who has been granted the certifying official authorization in FHA Connection (FHAC).
(C) Unable to Certify If an applicant is unable to certify to all of the certification statements, the applicant must submit a detailed explanation in the online application for each certification that it is unable to complete. The document must:

  • explain in detail the reason(s) why the applicant is unable to certify;
  • be on the applicant’s letterhead;
  • be dated;
  • be signed by the Corporate Officer who signs the application; and
  • contain language certifying that, if approved, the applicant will comply with all FHA requirements.

(D) FHA Review FHA will review the applicant’s explanation for being unable to certify and communicate to the applicant any additional information or documentation needed to render a final decision regarding the applicant’s ability to complete the application process.

iv. Application Fee
(A) Standard The applicant must pay a nonrefundable application fee when submitting an application for approval. Applicants applying for both Title I and Title II approval, whether simultaneously or separately, will only be assessed a single application fee.
(B) Exception Applicants applying for approval as Government Mortgagees or applicants organized as nonprofits are not required to pay an application fee.
(C) Required Documentation The application fee must be submitted as part of the online application.

c. Eligibility Requirements

i. Business Form
(A) Standard A Nonsupervised or Investing Mortgagee must be organized in one of the following acceptable business forms. A sole proprietorship is not an acceptable business form.
(1) Corporation
(a) Definition A Corporation is an Entity chartered in the United States or its territories.
(b) Standard The corporation must be organized in accordance with federal and state laws regarding corporations and must provide for permanent succession.
(c) Required Documentation The corporation must submit copies of its articles of incorporation and bylaws with its application.
(2) Limited Liability Company
(a) Definition A Limited Liability Company (LLC) is an incorporated legal Entity created under applicable state law that combines certain legal and tax attributes of corporations and partnerships.
(b) Standard The LLC must:

  • consist of two or more members, unless its single member is a corporation or LLC consisting of two or more persons or members;
  • have a minimum term of existence of 10 years from the date of application; and
  • provide for succession and continuance in the event of the withdrawal or death of a member.

(c) Required Documentation The LLC must submit its Articles of Organization and operating agreement with its application. The Articles of Organization and operating agreement must contain language addressing the requirements listed in the FHA LLC Standard section above. The application must include the names and TINs of all members.
(3) Series Limited Liability Company
(a) Definition A Series LLC is a specific type of LLC that is composed of separate membership interests, which are divided into individual series.
(b) Standard The Series LLC must comply with all requirements for approval of an LLC. The Series LLC must be organized in accordance with state law that does not conflict with FHA requirements. The Series LLC’s operating agreement must stipulate that:

no series may participate in FHA programs unless the approved Mortgagee owns 100 percent of the membership interests in that series; and
the approved Mortgagee remains fully liable for the debts, liabilities, obligations and expenses of any and all series that participate in FHA programs.

(c) Required Documentation The Series LLC must submit its Articles of Organization and operating agreement with its application. The application must include the names and TINs of all series participating in FHA programs and of all members in the series participating in FHA programs.
(4) Partnership
(a) A Partnership is a for-profit business operation between two or more Entities that share ownership and management responsibilities.
(b) Standard The partnership must:

  • be organized in accordance with relevant state law;
  • have a term of existence that continues for a minimum term of 10 years from the date of application; and
  • be structured to continue to exist even if a partner withdraws.

Each general partner must be a corporation or other chartered institution consisting of two or more individuals.

The partnership must designate a managing general partner, who:

has as its principal activity the management of one or more partnerships, all of which are Mortgagees, lenders, or property improvement or Manufactured Housing loan lenders; and
has exclusive authority to deal directly with the Secretary or its designee on behalf of each partnership.

(c) Required Documentation The partnership must submit its partnership agreement. The partnership agreement must contain language addressing the requirements listed in the FHA Partnership Standard section above. The partnership must submit the names and TINs of all general partners as well as the names and SSNs of all officers and directors of the managing general partner.
(5) Nonprofit
(a) Definition A nonprofit is a charitable organization or corporation, civic league, social welfare organization, or local employee association organized for purposes other than profit.
(b) Standard The nonprofit must be recognized as exempt from taxation by the Internal Revenue Service (IRS) under Internal Revenue Code (IRC) Section 501(a) as an entity described in Sections 501(c)(3) and (4). A nonprofit organized as a corporation, LLC, or partnership must also comply with all requirements for the applicable business form.
(c) Required Documentation The nonprofit must provide a copy of its IRS exemption letter. The nonprofit must submit all Business Formation Documents required of its business form.
(B) Required Documentation The Mortgagee must submit its Business Formation Documents in the online application.

ii. Mortgagee Name
(A) Definitions
(1) Institution Name The Mortgagee’s Institution Name is the legally registered corporate name associated with the Mortgagee’s home office.
(2) “Doing Business As” Name The “Doing Business As” (DBA) name is any registered name or alias that the Mortgagee has a legal right to use.
(B) Standard The Mortgagee must use as its institution or DBA name the name shown on its Business Formation Documents or for which it has received approval from its state of formation. The Mortgagee is prohibited from using any restricted word in, or as part of, its institution or DBA name in a manner that would violate the Helping Families Save Their Homes Act of 2009 (Pub.L. 111–22) or 18 U.S.C. § 709, which places restrictions on “federal,” “government,” or “national” and related words, unless the Mortgagee is exempt from these statutory prohibitions. The Mortgagee’s institution name and all DBA names used by a Mortgagee for conducting FHA business must be registered with FHA. The Mortgagee must use only those names that are registered with FHA in advertising and promotional materials related to FHA programs.
(C) Required Documentation A Nonsupervised or Investing Mortgagee must submit its Business Formation Documents. A Supervised Mortgagee must submit a copy of the state license for its home office as verification of its institution name. The Mortgagee must submit documentation from the state showing it is legally approved to use its institution name or DBA name, if the name differs from that shown on its Business Formation Documents.

iii. Office Facilities
(A) Definitions
(1) Home Office The Mortgagee’s Home Office is the main office from which it manages its FHA business.
(2) Branch Offices Branch Offices are all other offices from which a Mortgagee conducts FHA business.
(B) Standard
(1) Home Office A Mortgagee must designate a headquarters or “home office” for its FHA business. A Mortgagee’s home office does not have to be its corporate office. The Mortgagee’s home office must have a staff of at least two full-time employees. The Mortgagee may not rely on a shared receptionist to satisfy this full-time employee requirement. A Mortgagee’s home office facility must:

  • be located in a commercial space that is separate from any other Entity (except for reception-type entrances or lobbies);
  • be clearly identified, including having a permanently affixed business sign and other means of identification commonly used by businesses, so that the general public and other businesses will know, at all times, exactly which Entity is being represented and is conducting business; and
  • display a fair housing poster if the Mortgagee deals with Borrowers and the general public.

(2) Branch Offices Mortgagees must also register any branch offices that will conduct FHA business in accordance with the requirements set forth in the Branch Office requirements section of this SF Handbook. This includes any branches that will originate, underwrite, and/or service FHA-insured Mortgages. The Mortgagee must ensure each registered branch office has at least one full-time employee. The Mortgagee may not rely on a shared receptionist or contractors to satisfy this full-time employee requirement. The Mortgagee must display a fair housing poster in branch offices that deal with Borrowers and the general public.
(C) Required Documentation FHA will verify compliance with the office facilities requirements through any onsite visits.

iv. Ownership and Personnel

The Mortgagee must comply with the following requirements for its ownership and personnel.
(A) Principal Owners
(1) Definition A Principal Owner is any individual or Entity meeting the following thresholds or roles for the applicable business form:

Business Form Principal Owners
Publicly Traded Corporation 10% or more ownership
Private or Close Corporation 25% or more ownership
Limited Liability Company All Members
Partnerships All Partners

(2) Standard The Mortgagee must ensure that none of its Principal Owners are suspended, debarred or otherwise excluded from participation in FHA programs (see Restricted Participation).
(3) Required Documentation A Supervised, Nonsupervised, or Investing Mortgagee must identify all Principal Owners. The Mortgagee must submit this information in the online application.
(B) Personnel Requirements
(1) Corporate Officers
(a) Definitions
(i) Corporate Officers of Nonsupervised and Investing Mortgagees A Corporate Officer is a natural person who serves as one of the following positions for a Nonsupervised or Investing Mortgagee:

owner;
President;
Vice President;
Chief Operating Officer (COO);
Chief Financial Officer (CFO);
Director;
Corporate Secretary;
Chief Executive Officer (CEO);
General Counsel;
Chairman of the Board;
General Partner; or
member or manager of an LLC.

(ii) Corporate Officers of Supervised and Government Mortgagees A Corporate Officer is a natural person who serves as one of the following positions for a Supervised or Government Mortgagee:

President;
Vice President in charge of managing or overseeing any aspect of the Mortgagee’s FHA business;
Chief Operating Officer (COO);
Chief Financial Officer (CFO);
Director;
Corporate Secretary;
Chief Executive Officer (CEO);
General Counsel;
Chairman of the Board;
General Partner; or
specifically designated staff member(s) of a Government Mortgagee.

(b) Standard The Mortgagee must ensure that no Corporate Officers are suspended, debarred or otherwise excluded from participation in FHA programs (see Restricted Participation). The Mortgagee must ensure its Corporate Officers only represent a single Mortgagee, unless the following criteria are met:

the Entities represented have some or all of the same Corporate Officers or Principal Owners;
there is a clear and effective separation of the Entities, and Borrowers know at all times exactly which Entity is being represented and with whom they are conducting business; and
there is a duly appointed or elected senior officer designated as the Officer in Charge, as described below, who only conducts business of the Mortgagee during normal business hours.

(c) Required Documentation The Mortgagee must identify all Corporate Officers listed above who will be directly involved in managing, overseeing, or conducting FHA business. The Mortgagee must submit all of this information in the online application. A Nonsupervised, Government, or Investing Mortgagee must submit a current resume covering the most recent seven-year period for each of these Corporate Officers.
(2) Officer in Charge
(a) Definition The Officer in Charge is the Corporate Officer designated to manage and direct the Mortgagee’s FHA operations.
(b) Standard The Mortgagee must designate as the Officer in Charge a full-time Corporate Officer who has at least three years of experience in the specific Mortgagee functions or activities that the Mortgagee is approved to perform, including:

originating or servicing Single Family or multifamily Mortgages;
investing funds in real estate Mortgages; or
managing other individuals performing these services.

The Mortgagee cannot rely on a Corporate Officer’s experience in real estate sales or brokerage as qualifying experience in Mortgagee functions or activities.
(c) Required Documentation The Mortgagee must designate the Officer in Charge and submit a current resume covering the most recent seven-year period detailing the individual’s relevant experience in the online application.
(3) Employees
(a) Definition Employees are individuals under the direct supervision and control of the Mortgagee.
(b) Standard
(i) Eligibility of Employees The Mortgagee must not employ any individual who will participate in FHA transactions if the individual is suspended, debarred, under an Limited Denial of Participation (LDP), or otherwise excluded from participation in FHA programs (see Restricted Participation).
(ii) Compensation The Mortgagee must compensate employees on one of the following bases:

a salary;
a salary plus commission; or
a commission only.

The Mortgagee may pay bonuses with any of these three compensation plans.

The Mortgagee must not compensate employees who perform underwriting, Quality Control (QC), or mortgage servicing activities on a commission basis.

The Mortgagee must report all employee compensation on IRS Form W-2.
(iii) SAFE Act Compliance The Mortgagee must ensure that it and its employees comply with the requirements of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) (12 U.S.C. § 1501 et seq.), including the licensing and registration of its employees in the NMLS.
(iv) Dual Employment The Mortgagee must require its employees to be its employees exclusively, unless the Mortgagee has determined that the employee’s other outside employment, including any self-employment, does not create a prohibited conflict of interest.
(v) Conflicts of Interest Employees are prohibited from having multiple roles in a single FHA-insured transaction. Employees are prohibited from having multiple sources of compensation, either directly or indirectly, from a single FHA-insured transaction.
(vi) Underwriters The Mortgagee must ensure that its underwriters are not managed by and do not report to any individual who performs mortgage origination activities. The Mortgagee must ensure that its underwriters:

meet basic eligibility requirements; and
perform the underwriting function in a manner consistent with FHA guidelines.

(c) Required Documentation The Mortgagee must certify that it meets these requirements in the online application.

v. Creditworthiness
(A) Definitions
(1) Institutional Creditworthiness A Creditworthy Institution is a Mortgagee with a credit background for the seven-year period preceding the FHA Mortgagee approval application that:

reflects no delinquent accounts or collections and no legal actions; or
reflects legal actions that have been adequately resolved, and/or delinquent accounts or collections that have been adequately resolved or that have an acceptable explanation.

(2) Individual Creditworthiness A Creditworthy Individual is a person whose credit background for the seven-year period preceding the FHA Mortgagee approval application:

reflects no delinquent accounts or collections, and reflects no legal actions that would impair the individual’s credit, such as a foreclosure action, judgment, lien, or bankruptcy; or
reflects legal actions that have been adequately resolved, and/or delinquent accounts or collections that have been adequately resolved or that have an acceptable explanation.

(B) Standard A Nonsupervised or Investing Mortgagee must demonstrate that it is a creditworthy institution, and that its Principal Owners and Corporate Officers are creditworthy individuals.
(C) Required Documentation A Nonsupervised or Investing Mortgagee must submit the following credit reports.
(1) Report on Mortgagee A Nonsupervised or Investing Mortgagee must submit a commercial credit report not more than 90 Days old with its application. The Mortgagee must provide written explanations for all negative items disclosed on the credit report.
(2) Reports on Principal Owners and Corporate Officers A Nonsupervised or Investing Mortgagee must submit a personal credit report for each of its Principal Owners and Corporate Officers with its application. The personal credit report must be a Residential Mortgage Credit Report (RMCR) or a Tri-Merged Credit Report (TRMCR) not more than 90 Days old. The Mortgagee must submit a written explanation from the relevant Principal Owner or Corporate Officer for any negative item disclosed on the credit report.

vi. State License or Registration

Supervised, Nonsupervised, and Investing Mortgagees must meet the following licensing requirements.
(A) Business License or Registration
(1) Standard The Mortgagee must have an active state license, registration, or equivalent approval to operate its business in the jurisdiction where the home office is located. The Mortgagee must ensure that each branch office has all licenses, registrations, or approvals required for the types of Mortgagee functions or activities performed by such branch office for the jurisdiction in which that office is located. A Mortgagee that has been refused a state license or been sanctioned by any state in which it will originate FHA Mortgages must disclose the circumstances of the refusal or sanction and the resolution to FHA.
(2) Required Documentation The Mortgagee must submit a copy of its state license, registration or equivalent approval for the state in which the home office is located. The Mortgagee, through a Corporate Officer, must certify at application that it has not been refused a license or been sanctioned by any state in which it will originate FHA Mortgages. If the Mortgagee has been subject to an action against its license, it is unable to certify. It must follow the unable to certify procedures and must submit documentation concerning the action that shows the nature of the action and evidence of an acceptable resolution (such as reinstatement or subsequent approval of a license, payment of sanctions or fines, or similar documentation).
(3) Exception for Mortgagees Exempt from State Licensing Requirements If the Mortgagee is exempt from state licensing requirements, the Mortgagee must submit documentation of the applicable exemption.
(B) Personnel Licenses
(1) Standard The Mortgagee must ensure that its Corporate Officers, employees, and Affiliates conducting FHA business for or on behalf of the Mortgagee have all state and federal licenses and registrations required for the Mortgagee functions or activities that such individuals or Affiliates will perform.
(2) Required Documentation The Mortgagee must certify that it meets this requirement as part of the online application.

vii. Financial Requirements
(A) Standard Supervised, Nonsupervised, and Investing Mortgagees must meet the following adjusted net worth and liquidity requirements at all times.
(1) Adjusted Net Worth The Mortgagee must compute its adjusted net worth in accordance with the HUD OIG Handbook 2000.04, Consolidated Audit Guide for Audits of HUD Programs.
(a) Single Family Programs The Mortgagee must have a minimum adjusted net worth of $1,000,000 plus 1 percent of the total volume in excess of $25,000,000 of FHA Single Family Mortgages originated, underwritten, serviced, and/or purchased during the prior fiscal year, up to a maximum required adjusted net worth of $2,500,000.
(b) Multifamily Programs
(i) With Servicing The Mortgagee must have a minimum adjusted net worth of $1,000,000 plus an additional net worth of 1 percent of the total volume in excess of $25,000,000 of FHA multifamily Mortgages originated, underwritten, purchased, and/or serviced during the prior fiscal year, up to a maximum required net worth of $2,500,000.
(ii) Without Servicing The Mortgagee must have a minimum adjusted net worth of $1,000,000 plus an additional net worth of one-half of 1 percent of the total volume in excess of $25,000,000 of FHA multifamily Mortgages originated, underwritten, and/or purchased during the prior fiscal year, up to a maximum required net worth of $2,500,000.
(c) Dual Participation A Mortgagee approved to participate in both Single Family and multifamily programs must have a minimum adjusted net worth of $1,000,000 plus an additional net worth of 1 percent of the total volume in excess of $25,000,000 of the aggregate of FHA Single Family and multifamily Mortgages originated, underwritten, purchased, and/or serviced during the prior fiscal year, up to a maximum required net worth of $2,500,000.
(2) Liquidity Liquid assets must be computed in accordance with the HUD OIG Handbook 2000.04, Consolidated Audit Guide for Audits of HUD Programs. The Mortgagee must hold no less than 20 percent of its required adjusted net worth in liquid assets.
(B) Exception for Government Mortgagees The adjusted net worth and liquidity requirements do not apply to Government Mortgagees. Government Mortgagees are not required to submit financial information to FHA.
(C) Required Documentation Supervised, Nonsupervised, and Investing Mortgagees must submit the documentation described below.
(1) Small Supervised Mortgagees A Small Supervised Mortgagee must submit a copy of its Unaudited Regulatory Report (i.e., report of condition and income, also known as the “call report,” which is submitted on the Federal Financial Institutions Examination Council Forms 031 and 041, or a consolidated or fourth quarter NCUA call report, submitted on NCUA Form 5300 or 5310) signed by a Corporate Officer that aligns with its fiscal year end.
(2) Supervised, Nonsupervised, and Investing Mortgagees
(a) Audit of Financial Statements The Mortgagee must submit financial statements reported in accordance with the HUD OIG Handbook 2000.04, Consolidated Audit Guide for Audits of HUD Programs.
(b) Accounting and Auditing Standards The Mortgagee must have prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and had its audit performed in accordance with Generally Accepted Auditing Standards (GAAS).
(c) Audit Period Covered A Mortgagee’s audited financial statements must cover 12 months of operation. For companies operating for fewer than 12 months, the audited financial statements must cover all months of operation. The end date of the audited financial reports must align with the applicant’s fiscal year end, with the following exceptions:

Audited financial reports over six months old – If the end date for the audited financial reports is more than six months old, the Mortgagee must also submit unaudited financial statements, signed by a Corporate Officer, for the most recent interim accounting period ending less than three months prior to submission of the application.
New institution – If the Mortgagee is a new institution and has had no revenues or cash flow, the income statement and cash flow statement are not required as part of the audited financial statements.

viii. Principal Activity of Nonsupervised Mortgagees
(A) Standard A Nonsupervised Mortgagee must derive at least 50 percent of its activities from real estate Mortgages, consumer installment notes or similar advances of credit, the purchase of consumer installment contracts, or from a directly related field. A directly related field is something directly related to the investing or lending of Mortgages, not simply actions relating to real estate in general.
(B) Required Documentation The Nonsupervised Mortgagee must submit audited financial statements that reflect the sources of its revenue.

ix. Funding Program
(A) Nonsupervised Mortgagees
(1) Standard A Nonsupervised Mortgagee that originates FHA Mortgages must maintain a warehouse line of credit or other mortgage-funding program acceptable to FHA. Title I Mortgagees must have a minimum $500,000 warehouse line of credit or funding program. Except for multifamily Mortgagees, Title II Mortgagees must have a minimum $1,000,000 warehouse line of credit or funding program, and must ensure the funding program or warehouse line of credit is sufficient to fund the Mortgagee’s average 60-Day origination operations. The Mortgagee’s average 60-Day origination operations refer to loans closed and funded, and/or purchased by the Mortgagee during the Mortgagee’s highest 60-Day period by mortgage amount over the past 12 months.
(2) Required Documentation The Mortgagee must submit documentation that it either 1) has a line of credit issued directly to the Mortgagee; or 2) has an agreement with a financial institution. The documentation must ensure the funding program or warehouse line of credit is sufficient to fund the Mortgagee’s average 60-Day origination operations.
(B) Investing Mortgagees
(1) Standard An Investing Mortgagee must have available, or have arranged for, funds or a line of credit sufficient to support a projected investment of at least $1,000,000 in property improvement, Manufactured Housing or real estate loans or Mortgages.
(2) Required Documentation The Mortgagee must submit documentation that it either 1) has a line of credit issued directly to the Mortgagee; or 2) has an agreement to support the projected investment.

x. Fidelity Bond
(A) Standard A Mortgagee must have fidelity bond coverage that meets the minimum coverage amount set by FHA. The Mortgagee must ensure that its fidelity bond coverage is in a form generally acceptable to one of the secondary mortgage market agencies, such as Freddie Mac, Fannie Mae, or the Government National Mortgage Association (GNMA, or Ginnie Mae). A Government Mortgagee will meet this requirement if it maintains alternative insurance coverage that is approved by FHA and that ensures the faithful performance of the Mortgagee’s responsibilities.
(B) Required Documentation The Mortgagee must submit documentation evidencing that it has acceptable fidelity bond coverage.

xi. Errors and Omissions Insurance
(A) Standard A Mortgagee must have errors and omissions insurance that meets the minimum coverage amount set by FHA. The Mortgagee must have errors and omissions insurance that is generally acceptable to one of the secondary market agencies, such as Freddie Mac, Fannie Mae, or Ginnie Mae. A Government Mortgagee will meet this requirement if it maintains alternative insurance coverage that is approved by FHA and that ensures the faithful performance of the Mortgagee’s responsibilities.
(B) Required Documentation The Mortgagee must submit documentation evidencing that it has acceptable errors and omissions insurance.

xii. Quality Control Plan
(A) Standard A Mortgagee that originates, underwrites, closes, endorses, or services FHA-insured Mortgages must have a QC Plan that meets FHA’s requirements, as described in the Quality Control, Oversight and Compliance section of this SF Handbook. The Mortgagee must maintain and update its QC Plan as needed to ensure it is fully compliant with all applicable FHA requirements at all times.
(B) Required Documentation The Mortgagee must submit a copy of its QC Plan.

d. Processing of Applications

FHA will review all completed applications for approval to determine if the applicant complies with all eligibility requirements. If FHA requires additional documentation or clarifying information, FHA may request such additional information and provide the applicant with a deadline for response. If the applicant does not submit a completed application or provide the additional information requested by the specified deadline, FHA may deny approval on this basis.

e. Application Approval

If FHA approves the application, FHA will provide notice via email and U.S. mail. This notice will include the Mortgagee’s assigned FHA Lender Identification Number (FHA Lender ID), which must be used by the Mortgagee in all FHA computer systems and official correspondence with FHA.

f. Application Denial

i. Appeal of Denial

The applicant may submit an appeal of the denial decision through the online application within 30 Days of the date of the denial.

If the denial is sustained, the applicant may submit a second appeal through the online application within 30 Days of the date the denial is sustained. If the denial of approval is sustained a second time, the applicant will be ineligible to apply for FHA approval for a period of 12 months.

ii. Reapplication

An applicant whose approval was denied may reapply after a period of 12 months. The applicant will be required to pay an application fee at the time it submits its second application for approval.