What are the FHA Mortgagee Approval Types?

FHA approves Mortgagees (Lenders) as one of the following four types:  Supervised, Nonsupervised, Government, or Investing. 

Supervised Mortgagee
A Supervised Mortgagee is a financial institution that is a member of the Federal Reserve System (FRS) or whose accounts are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).  A Supervised Mortgagee may originate, underwrite, close, endorse, service, purchase, hold, or sell FHA-insured mortgages. 

Nonsupervised Mortgagee
A Nonsupervised Mortgagee is a lending institution that has as its principal activity the lending or investing of funds in 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 lending or investing of funds in real estate Mortgages, not simply actions relating to real estate in general.  A Nonsupervised Mortgagee may originate, underwrite, close, endorse, service, purchase, hold, or sell FHA-insured mortgages. 

Government Mortgagee
A Government Mortgagee is a federal, state, or municipal governmental agency, a Federal Reserve Bank, a Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation (FHLMC/Freddie Mac), or the Federal National Mortgage Association (FNMA/Fannie Mae). A Government Mortgagee may originate, underwrite, close, endorse, service, purchase, hold, or sell FHA-insured mortgages. 

Investing Mortgagee
An Investing Mortgagee is an organization that invests funds under its own control.  An Investing Mortgagee may purchase, hold, or sell FHA-insured Mortgages.  An Investing Mortgagee may only service FHA-insured Mortgages if it receives prior approval.
An Investing Mortgagee may not originate, underwrite, or close FHA-insured mortgages in its own name or submit applications for FHA mortgage insurance. 

For additional information see Handbook 4000.1 Section I.A.2. available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-01685