FHA Waives Small Lender Audit Requirements

In recent email communication to all supervised lenders, the Department of Housing and Urban Development announced it will be waiving for one year the requirement for small lenders that they submit annual audited financial statements to HUD when seeking Federal Housing Administration approval or renewal. Small lenders are defined as those with less than $500 million in assets.

The waiver is related to requirements set forth last year in Mortgagee Letter 2010-20 as part of the FHA single-family mortgage insurance program risk management reforms. The waiver will expire on April 7, 2012, according to the email correspondence sent out in mid-April.

The reporting threshold, according to HUD, is derived from Federal Deposit Insurance Corporation, Office of Thrift Supervision and National Credit Union Administration regulatory requirements.

HUD’s email correspondence specifies that the waiver applies to the submission of audited financial statements only, and does not apply to the requirement that supervised lenders submit an independent auditor’s opinion of internal control and compliance with HUD programs. The waiver was sought by the National Council of State Housing Agencies in comments to HUD in late December 2010.

FHA has indicated that a forthcoming mortgagee letter will provide additional information.

View the communication from HUD.

Written by Elizabeth Ecker

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