HUD has determined that Section 115 Entities, as identified in Section 115 of the Internal Revenue Code, and those entities with dual Section 501(c)(3) and Section 115 status should be treated as instrumentalities of government for purposes of FHA's Secondary Financing program and as such, must follow all FHA guidance for instrumentalities of government regarding secondary financing operations.
Section 115 entities are not required to have FHA approval or placement on FHA's Nonprofit Organization Roster to operate a secondary financing program and are held to the same program eligibility standards applicable to all other government agencies and instrumentalities of government operating secondary financing programs as described in 24 CFR 203.32(b).
Section 115 entities are not considered instrumentalities of government for participation in other FHA programs, and must meet eligibility and participation requirements for those FHA programs. If participation in other FHA programs requires approval and placement on HUD’s Nonprofit Organization Roster, Section 115 entities must remain on HUD’s Nonprofit Organization Roster. In such cases, Section 115 entities will still be considered to be instrumentalities of government for purposes of secondary financing, even though they are also on HUD’s Nonprofit Organization Roster.
For additional information see Handbook 4000.1 I.B.4. at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh
The FHA-approved Nonprofits web page is available at https://www.hud.gov/program_offices/housing/sfh/np