source:
  type: guide
  id: hud-4000-1-i-b-application-and-approval-process
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part I — b. Application
    and Approval Process (07/14/2025)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part I — b. Application
    and Approval Process (07/14/2025).
  coverage_tier: operative
obligations:
- id: hud-4000-1-i-b-application-and-approval-process-full
  canonical_id: hud-4000-1-i-b-application-and-approval-process-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part I — b. Application
    and Approval Process (07/14/2025)
  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 — b. Application
      and Approval Process (07/14/2025)
    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: 'b. Application and Approval Process (07/14/2025) i. Initial
      Contact Prospective applicants must submit an email to the FHA Resource Center
      at answers@HUD.gov identifying the nonprofit program(s) that the applicant would
      like to participate in. Prospective applicants must also identify the state
      where the program activities will take place. ii. Submitting the Preliminary
      Information The prospective applicant must submit the following information
      via email to the point of contact: • the nonprofit’s legal name and physical
      address of the main office; I. DOING BUSINESS WITH FHA B. Other Participants
      4. Nonprofits and Governmental Entities Handbook 4000.1 90 Last Revised: 11/26/2025
      • the name, phone number, and email address of the Executive Director; • the
      name, title, phone number, and email address for all staff members requesting
      system access for application and reporting; • the effective date of the nonprofit’s
      501(c)(3) tax-exempt status as reflected in the IRS Letter of Determination;
      • the nonprofit’s federal Employer Identification Number (EIN); • the FHA nonprofit
      program(s) for which the nonprofit is seeking approval; • indication of whether
      or not the nonprofit is an Instrumentality of Government; and • confirmation
      that the nonprofit has two years of relevant housing experience within the last
      five years. iii. Eligibility Requirements A Complete Nonprofit Application refers
      to an application that satisfies all General Application Requirements and all
      program-specific application requirements for the programs in which the nonprofit
      seeks approval. In those instances when a nonprofit is applying to more than
      one program and the program-specific application requirements request duplicate
      information, the nonprofit is only required to submit this information once.
      A Complete Nonprofit Application must be submitted and approved in order for
      a nonprofit to participate in any one of FHA’s nonprofit programs. (A) General
      Application Requirements Nonprofit applicants must satisfy all of FHA’s general
      application requirements whether they are applying to one or all of FHA’s nonprofit
      programs. All certifications within the application must include the following
      language: WARNING: HUD will prosecute false claims and statements. Conviction
      may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012;
      31 U.S.C. 3729, 3802). (1) IRS Tax-Exempt Status (a) Standard The nonprofit
      must have an effective date of exemption, as indicated by the IRS Letter of
      Determination, of at least two years prior to the FHA nonprofit application
      date. I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits and Governmental
      Entities Handbook 4000.1 91 Last Revised: 11/26/2025 (b) Required Documentation
      (i) IRS Letter of Determination The nonprofit must submit the IRS Letter of
      Determination verifying approval under Section 501(c)(3) as exempt from taxation
      under Section 501(a) of the Internal Revenue Code (IRC) of 1986, as amended.
      (ii) Employer Identification Number The nonprofit must provide its EIN and any
      subsidiary organization''s EIN. Nonprofits may not assume the name and EIN of
      another dormant or defunct nonprofit. (iii) Certification The nonprofit must
      submit a document signed by an authorized representative of the nonprofit certifying
      the following: • the nonprofit’s approval for tax exemption has not been modified
      or revoked by the IRS; • the program activities for which the nonprofit seeks
      FHA approval to participate in are consistent with the activities and purposes
      for which the IRS granted tax-exempt status; and • the nonprofit has notified
      the IRS of any substantial and material changes in its character, purpose, or
      methods of operation. (2) Board of Directors and Employees (a) Standard Voting
      members of the nonprofit’s Board of Directors must serve in a voluntary capacity
      and cannot receive compensation for any service they provide in implementing
      the nonprofit’s Affordable Housing Program (AHP) for which they are seeking
      HUD approval. Directors may receive reimbursement for expenses. The nonprofit
      must operate in a manner so that no part of its net earnings is passed on to
      any individual board member, corporation, or other entity affiliated with a
      board member. Board members cannot be employees of the nonprofit. The occupational
      activities and obligations of board members cannot conflict with the work of
      the nonprofit. It is a conflict of interest for a nonprofit to employ staff
      who also work for and receive financial benefits from an entity that is providing
      the nonprofit with services. I. DOING BUSINESS WITH FHA B. Other Participants
      4. Nonprofits and Governmental Entities Handbook 4000.1 92 Last Revised: 11/26/2025
      (b) Required Documentation (i) Voluntary Board Certification The nonprofit must
      submit a certification signed by an authorized representative of the nonprofit
      agency confirming that the Board of Directors serves in a voluntary capacity.
      (ii) Board of Directors Information FHA requires information on the job responsibilities
      of all board members to ensure that their occupational activities and obligations
      do not conflict with the work of the nonprofit and for compliance with Ineligible
      Participants requirements. The nonprofit must provide the following information
      for each board member: • name, board position, length of board term including
      expiration, and whether member is permitted to vote; • Social Security Numbers
      (SSN) for all voting board members; and • name of current employer, job title,
      nature of business, and job responsibilities. The FHA Nonprofit Leadership Worksheet
      may be used, but is not required to be used, to comply with this section. (3)
      Principal Management (a) Definition Principal Management and Staff Members refer
      to those who direct the activities of the organization and are responsible for
      organizational finances. This includes, but is not limited to, Executive Director/President
      or Vice President, Project/Program Director, or similar position. (b) Standard
      (i) Conflict of Interest Nonprofits must ensure that no conflicts of interest
      exist between their Boards of Directors, principal management, or any other
      entities that may participate in operating their AHP. It is a conflict of interest
      for a nonprofit to employ staff who also work for and receive financial benefits
      from an entity that is providing the nonprofit with services related to the
      nonprofit’s Affordable Housing Program (AHP). I. DOING BUSINESS WITH FHA B.
      Other Participants 4. Nonprofits and Governmental Entities Handbook 4000.1 93
      Last Revised: 11/26/2025 (ii) Staff Experience Principal management must have
      experience in developing and administering housing programs. Hiring of experienced
      staff does not relieve the nonprofit agency of the Relevant Experience requirements.
      (c) Required Documentation Nonprofits must provide the following information
      for principal management to ensure that no conflict-of-interest relationships
      exist, as well as no sanctions, foreclosures, inappropriate transfers of Real
      Property, or Business Relationships. FHA will also review the information collected
      for compliance with the Ineligible Participants requirements and to ensure that
      principal management have the requisite experience. For each principal management
      member, the nonprofit must provide: • name and SSN; • job title within the nonprofit,
      job responsibilities within the nonprofit, and length of time in position; and
      • relevant former employers, address of former employer, related job responsibilities,
      and years in position. The FHA Nonprofit Leadership Worksheet may be used, but
      is not required to be used, to comply with this section. (4) Relevant Experience
      (a) Definitions Relevant Experience for HUD Homes refers to the acquisition,
      rehabilitation, and resale or new construction of five Single Family Properties.
      Relevant Experience for FHA Mortgagor Programs refers to the housing development
      or property management of Single Family Properties. Relevant Experience for
      Secondary Financing refers to the experience of operating a mortgage lending
      program or a Secondary Financing program as evidenced by five transactions.
      (b) Standard The nonprofit must have a minimum of two years of relevant experience
      within the last five years. The hiring of experienced staff does not relieve
      the nonprofit agency of the relevant experience requirements. I. DOING BUSINESS
      WITH FHA B. Other Participants 4. Nonprofits and Governmental Entities Handbook
      4000.1 94 Last Revised: 11/26/2025 Exception A nonprofit that does not meet
      this experience requirement may be able to obtain limited approval if it has
      at least one year of relevant experience as defined above and one year of other
      related housing experience. The nonprofit’s “other related housing experience”
      must demonstrate that the organization has the financial and administrative
      capacity to finance, purchase, rehabilitate, or resell homes, or provide downpayment
      assistance to serve Low- to Moderate-Income individuals or families. (c) Required
      Documentation After the preliminary information has been accepted and the nonprofit
      is granted permission to complete the application, the nonprofit must submit
      a brief narrative describing its relevant housing experience. In addition, the
      nonprofit must provide: • for the FHA Mortgagor and HUD Homes programs, details
      of past transactions including property address, acquisition date, loan amount,
      rehabilitation, date sold, and any delinquency. Transactions must span the period
      of relevant experience; or • for the FHA Secondary Financing program, a list
      of past first lien mortgage loans and/or secondary financing loans including
      loan amounts, transaction dates, and addresses of the properties financed. Transactions
      must span the period of relevant experience. (5) Delegation of Signature Authority
      Required Documentation The nonprofit must provide organizational resolutions
      delegating signature authority to sign loan applications and/or sales contracts
      on behalf of the organization. These resolutions must be signed and dated by
      the appropriate persons under applicable state law, the Articles of Organization,
      and other governing documents. (6) Articles of Organization and Bylaws (a) Standard
      The nonprofit’s mission statement, purpose, or goals stated in the nonprofit’s
      Articles of Organization and bylaws must be consistent with those submitted
      in the application. I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits
      and Governmental Entities Handbook 4000.1 95 Last Revised: 11/26/2025 (b) Required
      Documentation (i) Conformed Copy The nonprofit must submit a Conformed Copy
      of its Articles of Organization, and bylaws if applicable. These documents must
      be signed and dated by the appropriate persons under applicable state law. A
      Conformed Copy is a copy that agrees with the original and all amendments to
      it. (ii) Written Declaration A Conformed Copy of the Articles of Organization
      and bylaws must be accompanied by a written declaration signed by an authorized
      representative of the organization certifying the copy is a complete and accurate
      copy of the document. As an alternative to the foregoing declaration, an organization
      may submit a Conformed Copy of its Articles of Organization approved and dated
      by the appropriate state authority. (7) Quality Control Plan (a) Standard The
      nonprofit must have a Quality Control (QC) Plan that explains the organization’s
      internal and external audit and monitoring procedures. (b) Required Documentation
      The nonprofit must provide a copy of the QC Plan that, at a minimum, includes
      the following elements: • their system for maintaining records of QC Findings
      and actions; • the process by which periodic reports that identify deficiencies
      are provided to senior management; • the process by which prompt corrective
      measures are taken and documented by senior management, including time frames
      and any training provided when deficiencies are identified; and • procedures
      to report any violation of law or regulation, any known false statement, fraud
      or program abuse to HUD, the HUD Office of Inspector General (OIG) and the appropriate
      federal, state or local law enforcement agency. Although not required, nonprofit
      agencies are encouraged to include the following elements in their QC Plan:
      I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits and Governmental
      Entities Handbook 4000.1 96 Last Revised: 11/26/2025 • an impartial third-party
      entity to conduct QC reviews on the nonprofit agencies’ activities; • procedures
      for expanding the scope of the QC review when fraud or patterns of deficiency
      may exist; • procedures to identify revisions in FHA guidelines and inform staff
      of those revisions; and • procedures to hold nonprofit staff accountable for
      performance failures or errors. (8) Administrative Capacity (a) Standard The
      nonprofit must demonstrate the capability to develop and carry out its homeownership
      program, as described in the nonprofit’s AHPP, in a reasonable time frame and
      a successful manner. Based on the level of administrative capacity, FHA may
      limit the number of Properties purchased at a discount and Mortgages insured
      by FHA. (b) Required Documentation The nonprofit must provide a narrative describing
      its past experience, if any, in acquisition, rehabilitation, property sales,
      downpayment assistance, Single Family mortgage lending, housing counseling,
      and administration of a homeownership program or other AHPs. (9) Financial Capacity
      (a) Standard The nonprofit must have the financial capacity to operate its homeownership
      program. FHA will assess the nonprofit’s financial stability in terms of cash
      balances, assets and liabilities, annual expenses, and cash flow from operations.
      Based on an analysis of submissions, FHA may limit the number of Properties
      a nonprofit may purchase at a discount and purchase with FHA-insured financing.
      (b) Required Documentation Documentation requirements differ based on the amount
      of a nonprofit’s expended federal award, as defined by the Office of Management
      and Budget. I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits and
      Governmental Entities Handbook 4000.1 97 Last Revised: 11/26/2025 (i) Expended
      Federal Awards of $1,000,000 or More The nonprofit must submit the two most
      recent year-end audited financial statements, profit and loss statements, and
      balance sheets. The audited financial statements must be provided by the applicant’s
      Independent Public Accountant (IPA) certifying that the nonprofit: • maintains
      internal controls over federal awards; • complies with applicable laws, regulations,
      and contract or grant provisions; and • prepares appropriate financial statements.
      The nonprofit must also submit the most recent quarterly financial statements
      along with certification from a Certified Public Accountant (CPA) or other financial
      professional attesting that the information accurately represents the financial
      condition of the nonprofit agency. (ii) Expended Federal Awards Less than $1,000,000
      Nonprofits must submit two years of audited or unaudited financial statements,
      prepared in accordance with Generally Accepted Accounting Principles (GAAP)
      and reporting practices, and must include: • an auditor’s review report, if
      available; • a treasurer’s report; and • any supplemental schedules. The nonprofit
      must also submit the most recent quarterly financial statements along with certification
      from a CPA or other financial professional attesting that the information accurately
      represents the financial condition of the nonprofit agency. The nonprofit must
      document and provide proof of the current source of operating funds and the
      long-term stability of these funding sources, which may include funding from
      governments, private entities, foundations, or other organizations. There must
      not be any identity of interest between the capital provider and a nonprofit’s
      Board of Directors or principal management. (10) Other Business Partners (a)
      Standard A nonprofit agency must demonstrate that it maintains control over
      its homeownership program and cannot rely upon a business partner(s) to operate
      the program for which it seeks FHA approval. I. DOING BUSINESS WITH FHA B. Other
      Participants 4. Nonprofits and Governmental Entities Handbook 4000.1 98 Last
      Revised: 11/26/2025 (b) Required Documentation The nonprofit must identify other
      business partners, such as real estate agents, Mortgagees, rehabilitation contractors
      and consultants providing administrative, financial, and management services.
      The nonprofit must identify the company by name and list staff with whom the
      nonprofit will work. The nonprofit must explain the nature and cost of the services
      and how the nonprofit exercises control over its business partners. (11) Consultant
      Services (a) Standard The nonprofit’s operations must be independent of the
      influence, control, or direction of the consultant or any other outside party,
      particularly those seeking to derive profit or gain from a proposed project
      (including landowners, real estate brokers, bankers, contractors, builders,
      or consultants). Consultant services must be provided on an arm’s length basis.
      Consultant services – administrative, management, financial, or otherwise –
      provided under an independent contractor relationship (as opposed to an employer-employee
      relationship) must not constitute more than half of the nonprofit’s activities
      throughout the duration of the approval period. This measurement will be calculated
      by evaluating the ratio of nonprofit staff to contracted or consultant staff;
      the ratio of hours devoted to the implementation of the AHP by nonprofit staff
      versus contracted or consultant staff; and the funds devoted to paying nonprofit
      staff compared to those paying contracted or consultant staff. The nonprofit
      must have the in-house resources and capacity to operate its own programs, and
      contract for services only on a temporary and supplementary basis. (b) Required
      Documentation The nonprofit must explain the nature and cost of its consultant
      services and how the nonprofit exercises control over consultants; describe
      the work that will be performed by consultants for each program; and provide
      the percentage of work performed by consultants for each program. The nonprofit
      must provide a disclosure and supporting documentation related to any agreements
      with other parties that may derive financial gain through the homeownership
      program. The disclosure must identify the name of the business entity, the individuals
      from the company who will be working with the nonprofit, the terms of the relationship,
      and how the party will be compensated. I. DOING BUSINESS WITH FHA B. Other Participants
      4. Nonprofits and Governmental Entities Handbook 4000.1 99 Last Revised: 11/26/2025
      (12) Acting on Own Behalf Certification The nonprofit must provide a certification
      signed by an authorized representative of the organization stating the following:
      I certify that (Name of Nonprofit agency) is acting on its own behalf and is
      not under the influence, control, or direction of any party seeking to derive
      a profit or a gain from the proposed project, such as, but not limited to, a
      landowner, real estate broker, banker, contractor, builder, lender, or consultant.
      WARNING: HUD will prosecute false claims and statements. Conviction may result
      in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729,
      3802). The certification must include the date, and the authorized representative’s
      printed name, signature, and title. (13) FHA Approval Letter If previously approved
      by FHA to participate in FHA’s nonprofit programs, the nonprofit must submit
      a copy of its most recent approval letter. (14) Adequate Facilities (a) Standard
      Nonprofits are required to have an adequate main office space in a designated
      physical location where the nonprofit manages its operations, meets with clients,
      distributes information, and renders services to the public. The nonprofit must
      not share its office space, general reception area, entrance, or lobby with
      any entity with whom the nonprofit has a conflict of interest. The office space
      must be clearly defined for the public and include a permanent and prominently
      displayed sign. (b) Required Documentation The nonprofit must submit the contact
      information and physical address of the agency’s main office and submit proof
      of the physical location. HUD may request additional information, like floor
      plans, photographs, or billing statements that include the physical address,
      to confirm the validity of the office space and that it meets requirements.
      I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits and Governmental
      Entities Handbook 4000.1 100 Last Revised: 11/26/2025 (15) Lending Partner(s)
      Information (a) Standard A nonprofit must ensure that no conflicts of interest
      exist. Employees of the Lender cannot receive personal or financial benefit
      because of the Business Relationship with the nonprofit. (b) Required Documentation
      The nonprofit must provide the name, address, and contact of any lending institution,
      bank, or private party that has provided financing to the nonprofit. (16) Affordable
      Housing Program Plan (a) Definition An Affordable Housing Program Plan (AHPP)
      refers to an approved plan that is a narrative describing a nonprofit’s plans
      to implement the Single Family nonprofit program(s) for which it is approved.
      The AHPP addresses how the nonprofit intends to provide affordable homeownership
      opportunities for Low- to Moderate-Income buyers by financing, purchasing, rehabilitating,
      and/or reselling homes to eligible buyers. (b) Standard The nonprofit must submit
      the AHPP as part of its application for approval. The nonprofit must address
      the general AHPP requirements and any program- specific AHPP requirements for
      each program for which it seeks approval. The nonprofit must submit a copy of
      the AHPP as part of their application to FHA. The nonprofit must adhere to the
      AHPP during the entire approval period. After approval, if the nonprofit seeks
      to expand the geographic area where it conducts its program or expand or modify
      its AHPP, the nonprofit must update the AHPP to include the new geographic area
      and submit an updated AHPP to the FHA Resource Center at answers@hud.gov with
      “Revised AHPP” in the subject line for approval. (c) AHPP Requirements The AHPP
      must address all general AHPP requirements and any program- specific AHPP requirements
      for each program for which the nonprofit seeks approval. I. DOING BUSINESS WITH
      FHA B. Other Participants 4. Nonprofits and Governmental Entities Handbook 4000.1
      101 Last Revised: 11/26/2025 The general AHPP must: • explain how the nonprofit
      intends to operationalize the program(s) for which it seeks approval; • describe
      the geographic area and provide the city, county, state, and zip codes where
      the nonprofit plans to administer its program(s). The program(s) must be operated
      within the geographic area specified by the AHPP. The AHPP must describe the
      nonprofit’s ability to execute its program throughout the geographic area in
      which it plans to operate; • provide an overview of the target population or
      community needs and challenges of the geographic area in which the nonprofit
      plans to operate, including the homeownership needs of the community, and describe
      the demographics of the community, including racial composition, income, and
      household size; • address how Low- to Moderate-Income individuals and families
      will benefit from participation in the program and how the nonprofit will locate
      the Low- to Moderate-Income individuals and families to participate; • explain
      how the nonprofit will transition Low- to Moderate-Income individuals and families
      into homeownership; • describe the type of homeownership counseling the nonprofit
      will provide to prospective homebuyers, if any; and • describe how the nonprofit
      will serve non-English speaking populations and clients with disabilities. (i)
      Program-Specific AHPP Requirements for HUD Homes and FHA Mortgagor If the nonprofit
      is applying for approval for HUD Homes or the FHA Mortgagor program, the nonprofit
      must also provide in its AHPP: • a general timeline or workflow for purchasing,
      rehabilitating, and selling properties the nonprofit intends to purchase; •
      the number of properties the nonprofit expects to purchase under the program;
      and • a copy of the lease purchase agreement, if applicable, and a description
      of the program, including how the nonprofit will transition renters to homeowners,
      how rent will be collected and applied, and if repair reserves will be used
      to minimize repair costs after purchase. (ii) Program-Specific AHPP Requirements
      for Secondary Financing If the nonprofit is applying for approval for the Secondary
      Financing program, the nonprofit must also provide in its AHPP: I. DOING BUSINESS
      WITH FHA B. Other Participants 4. Nonprofits and Governmental Entities Handbook
      4000.1 102 Last Revised: 11/26/2025 • a program overview with a description
      of the Secondary Financing program, including eligibility requirements, restrictions
      on transferability and owner occupancy, and equity sharing, if applicable; •
      a characterization of all fees and amounts charged to the Borrower and whether
      they will be part of the secondary lien; • the number of secondary financing
      loans the nonprofit agency expects to provide per year; • a description of how
      the nonprofit will maintain control and oversight of the servicing of the nonprofit’s
      loans; and • a description of how the agency will ensure the amount of assistance
      provided to homebuyers will conform with FHA underwriting guidelines. (iii)Board
      Resolution The nonprofit must submit a copy of a board resolution that adopts
      the completed AHPP, including the general AHPP requirements and any program-specific
      AHPP requirements. This resolution must be signed and dated by the appropriate
      persons under applicable state law and as identified in the Articles of Organization
      or other governing documents. (d) Required Documentation The nonprofit must
      submit a copy of the AHPP. For secondary financing, nonprofits must submit a
      copy of the agreement between the nonprofit and the servicing entity if the
      nonprofit plans to use another entity to service the subordinate lien. The nonprofit
      must submit a copy of the board resolution that adopts the AHPP. (17) Application
      Certification The nonprofit must include the following certification with the
      submission of a Complete Nonprofit Application: I/We, the undersigned, certify
      under penalty of perjury that the information provided above is true and correct.
      WARNING: Anyone who knowingly submits a false claim or makes a false statement
      is subject to criminal and/or civil penalties, including confinement for up
      to 5 years, fines, and civil and administrative penalties. (18 U.S.C. §§ 287,
      1001, 1010, 1012, 1014; 31 U.S.C. §§ 3729, 3802). The certification must include
      the date, and the authorized representative’s printed name, signature, and title.
      I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits and Governmental
      Entities Handbook 4000.1 103 Last Revised: 11/26/2025 (B) Program-Specific Eligibility
      Requirements All General Application Requirements apply to participation in
      any of the three nonprofit programs. Refer to the programs below for additional
      program-specific requirements. (1) HUD Homes [Text was deleted in this section.]
      (a) Restrictions on Sale or Lease of Properties FHA strictly prohibits the sale
      or lease of Properties acquired through the HUD Homes program to any of the
      nonprofit’s officers, directors, elected or appointed officials, employees,
      or business associates, either during their tenure or for one year thereafter,
      or to any individual who is related by blood, marriage, or law to any of the
      above. (b) Conflicts of Interest No person who is an employee, officer, or elected
      or appointed official of the nonprofit agency, or who is in a position to participate
      in a decision making process pursuant to the AHPP or gain inside information
      with regard to the lease or purchase of the Property pursuant to the AHPP may
      obtain a personal or financial interest or benefit from the purchase of the
      Property, or have an interest in any contract, subcontract, or agreement with
      respect thereto, or the proceeds thereunder, either for themselves, or for those
      with whom they have family or business ties, during their tenure or for one
      year thereafter. (2) FHA Mortgagor [Text was deleted in this section.] (a) Restrictions
      on Sale or Lease of Properties FHA strictly prohibits the sale or lease of Properties
      acquired by the nonprofit with FHA-insured financing to any of the nonprofit’s
      officers, directors, elected or appointed officials, employees, or business
      associates, either during their tenure or for one year thereafter, or to any
      individual who is related by blood, marriage, or law to any of the above. (b)
      Conflicts of Interest No person who is an employee, officer, or elected or appointed
      official of the nonprofit agency or who is in a position to participate in a
      decision making process pursuant to the AHPP or gain inside information with
      regard to the lease or purchase of the Property pursuant to the AHPP may obtain
      a personal or financial interest or benefit from the purchase of the Property,
      or have an interest in any contract, subcontract, or agreement with respect
      thereto, or the proceeds thereunder, either for themselves, or for those with
      whom they have family or business ties, during their tenure or for one year
      thereafter. I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits and
      Governmental Entities Handbook 4000.1 104 Last Revised: 11/26/2025 (3) Secondary
      Financing [Text was deleted in this section.] Restrictions on Conveyance (a)
      Standard Restrictions on conveyance must comply with the requirements in 24
      CFR § 203.41, including that they must automatically terminate if title to the
      mortgaged Property is transferred by foreclosure or Deed-In-Lieu (DIL) of Foreclosure,
      or if the Mortgage is assigned to the Secretary. (b) Required Documentation
      The nonprofit must submit copies of the legal instruments, such as the Mortgage
      and Note used by, or proposed to be used by, the nonprofit agency when providing
      secondary financing. Legal instruments with restrictions on conveyance must
      comply with the requirements in 24 CFR § 203.41. iv. Submitting the Application
      The nonprofit applicant must submit applications electronically through the
      HUD Nonprofit Data Management System (NPDMS). NPDMS is an automated web-based
      system designed to allow for the electronic submission of application, recertification,
      and reporting documentation. NPDMS collects, stores, and provides web-based
      access to participant applications and property activity data. After Submitting
      the Preliminary Information and receiving confirmation of eligibility, the applicant
      will be provided with login instructions to access NPDMS. FHA will not accept
      paper applications. The nonprofit must submit a completed application within
      30 Days of receiving access to NPDMS. The application date refers to the date
      that the application package is electronically submitted through NPDMS. v. Processing
      the Application FHA will review all completed applications for approval to determine
      whether the nonprofit complies with all eligibility requirements. If FHA requires
      additional documentation or clarifying information, it may request such additional
      information and provide the nonprofit with a deadline for response. If the nonprofit
      does not provide the additional information requested by any specified deadline,
      FHA may deny approval on this basis. I. DOING BUSINESS WITH FHA B. Other Participants
      4. Nonprofits and Governmental Entities Handbook 4000.1 105 Last Revised: 11/26/2025
      vi. Incomplete Application Nonprofit agencies that submit an incomplete application
      package will receive a letter indicating the information required to cure the
      deficiency. This letter will give nonprofit agencies 15 Days from the date on
      the letter to correct any deficiencies. If the new nonprofit applicant does
      not satisfy the outstanding requirement in its entirety and within the prescribed
      deadlines, the approval will be denied and the nonprofit must wait an additional
      90 Days before re-applying. vii. Application Approval Nonprofit agencies that
      are approved for participation will be issued an approval letter from FHA describing
      which activities the nonprofit is approved for and any limitations associated
      with that approval. viii. Application Rejection A nonprofit’s application may
      be rejected due to deficiencies or for failure to submit a program that complies
      with applicable regulations and requirements of this Handbook 4000.1. Nonprofit
      agencies that are not approved for participation will be issued a rejection
      letter from FHA describing the reasons for the application rejection. The nonprofit
      must wait 90 Days to submit a new application. ix. Recertification (A) Standard
      (1) Recertification Process To retain FHA approval, nonprofits must complete
      FHA’s recertification process prior to their two-year approval expiration. Recertification
      of nonprofit agencies is not automatic. Recertification requires that a nonprofit
      meet the Complete Nonprofit Application requirements and provide a program activity
      update. (a) Complete Nonprofit Application Requirements Recertification requires
      the nonprofit to certify it continues to meet the Complete Nonprofit Application
      requirements, except for the Relevant Experience requirement. The nonprofit
      must identify the requirements of the Complete Nonprofit Application that have
      not changed. For any Complete Nonprofit Application requirements that have changed
      during the approval period, including but not limited to the Board of Directors,
      principal management, consultant services, adequate facilities, or lending partners,
      the nonprofit must identify those I. DOING BUSINESS WITH FHA B. Other Participants
      4. Nonprofits and Governmental Entities Handbook 4000.1 106 Last Revised: 11/26/2025
      requirements, describe what has changed, and upload the updated information
      or documentation into the Nonprofit Data Management System (NPDMS). The nonprofit
      must provide updated Financial Capacity documentation at recertification. (b)
      Program Activity The nonprofit must provide information about the nonprofit’s
      activity in the nonprofit programs for which it was approved, during the approval
      period. Nonprofits must demonstrate that they have created affordable housing
      opportunities. Nonprofits must demonstrate that they met the following standards,
      if applicable, during the approval period: • ability to meet the goal of expanding
      affordable housing opportunities for Low- to Moderate-Income individuals and
      families; • compliance with the program requirements for each program the nonprofit
      is approved to participate in; and • adherence to the AHPP for the programs
      in which the nonprofit participates. The nonprofit must submit information about
      its program activity, for each program it participates in, during the approval
      period. The nonprofit must provide the specific program activity information
      as set forth below: Program Activity Required Information HUD Homes • Property
      address • FHA case number (on acquisition) • Date of acquisition • Loan type
      • Purchase price • Mortgage amount • Name of Mortgagee • Discount amount • Net
      Development Costs (NDC) • Sold to Low- to Moderate- Income individual or family
      (yes or no) • Resale price • Resale date FHA Mortgagor • Case number • Mortgage
      amount • Settlement date • Loan type I. DOING BUSINESS WITH FHA B. Other Participants
      4. Nonprofits and Governmental Entities Handbook 4000.1 107 Last Revised: 11/26/2025
      • If 203(k), date of rehabilitation completion • Name of Mortgagee • Is the
      loan part of a lease purchase program (yes or no) • If so, have renters become
      homeowners under the terms of the agreement (yes or no) • Sales price if property
      resold • Sale to a Low- to Moderate- Income individual or family (yes or no)
      • Was the loan assumed (yes or no) • Delinquency date • Foreclosure date Secondary
      Financing • Property address • First lien mortgage amount • Second lien mortgage
      amount • Date of origination • Name of Mortgagee • Forgivable (yes or no) •
      Delinquency date • Foreclosure date (c) Recertification Certification The nonprofit
      must include the following certification with the submission of the recertification
      package: I/We, the undersigned, certify under penalty of perjury that the information
      provided above is true and correct. WARNING: Anyone who knowingly submits a
      false claim or makes a false statement is subject to criminal and/or civil penalties,
      including confinement for up to 5 years, fines, and civil and administrative
      penalties. (18 U.S.C. §§ 287, 1001, 1010, 1012, 1014; 31 U.S.C. §§ 3729, 3802).
      The certification must include the date, and the authorized representative’s
      printed name, signature, and title. (2) Filing Deadline The required documentation
      must be submitted to the FHA Resource Center at answers@hud.gov at least 90
      Days prior to the end of the approval period. FHA I. DOING BUSINESS WITH FHA
      B. Other Participants 4. Nonprofits and Governmental Entities Handbook 4000.1
      108 Last Revised: 11/26/2025 must be notified of any changes that impact the
      recertification application after it has been submitted. (B) Required Documentation
      The recertification process requires a nonprofit to identify requirements of
      the Complete Nonprofit Application that have not changed. For any Complete Nonprofit
      Application requirements that have changed during the approval period, the nonprofit
      must identify those requirements, describe what has changed, and upload the
      updated information or documentation into the Nonprofit Data Management System
      (NPDMS). To assist in identifying requirements that have not changed, as well
      as those that have, nonprofits may use, but are not required to use, the FHA
      Nonprofit Recertification Checklist. Nonprofits must submit program activity
      data in NPDMS. Nonprofits may use, but are not required to use, the FHA Nonprofit
      Activity Workbook. (C) Incomplete Recertification Application Nonprofit agencies
      that submit incomplete recertification applications will receive a letter indicating
      the information required to cure the deficiency. This letter will give nonprofit
      agencies 15 Days from the date on the letter to correct any deficiencies. If
      the nonprofit applicant does not satisfy the outstanding requirement in its
      entirety and within the prescribed deadlines, the approval for recertification
      will be denied. If the nonprofit does not submit an acceptable recertification
      application before the expiration of the two-year approval period, the nonprofit
      will be removed from the HUD Nonprofit Roster. (D) Failure to Recertify Failure
      to recertify will result in the nonprofit’s removal from the program and the
      HUD Nonprofit Roster. The nonprofit must comply with all program requirements
      for any program activity that was not finalized at the time of removal. (E)
      Recertification Application Approval Nonprofit agencies that are recertified
      for participation will be issued an approval letter from FHA describing which
      activities the nonprofit is approved for and any limitations associated with
      that approval. An approval is valid for a two-year period. I. DOING BUSINESS
      WITH FHA B. Other Participants 4. Nonprofits and Governmental Entities Handbook
      4000.1 109 Last Revised: 11/26/2025 (F) Recertification Application Rejection
      A nonprofit’s recertification application may be rejected due to deficiencies
      or for failure to submit a program that complies with applicable regulations
      and requirements of this Handbook 4000.1. Nonprofit agencies that are not approved
      for recertification will be issued a rejection letter from FHA describing the
      reasons for the rejection of the recertification application and will be removed
      from the HUD Nonprofit Roster.'
  judgment: false
