II. This Final Rule – Policies Adopted
In consideration of issues raised by the commenters and HUD’s own further consideration of issues related to this final rule, HUD is making the following changes at the final rule stage:
Net Worth Requirements for Applicants for Approval to Participate in FHA Single Family or Multifamily Programs and for FHA-Approved Mortgagees: 2010 to 2011
The following net worth requirements are effective on
[insert effective date of final
rule
], for new applicants for FHA approval to participate in FHA single-family or multifamily
programs, and effective on [
insert date one year from effective date of final rule], for all
approved supervised and nonsupervised lenders and mortgagees, and all approved investing
lenders and mortgagees with FHA approval as of
[insert effective date of final rule]:
•
Applicants for FHA Approval and Existing Non-Small Business Approved Lenders and
Mortgagees. An applicant for FHA approval or an approved lender or mortgagee that exceeds
the size standards for its industry classification as established by the Small Business
Administration (SBA) at 13 CFR 121.201, Sector 52 (Finance and Insurance), Subsector 522
(Credit Intermediation and Related Activities) shall have a net worth of not less than
$1,000,000, of which no less than 20 percent must be liquid assets consisting of cash or its
equivalent acceptable to the Secretary.
•
Existing Small Business Approved Lenders and Mortgagees. An approved lender or mortgagee
8
that meets the SBA size standards for its industry classification shall have a net worth of not
less than $500,000, of which no less than 20 percent must be liquid assets consisting of cash or
its equivalent acceptable to the Secretary. The net worth requirements for small business
lenders and mortgagees remain applicable as long as the mortgagee continues to meet the SBA
size standard for a small business. If, based on the audited financial statement prepared at the
end of its fiscal year and provided to HUD at the commencement of the new fiscal year, a small
business lender or mortgagee no longer meets the SBA size standard of a small business, the
mortgagee shall meet the net worth requirements for a non-small business mortgagee by the last
day of the fiscal year in which the audited financial statements were submitted.
Net Worth Requirements for Applicants for Approval to Participate in FHA Single Family or
Multifamily Programs and FHA-Approved Mortgagees: 2013 and After
The following net worth requirements are effective on [
insert date three years from effective
date of final rule
], for new applicants for FHA approval to participate in FHA single-family or
multifamily programs, for all approved supervised and nonsupervised lenders and mortgagees, and for
all FHA-approved investing lenders and mortgagees:
•
Single Family Mortgagees. Irrespective of size, all FHA-approved mortgagees and applicants
for approval to participate in FHA single family programs shall have a net worth of $1 million,
plus an additional net worth of one percent of the total volume in excess of $25 million of FHA
single family insured mortgages originated, underwritten, purchased, or serviced during the
prior fiscal year, up to a maximum required net worth of $2.5 million. No less than 20 percent
of the mortgagee’s required net worth must be liquid assets consisting of cash or its equivalent
acceptable to the Secretary.
•
Multifamily Mortgagees. Irrespective of size, all existing FHA-approved mortgagees and
9
applicants for approval to participate in FHA multifamily programs shall have a minimum net
worth of $1 million. For those multifamily mortgagees that also engage in multifamily
mortgage servicing, an additional net worth of one percent of the total volume in excess of $25
million of FHA multifamily mortgages originated, purchased, or serviced during the prior fiscal
year, up to a maximum required net worth of $2.5 million, is required. For multifamily
mortgagees that do not perform multifamily mortgage servicing, an additional net worth of one
half of one percent of the total volume in excess of $25 million of FHA multifamily mortgages
originated during the prior fiscal year, up to a maximum required net worth of $2.5 million, is
required. No less than 20 percent of the mortgagee’s required net worth must be liquid assets
consisting of cash or its equivalent acceptable to the Secretary.
•
Single Family and Multifamily Mortgagees. Irrespective of size, all existing FHA-approved
mortgagees and applicants for approval to participate in both FHA single family and
multifamily programs must meet the net worth requirements for a single family mortgagee.
Therefore, if a mortgagee is a participant in both the multifamily
and single family programs, it
is required to meet the greater net worth requirements for single family mortgagees.
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