Are there additional test case requirements that need to be met in order to be granted Unconditional DE authority for HECM loans?

The Mortgagee must obtain separate Direct Endorsement (DE) approval for forward mortgage and Home Equity Conversion Mortgage (HECM) programs. 

The Mortgagee must receive a minimum of five Firm Commitments within a period of 12 consecutive months following the date of the DE Program Test Case approval letter in order to be granted HECM Unconditional DE authority.  After the Mortgagee successfully completes the required HECM Test Cases, FHA will grant the Mortgagee approval for Unconditional DE authority. 

Handbook 4000.1 I.A.5.a.iii.(A)(4)(a) is 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-05057