source:
  type: guide
  id: hud-4000-1-i-h-operating-loss
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part I — h. Operating
    Loss (09/20/2021)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part I — h. Operating
    Loss (09/20/2021).
  coverage_tier: operative
obligations:
- id: hud-4000-1-i-h-operating-loss-full
  canonical_id: hud-4000-1-i-h-operating-loss-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part I — h. Operating
    Loss (09/20/2021)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part I — h. Operating
      Loss (09/20/2021)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: h. Operating Loss (09/20/2021) A Notice of Material Event must
      be submitted to FHA within 30 business days of the end of each fiscal quarter
      in which a Mortgagee experiences an operating loss of 20 percent or greater
      of its net worth. Following the initial notification, the Mortgagee must submit
      financial statements every quarter until it shows an operating profit for two
      consecutive quarters, or until it submits its financial reports as part of its
      recertification, whichever period is longer.
  judgment: false
