Branch Offices

HUD Handbook 4000.1 >> Branch Offices

Section I-A-4 of the FHA Single Family Policy Handbook deals with Branch Offices. This section includes information pertaining to (A) registration, (B) Single Family Lending Area, (C) Managers, and (D) Net Branching Prohibition.

a. Registration

The Mortgagee must register all branch offices in which it conducts FHA business, including originating, underwriting, and/or servicing FHA-insured Mortgages. The Mortgagee must register each branch office and pay branch office registration fees through the Lender Electronic Assessment Portal (LEAP). A 10-digit FHA Lender ID will be assigned to each registered branch office.

The Mortgagee cannot register a new branch office within a HUD Field Office jurisdiction in which it has withdrawn a branch office in the last six months. The Mortgagee must instead make a request through LEAP to reassign the former office’s 10-digit FHA Lender ID to the new branch and must pay the branch office registration fee.

b. Single Family Lending Area

i. Definition

An “Area Approved for Business” (AAFB) is the geographic area in which a Mortgagee’s home or branch office is permitted to originate or underwrite FHA Mortgages. The AAFB is subdivided into HUD Field Office jurisdictions.

The Mortgagee’s AAFB can be viewed through LEAP. The jurisdiction of each HUD Field Office can be verified on under the Mortgage Origination tab through the link titled “HUD Office Jurisdictions.”

ii. Standard

All branch offices registered by a Mortgagee will initially be granted a nationwide AAFB. The branch may only exercise its authority to originate or underwrite FHA Mortgages in those states where the Mortgagee fully complies with state origination and/or underwriting licensing and approval requirements.

c. Managers

i. Definitions
(A) Branch Manager A Branch Manager is an onsite manager for a branch office who manages one branch office.
(B) Regional Manager A Regional Manager is a manager who oversees the operation of multiple branch offices.


The Mortgagee must have a branch and/or regional manager to oversee each of its branch offices.

iii. Compensation

The Mortgagee may provide a branch or regional manager with a commission derived from a branch’s “net” profit after the Mortgagee has paid all expenses of the branch office.

iv. Required Documentation

The Mortgagee must provide the full names and titles of its branch and regional managers, along with their contact information, in LEAP.

d. Net Branching Prohibition

i. Standard

The Mortgagee must not engage an existing, legally separate mortgage company or broker to function as the Mortgagee’s branch office or DBA name or to conduct FHA activities using the Mortgagee’s FHA approval.

ii. Exception for Existing Leases

In cases where a Mortgagee acquires an existing office with the intent of operating it as a branch office, and the lease of the acquired office is not transferable to the Mortgagee, FHA will allow the Mortgagee to operate the acquired office as a branch office until the lease expires upon its own terms, so long as the Mortgagee can demonstrate that it has assumed financial liability for the payment of the lease. In such cases, the Mortgagee must document and maintain evidence that it has assumed financial liability for the payment of the lease and produce this documentation to FHA upon request.