Are referral fees allowed in the origination of FHA insured single family loans?

The Mortgagee, or any of the Mortgageeā€™s employees, must not pay or receive, or permit any other party involved in an FHA-insured mortgage transaction to pay or receive, any fee, kickback, compensation or thing of value to any person or entity in connection with an FHA-insured mortgage transaction, except for services actually performed and permitted by HUD. The Mortgagee must not pay a referral fee to any person or entity.  The Mortgagee is required to comply with all federal, state and local laws, rules, and requirements applicable to the mortgage transaction, including the requirements of the Consumer Financial Protection Bureau (CFPB), including those related to the Real Estate Settlement Procedure Act (RESPA). 

For additional information see Handbook 4000.1 I.A.6.h. & II.A.1.a.ii.(B) 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-05009