The Mortgagee (Lender) must check the HUD Limited Denial of Participation (LDP) list and the System for Award Management (SAM) and follow appropriate procedures defined by that system to confirm eligibility for all participants involved in the transaction.
Borrower
A borrower is not eligible to participate in FHA-insured mortgage transactions if they are suspended, debarred, or otherwise excluded from participating in HUD programs. The Mortgagee must:
- check the HUD LDP list to confirm the borrower’s eligibility to participate in an FHA-insured mortgage transaction.
- check SAM (www.sam.gov) and follow appropriate procedures defined by that system to confirm eligibility for participation.
- check the “Yes” box on form HUD-92900-LT if the borrower appears on either the LDP or SAM list.
Other Parties to the Transaction
A mortgage is not eligible for FHA insurance if anyone participating in the mortgage transaction is listed on HUD’s LDP list or in SAM as being excluded from participation in HUD transactions. This may include, but is not limited to:
- seller (except where selling the principal residence)
- listing and selling real estate agent
- loan originator
- loan processor
- underwriter
- appraiser
- 203(k) Consultant
- Closing Agent
- Title company
For additional information see Handbook 4000.1 II.A.1.b.ii(B) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh