Has FHA's requirements been changed so a loan can close in the name of a non-FHA approved entity?

A Mortgagee must ensure its sponsored Third Party Originator (TPO) does not purchase or hold FHA-insured loans and may not close loans in their own name. 

A Mortgagee may permit its sponsored TPO to purchase or hold FHA-insured loans and may close loans in their own name, if the TPO is also an FHA-approved Mortgagee. 

For additional information see Handbook 4000.1 I.A.5.a.v.(B) 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-02298