source:
  type: guide
  id: hud-4000-1-ii-g-asset-requirements
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — g. Asset
    Requirements (08/19/2024)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — g. Asset
    Requirements (08/19/2024).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-g-asset-requirements-full
  canonical_id: hud-4000-1-ii-g-asset-requirements-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — g. Asset Requirements
    (08/19/2024)
  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 II — g. Asset
      Requirements (08/19/2024)
    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: 'g. Asset Requirements (08/19/2024) i. General Asset Requirements
      When calculating sources of funds available to meet closing requirements, the
      Mortgagee may only consider assets derived from acceptable sources in accordance
      with the requirements outlined below. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 5. Performing the Financial
      Assessment of the Borrower Handbook 4000.1 674 Last Revised: 11/26/2025 The
      Mortgagee must document all funds that are used to calculate borrower funds
      that are required to close a HECM, including those to pay: • Mandatory Obligations;
      • costs outside of closing; • other required cash from the Borrower to close
      the transaction; or • additional funds the Borrower brings to closing to reduce
      Mandatory Obligations. (A) Determining the Amount Needed for Closing The amount
      of cash needed by the Borrower to close an FHA-insured HECM is the difference
      between Mandatory Obligations and the Principal Limit. (B) Mortgagee Responsibility
      for Estimating Closing Cost Requirements The Mortgagee must determine the total
      amount of cash that the Borrower must provide at HECM closing. (1) Loan Origination
      Fees and Other Closing Costs The Mortgagee may charge a reasonable loan origination
      fee. The Mortgagee may charge and collect from Borrowers those customary and
      reasonable closing costs and prepaid items necessary to close the HECM. Charges
      may not exceed the actual costs. (2) Initial Mortgage Insurance Premium Amounts
      Any IMIP amounts paid in cash are added to the total cash closing requirements.
      (3) Real Estate Agent Fees If a Borrower is represented by a real estate agent
      and must pay any fee directly to the agent, that expense must be included in
      the total of the Borrower’s closing requirements. (4) Types of Prepaid Items
      Prepaid items may include flood and hazard insurance premiums, MIPs, and real
      estate taxes. They must comply with the requirements of the CFPB. ii. Acceptable
      Sources of Funds The Mortgagee must verify liquid assets from acceptable sources
      used to calculate availability of funds required to close. Mortgagees may not
      count the same asset twice (i.e., as a source of imputed income to support Residual
      Income and as a source of cash to close). II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 5. Performing the Financial
      Assessment of the Borrower Handbook 4000.1 675 Last Revised: 11/26/2025 (A)
      Checking and Savings Accounts (1) Definition Checking and Savings Accounts refer
      to funds from Borrower-held accounts in a financial institution that allows
      for withdrawals and deposits. (2) Standard The Mortgagee must verify and document
      the existence of and amounts in the Borrower’s checking and savings accounts.
      The Mortgagee must verify and document the source of deposits for recently opened
      accounts and recent individual deposits of more than 1 percent of the MCA. (3)
      Required Documentation If the Borrower does not hold the deposit account solely,
      all non-Borrower parties on the account must provide a written statement that
      the Borrower has full access and use of the funds. (a) Traditional Documentation
      The Mortgagee must obtain: • a written Verification of Deposit (VOD) and the
      Borrower’s most recent statement for each account; or • direct verification
      by a TPV vendor of the Borrower’s account covering activity for a minimum of
      the most recent available month for a minimum of one month, subject to the following
      requirements: • the Borrower has authorized the Mortgagee to use a TPV vendor
      to verify assets; and • the date of the data contained in the completed verification
      is current within 30 days of the date of the verification. (b) Alternative Documentation
      If a VOD is not obtained, a statement showing the previous month’s ending balance
      for the most recent month is required. If the previous month’s balance is not
      shown, the Mortgagee must obtain statement(s) for the most recent two months.
      (B) Cash on Hand (1) Definition Cash on Hand refers to cash held by the Borrower
      outside of a financial institution. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 5. Performing the Financial
      Assessment of the Borrower Handbook 4000.1 676 Last Revised: 11/26/2025 (2)
      Standard The Mortgagee must verify that the Borrower’s Cash on Hand is deposited
      in a financial institution or held by the escrow/title company. (3) Required
      Documentation The Mortgagee must verify and document the Borrower’s Cash on
      Hand by obtaining an explanation from the Borrower describing how the funds
      were accumulated and the amount of time it took to accumulate the funds. The
      Mortgagee must also determine the reasonableness of the accumulation based on
      the time period during which the funds were saved and the Borrower’s: • income
      stream; • spending habits; • documented expenses; and • history of using financial
      institutions. (C) Retirement Accounts (1) Definition Retirement Accounts refer
      to assets accumulated by the Borrower for the purpose of retirement. (2) Standard
      The Mortgagee may include the value of assets from the Borrower’s retirement
      accounts, which includes IRAs, thrift savings plans, 401(k) plans, and Keogh
      accounts. If the Borrower has an existing loan, the Mortgagee must deduct the
      outstanding loan balance from the value of the retirement accounts. (3) Required
      Documentation The Mortgagee must obtain the most recent monthly or quarterly
      statement to verify and document the existence and amounts in the Borrower’s
      retirement accounts, the Borrower’s eligibility for withdrawals, and the terms
      and conditions for withdrawal from any retirement account. If any portion of
      the asset is required for funds to close, evidence of liquidation is required.
      (D) Stocks and Bonds (1) Definition Stocks and Bonds are investment assets accumulated
      by the Borrower. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II
      Insured Housing Programs Reverse Mortgages 5. Performing the Financial Assessment
      of the Borrower Handbook 4000.1 677 Last Revised: 11/26/2025 (2) Standard The
      Mortgagee must determine the value of the stocks and bonds from the most recent
      monthly or quarterly statement. If the stocks and bonds are not held in a brokerage
      account, the Mortgagee must determine the current value of the stocks and bonds
      through TPV. Government- issued savings bonds are valued at the original purchase
      price unless the Mortgagee verifies and documents that the bonds are eligible
      for redemption when cash to close is calculated. (3) Required Documentation
      The Mortgagee must verify and document the existence of the Borrower’s stocks
      and bonds by obtaining brokerage statement(s) for each account for the most
      recent two months. Evidence of liquidation is not required. For stocks and bonds
      not held in a brokerage account, the Mortgagee must obtain a copy of each stock
      or bond certificate. (E) Private Savings Clubs (1) Definition Private Savings
      Club refers to a non-traditional method of saving by making deposits into a
      member-managed resource pool. (2) Standard The Mortgagee may consider Private
      Savings Club funds that are distributed to and received by the Borrower as an
      acceptable source of funds. The Mortgagee must verify and document the establishment
      and duration of the club, and the Borrower’s receipt of funds from the club.
      The Mortgagee must also determine that the received funds were reasonably accumulated,
      and not borrowed. (3) Required Documentation The Mortgagee must obtain the club’s
      account ledgers and receipts, and a verification from the club treasurer that
      the club is still active. (F) Gifts (1) Definition Gifts refer to the contributions
      of cash with no expectation of repayment. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 5. Performing the Financial
      Assessment of the Borrower Handbook 4000.1 678 Last Revised: 11/26/2025 (2)
      Standards for Gifts (a) Acceptable Sources of Gifts Funds Gifts may be provided
      by: • the Borrower’s Family Member; • the Borrower’s employer or labor union;
      • a close friend with a clearly defined and documented interest in the Borrower;
      • a charitable organization; or • a governmental agency or that has a program
      providing homeownership assistance to: • low- or moderate-income families; or
      • first-time homebuyers. (b) Donor’s Source of Funds Cash on Hand is not an
      acceptable source of donor gift funds. (3) Required Documentation The Mortgagee
      must obtain a gift letter signed and dated by the donor and Borrower that includes
      the following: • the donor’s name, address, and telephone number; • the donor’s
      relationship to the Borrower; • the dollar amount of the Gift; and • a statement
      that no repayment is required. Documenting the Transfer of Gifts The Mortgagee
      must verify and document the transfer of Gifts from the donor to the Borrower
      in accordance with the requirements below. • For Gifts that will be verified
      prior to settlement, the Mortgagee must obtain one of the following: • the donor’s
      bank statement showing the withdrawal and evidence of the deposit into the Borrower’s
      account; • a copy of the donor’s canceled check and evidence of deposit into
      the Borrower’s account; • a copy of the donor’s withdrawal receipt and evidence
      of deposit into the Borrower’s account; or • evidence of the electronic transfer
      of funds from the donor’s account to the Borrower’s account. • For Gifts that
      will be verified at settlement, the Mortgagee must obtain one of the following
      evidencing payment to the settlement agent: • evidence of electronic transfer
      of funds from the donor’s account; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 5. Performing the Financial
      Assessment of the Borrower Handbook 4000.1 679 Last Revised: 11/26/2025 • bank
      certified check; • cashier’s check; or • other official bank check . • For Gifts
      of land, the Mortgagee must obtain: • proof of ownership by the donor; and •
      evidence of the transfer of title to the Borrower. Regardless of when gift funds
      are made available to a Borrower or settlement agent, the Mortgagee must be
      able to make a reasonable determination that the gift funds were not provided
      by an unacceptable source. (G) Sale of Real Property (1) Definition The Sale
      of Real Property refers to the sale of Property currently owned by the Borrower.
      (2) Standard Net proceeds from the Sale of Real Property may be used as a source
      of acceptable funds. (3) Required Documentation The Mortgagee must verify and
      document the actual sale and the Net Sale Proceeds by obtaining a fully executed
      Closing Disclosure or similar legal document. The Mortgagee must also verify
      and document that it is an Arm’s Length Transaction, and that the Borrower is
      entitled to the Net Sale Proceeds. (H) Sale of Personal Property (1) Definition
      Personal Property refers to tangible property, other than Real Property, such
      as cars, recreational vehicles, stamps, coins, or other collectibles. (2) Standard
      The Mortgagee must use the lesser of the estimated value or actual sales price
      when determining the sufficiency of assets to close. (3) Required Documentation
      Borrowers may sell Personal Property to obtain cash for closing. II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse
      Mortgages 5. Performing the Financial Assessment of the Borrower Handbook 4000.1
      680 Last Revised: 11/26/2025 The Mortgagee must obtain a satisfactory estimate
      of the value of the item, a copy of the bill of sale, evidence of receipt, and
      deposit of proceeds. A value estimate may take the form of a published value
      estimate issued by organizations such as automobile dealers, philatelic or numismatic
      associations, or a separate written appraisal by a qualified Appraiser with
      no financial interest in the mortgage transaction. (I) Disaster Relief Grants
      (1) Definition Disaster Relief Grants refer to grants from a Governmental Entity
      that provide immediate housing assistance to individuals displaced due to a
      natural disaster. (2) Required Documentation The Mortgagee must verify and document
      the Borrower’s receipt of the grant and terms of use. (J) Employer Assistance
      (1) Definition Employer Assistance refers to benefits provided by an employer
      to relocate the Borrower or assist in the Borrower’s housing purchase, including
      closing costs, MIP, or any portion of the monetary investment. Employer Assistance
      does not include benefits provided by an employer through secondary financing.
      A salary advance cannot be considered as assets to close. (2) Standard (a) Relocation
      Guaranteed Purchase The Mortgagee may allow the net proceeds (the relocation
      guaranteed purchase price minus the outstanding liens and expenses) to be used
      as cash to close. (b) Employer Assistance Plans The amount received under Employer
      Assistance Plans may be used as cash to close. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 5. Performing the Financial
      Assessment of the Borrower Handbook 4000.1 681 Last Revised: 11/26/2025 (3)
      Required Documentation (a) Relocation Guaranteed Purchase If the Borrower is
      being transferred by their company under a guaranteed sales plan, the Mortgagee
      must obtain an executed buyout agreement signed by all parties and a receipt
      of funds indicating that the employer or relocation service takes responsibility
      for the outstanding mortgage debt. The Mortgagee must verify and document the
      agreement guaranteeing employer purchase of the Borrower’s previous residence
      and the net proceeds from sale. (b) Employer Assistance Plans The Mortgagee
      must verify and document the Borrower’s receipt of assistance. If the employer
      provides this benefit after settlement, the Mortgagee must verify and document
      that the Borrower has sufficient cash for closing.'
  judgment: false
