source:
  type: guide
  id: hud-4000-1-i-b-title-ii-single-family-lender-insurance-authority
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part I — b. Title II
    Single Family Lender Insurance Authority (01/24/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part I — b. Title
    II Single Family Lender Insurance Authority (01/24/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-i-b-title-ii-single-family-lender-insurance-authority-full
  canonical_id: hud-4000-1-i-b-title-ii-single-family-lender-insurance-authority-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part I — b. Title II
    Single Family Lender Insurance Authority (01/24/2022)
  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. Title
      II Single Family Lender Insurance Authority (01/24/2022)
    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. Title II Single Family Lender Insurance Authority (01/24/2022)
      i. Scope of Authority Approval to participate in FHA’s Title II Single Family
      Lender Insurance Program permits a Mortgagee to endorse Mortgages for insurance
      with no prior review by FHA. (A) Definitions (1) Lender Insurance Authority
      Lender Insurance (LI) Authority permits a Mortgagee with Title II Unconditional
      Direct Endorsement authority to endorse Single Family Mortgages for insurance
      without prior review by FHA. (2) Lender Insurance Compare Ratio The Lender Insurance
      (LI) Compare Ratio is the percentage of Mortgages underwritten by the Mortgagee
      that are in claim or default status compared with the percentage of Mortgages
      in claim or default status for all Mortgagees operating in the same state(s)
      over the preceding two-year period. I. DOING BUSINESS WITH FHA A. FHA Lenders
      and Mortgagees (09/20/2021) 5. Supplemental Mortgagee Authorities Handbook 4000.1
      36 Last Revised: 11/26/2025 (B) Standard To obtain Title II Single Family LI
      Authority, the Mortgagee must meet the eligibility requirements as stated below
      and successfully complete the application and approval processes. ii. Eligibility
      Requirements (A) Standard To obtain LI approval, the Mortgagee must: • be an
      FHA-approved Mortgagee with Unconditional Direct Endorsement authority; and
      • have an LI Compare Ratio that is at or below 150 percent. (1) Exception for
      New Mortgagees Created by Merger, Acquisition, or Reorganization Resulting in
      New FHA Lender Identification Number If the Mortgagee lacks an LI Compare Ratio
      because it was recently created by a merger, acquisition, or reorganization
      that resulted in the issuance of a new FHA Lender ID, it must: • have Unconditional
      Direct Endorsement authority; • have had one or more Mortgagees with LI Authority
      at the time of the merger, acquisition, or reorganization, participate in the
      merger, acquisition, or reorganization; • have had an acceptable LI Compare
      Ratio for all Mortgagees with LI Authority participating in the merger, acquisition,
      or reorganization, at the time of the merger, acquisition, or reorganization;
      • have an LI Compare Ratio that is derived from aggregating the claims and defaults
      of all formerly FHA-approved Mortgagees participating in the merger, acquisition,
      or reorganization that is not more than 150 percent; and • ensure that the management
      and staff who were involved with LI processing for the FHA-approved Mortgagee
      prior to the merger, acquisition, or reorganization will continue to exercise
      those responsibilities for the new Mortgagee. iii. Application and Approval
      (A) First-Time Applicants (1) Standard The Mortgagee must apply for LI Authority
      through FHAC. I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021)
      5. Supplemental Mortgagee Authorities Handbook 4000.1 37 Last Revised: 11/26/2025
      (2) Required Documentation Before applying, the Mortgagee must make a written
      determination that it will participate in the LI Program. The Mortgagee’s written
      determination to participate in the LI Program must be signed by a Principal
      Owner or Corporate Officer. The Mortgagee must retain a copy of such written
      determination and make it available to HUD upon request. (3) Approval FHAC will
      automatically approve or deny the Mortgagee’s LI Authority based on the Mortgagee’s
      Direct Endorsement approval status and LI Compare Ratio. (B) Application from
      Mortgagee Created by Merger, Acquisition, or Reorganization Resulting in New
      FHA Lender Identification Number (1) Standard Mortgagees created through mergers,
      acquisitions, or reorganizations that are issued a new FHA Lender ID must apply
      for LI Authority through LEAP. (2) Required Documentation The Mortgagee’s application
      must contain the following: • a copy of the Acknowledgment of Terms and Conditions
      for LI screen in FHAC, printed and signed by a Corporate Officer; • the name
      and contact information of the LI contact person and, at the discretion of the
      Mortgagee, the name and contact information for the back-up LI contact person;
      • the name and FHA Lender ID of the new Mortgagee; • the names and FHA Lender
      IDs of the Mortgagees participating in the merger, acquisition, or reorganization;
      and • information identifying the management and staff experienced with LI processing
      employed by the new Mortgagee or transferring from a Mortgagee that previously
      held LI approval, and describing how the management and staff will continue
      to exercise LI responsibilities for the new Mortgagee. (C) Reinstatement A Mortgagee
      that voluntarily withdrew its LI Authority may apply for reinstatement. (1)
      Standard The Mortgagee must meet the LI Eligibility Requirements. I. DOING BUSINESS
      WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 5. Supplemental Mortgagee
      Authorities Handbook 4000.1 38 Last Revised: 11/26/2025 (2) Required Documentation
      The Mortgagee must apply for reinstatement of LI Authority by submitting a Change
      Request for Add Insurance Authority in LEAP and include the following: • a copy
      of the Acknowledgment of Terms and Conditions for LI page from FHAC, signed
      by a Corporate Officer; • detailed description of the reason(s) the LI Authority
      was previously withdrawn; • description of the corrective action taken, if necessary;
      and • the name and contact information of the LI contact person and, at the
      discretion of the Mortgagee, the name and contact information for the back-up
      LI contact person. iv. Post-approval Requirement (A) Lender Insurance Contact
      Information A Mortgagee approved for LI Authority must maintain the Mortgagee’s
      LI contact information in the Lender Insurance Contact function in FHAC.'
  judgment: false
