What are the financial data submission requirements for a Mortgagee's annual recertification of FHA approval?

Small Supervised Mortgagees
  • A Small Supervised Mortgagee must submit a copy of its Unaudited Regulatory Report, signed by a Corporate Officer, which aligns with its fiscal year end.
Large Supervised, Nonsupervised, and Investing Mortgagees
  • Audit of Financial Statements: The Mortgagee must comply with the appropriate financial reporting procedures and requirements set forth in the HUD Office of Inspector General (OIG) Handbook 2000.04, Consolidated Audit Guide for Audits of HUD Programs.
  • Accounting and Auditing Standards: The Mortgagee must have prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and had its audit performed in accordance with the most currently effective Government Accountability Office's (GAO) Generally Accepted Government Auditing Standards (GAGAS), also referred to as the “Yellow Book,” and Generally Accepted Auditing Standards (GAAS).
  • Audit Related Questions: The Mortgagee must submit answers to FHA’s Audit Related Questions.  FHA’s Audit Related Questions address information about the Mortgagee’s financial data, the type of audit completed, and any Findings reported.
  • Independent Public Accountant Attestation: The Mortgagee must submit its recertification package to an Independent Public Accountant (IPA) for review.  The IPA must review the Mortgagee’s financial data and Audit Related Questions, and complete the Agreed Upon Procedures. The Agreed Upon Procedures address compliance with required audit procedures.

Government Mortgagees

  • Government Mortgagees are not required to submit financial information.

Annual Recertification Resources are available on the LEAP Information web page at https://www.hud.gov/program_offices/housing/sfh/lender/SFH_Lenders_LEAP

For additional information see Handbook 4000.1 I.A.8.d. 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-03197