Can two FHA-approved Mortgagees originate a Single Family loan (including 203ks and Home Equity Conversion Mortgages/HECM) together?

Two FHA-approved Mortgagees can originate an FHA Mortgage together using the Principal-Authorized Agent relationship or through a Sponsored Third Party Originator (TPO) relationship with a Direct Endorsement (DE) Mortgagee.

PRINCIPAL/AUTHORIZED AGENT
A Principal/Authorized Agent Relationship is one in which a Mortgagee with Unconditional Direct Endorsement (DE) authority permits another Unconditional DE Mortgagee to underwrite Mortgages on its behalf.

The principal must originate the Mortgage and the authorized agent must underwrite the Mortgage.  The Mortgage may close in either Mortgagee’s name, and either may submit the mortgage for endorsement.

The relationship must be documented in the Lender Electronic Assessment Portal (LEAP) by the authorized agent, and the principal’s FHA Lender ID must be entered in the “Originator” field on the FHA case file and in FHA Connection (FHAC).

The authorized agent must have Unconditional DE authority to underwrite the type of Mortgage being underwritten.

SPONSOR/SPONSORED THIRD-PARTY ORIGINATOR
A Sponsor/Sponsored Third-Party Originator (TPO) Relationship is one in which a Mortgagee with DE authority (acting as the “sponsor”) permits another entity to act as an originator and originate Mortgages on behalf of the Mortgagee.

A sponsored TPO is authorized to originate Mortgages for sale or transfer to a Mortgagee with DE authority.  A Mortgagee must ensure its sponsored TPO does not close Mortgages in their own name.
A Mortgagee may permit its sponsored TPO to close Mortgages in their own name if the TPO is also a Mortgagee.

A Mortgagee with Unconditional DE authority must confirm registration of its sponsored TPO on the Sponsored Originator Maintenance screen in FHAC.  A Mortgagee must register its sponsored TPO on the Sponsored Originator Maintenance screen in FHAC if the sponsored TPO is not on the registry.  The sponsored TPO’s legal name and Employer Identification Number (EIN) must be included.

The LEAP User Manual is located at: https://www.hud.gov/lenders under the LEAP Information link in the Approvals & Renewals section.

The FHAC Guide is available at https://entp.hud.gov/idapp/html/mrtg-pkg.cfm

For additional information see Handbook 4000.1 I.A.5.a.iv.-v. 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-01837