If the mortgage involves a HUD employee, the lender must score the transaction through TOTAL Scorecard. If the file receives an Accept, the lender must underwrite the transaction in accordance with the guidance in Handbook 4000.1 II.A.4. and condition the loan on the approval of the mortgage by HUD. If the file receives a Refer, or for applications that were downgraded to a manual underwrite, the lender must underwrite the transaction in accordance with the guidance in Handbook 4000.1 II.A.5. The lender must submit the underwritten mortgage application to the Processing and Underwriting Division Director at the jurisdictional Homeownership Center (HOC) for final underwriting approval. For non-credit qualifying Streamline Refinances only, any HUD employee may have their mortgage underwritten and approved/denied by the lender.
For additional information see Handbook 4000.1 II.A.4.e.iii; II.a.5; II.A.8.d.vi(C)(4)(d) available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh