When must a Mortgagee notify FHA of business changes in partnership or Principal Owners?

The Mortgagee must submit a Notice of Material Event to FHA if it experiences a change in partnership or Principal Owners using the Lender Electronic Assessment Portal (LEAP) within 10 business days of the change. This includes the addition or removal of partners or Principal Owners. 
A Notice of Material Event is the method of submitting a required notice to FHA of a change to the information provided by the Mortgagee at application as evidence of approval eligibility, or a change that affects the Mortgageeā€™s standing as an FHA-approved Mortgagee.
 The Mortgagee must:
  • include a cover letter signed by a Corporate Officer summarizing the business change(s); and
  • submit any required documents as specified in Handbook 4000.1 I.A.3.c. or as described in the LEAP User Manual. 
The LEAP User Manual is located at: https://www.hud.gov/lenders under the LEAP Information link in the Approvals & Renewals section. 
Handbook 4000.1 I.A.3.c & I.A.7 is 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-01829