Does a Nonprofit Instrumentality of Government require FHA approval to participate in FHA’s Single Family nonprofit programs?

Nonprofit Instrumentalities of Government (NPIOG) require FHA approval and placement on the HUD Nonprofit Roster to participate in FHA’s Single Family nonprofit programs.
 
A NPIOG refers to a 501(c)(3) organization that was established by a governmental body or with governmental approval or under special law to serve a particular public purpose or designated as an instrumentality by law (statute or court opinion). FHA requires the unit of government that established the nonprofit to exercise Organizational Control, Operational Control or Financial Control of the nonprofit in its entirety or, at minimum, the specific homebuyer assistance program that is using FHA’s credit enhancement.
 
Organizational Control refers to the majority of the governing board and/or Principal Officers that are named or approved by governmental body/officials.
 
Operational Control refers to the requirement that the government body approves all major decisions and/or expenditures.
 
Financial Control refers to the requirement that the government body provides funds through direct appropriations, grants, or Loans, with related controls applicable to all activities of the Entity.
 
FHA may approve an NPIOG to provide secondary financing for as much as 100 percent of the Borrower's Minimum Required Investment (MRI). If approved, FHA will issue the NPIOG an approval letter, and this approval will be reflected on the FHA Nonprofit Organization Roster and in FHA Connection (FHAC). Interested Parties should check the Roster to ensure the approval status of an NPIOG.
 
HUD-approved NPIOGs will be included on HUD’s Nonprofit Roster at https://entp.hud.gov/idapp/html/f17npdata.cfm
 
NOTE: FHA approval and placement on the HUD Nonprofit Roster is not required for an Instrumentality of Government, provided it is not organized as a 501(c)(3) nonprofit.
 
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

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-04596