What type of approval does a lender need to originate and/or underwrite and/or service Title II Single Family Loans, including HECMs (Reverse Mortgages) or 203k (Rehabilitation mortgages)?
Any company that wants to originate, underwrite, fund, service or own FHA loans must have its own approval. It cannot use another company’s approval including any related companies. Originations: Any lender approved by FHA to originate FHA Insured Title II Single Family loans can originate any type of FHA Title II Single Family Loan, including HECMs and 203Ks. They can be approved as a loan correspondent or as a mortgagee. Underwriting: A mortgagee must obtain specific DE approval from their appropriate Single Family Homeownership Center to underwrite FHA Single Family loans and an additional approval to underwrite HECM and/or 203k loans. Loan Correspondents cannot underwrite. Servicing: Any FHA approved mortgagee can service FHA Insured Single Family loans (including HECM and/or 203k loans) see paragraph 2-20 of paragraph 1-2 B. of HUD Handbook 4060.1, Rev-2 Only FHA approved mortgagees can be a servicer. Loan Correspondents cannot service FHA insured loans. The Title II Mortgagee App