source:
  type: guide
  id: hud-4000-1-i-c-title-i-programs
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part I — c. Title I
    Programs (11/07/2023)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part I — c. Title
    I Programs (11/07/2023).
  coverage_tier: operative
obligations:
- id: hud-4000-1-i-c-title-i-programs-full
  canonical_id: hud-4000-1-i-c-title-i-programs-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part I — c. Title I Programs
    (11/07/2023)
  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 — c. Title
      I Programs (11/07/2023)
    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: 'c. Title I Programs (11/07/2023) i. Title I Insurance Authority
      (A) Sponsor/Sponsored Third-Party Originator Relationship (1) Definition A Sponsor/Sponsored
      Third-Party Originator (TPO) Relationship is one in which a Title I Lender (acting
      as the “sponsor”) permits another entity to act as an originator and originate
      Title I-insured Direct Loans on behalf of the Lender. (2) Standard A Title I
      Lender may sponsor a TPO only in connection with the Direct Loan process. The
      TPO may not be a Title I Manufactured Home Dealer or Title I Property Improvement
      Dealer, who are subject to requirements for supervision and monitoring. A Title
      I Lender must ensure its sponsored TPO meets all state license, registration,
      or equivalent approval requirements. A Title I Lender must ensure its sponsored
      TPO and the TPO’s officers, partners, directors, principals, managers, supervisors,
      loan processors, and loan originators are not ineligible under 24 CFR § 202.5(j).
      I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 5. Supplemental
      Mortgagee Authorities Handbook 4000.1 39 Last Revised: 11/26/2025 A sponsored
      TPO is authorized to originate Loans for sale or transfer to a Title I approved
      Lender. A Title I approved Lender must ensure its sponsored TPO does not close
      Loans in their own name. Exception for Title I Lenders Acting as a Sponsored
      Third-Party Originator A Title I Lender may permit its sponsored TPO to close
      Loans in their own name if the TPO is also a Title I Lender. (3) Required Documentation
      The Title I Lender reporting the Loan for insurance in FHAC must document the
      following information in the case binder: • Employer Identification Number (EIN)
      • Name of Sponsored TPO • Loan Officer Name • FHA Lender ID Number for TPO if
      also FHA Approved (B) Direct Endorsement Authority for Property Improvement
      Loan FHA’s Direct Endorsement delegated authority does not apply to the Title
      I Property Improvement Loan program. Lenders originate Property Improvement
      Loans, and underwrite, close and disburse before reporting the Loan for Title
      I case number assignment and insurance. HUD does not require the Lender to submit
      loan documents to HUD prior to or at the time of reporting the Loan. Lenders
      submit loan documents only for claim filing or any Post-Endorsement Technical
      Review (PETR). (1) FHA Lender Approval A Lender must have FHA approval as a
      Title I Supervised, Nonsupervised, or Government Lender to be eligible to participate
      in the Title I program. (2) Underwriter Qualifications (a) Standard The underwriter
      must be a full-time employee of the Lender. The underwriter must be a reliable
      and responsible professional who is skilled in loan evaluation and is able to
      demonstrate knowledge and experience regarding principles of retail installment
      sales and loan underwriting. I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees
      (09/20/2021) 5. Supplemental Mortgagee Authorities Handbook 4000.1 40 Last Revised:
      11/26/2025 (b) Required Documentation The Lender is not required to register
      the underwriter for Title I Property Improvement Loans. (C) Direct Endorsement
      Authority for Manufactured Home Loan (1) Scope of Authority Approval to participate
      in FHA’s Direct Endorsement Program permits a Lender to underwrite Title I Single
      Family Loans without FHA’s prior review and submit them directly for FHA insurance
      endorsement. (a) Definitions (i) Conditional Direct Endorsement Authority Conditional
      Direct Endorsement Authority is the authority of a Lender that has applied for
      and received basic FHA Lender approval as a Supervised, Nonsupervised, or Government
      Lender, and has not entered or completed the Test Case Phase. (ii) Test Case
      Phase The Test Case Phase is when a Lender must submit each case binder to HUD
      for a pre-closing review. If the Loan passes the review, HUD will issue permission
      to close the Loan. Once HUD determines that the Lender has sufficient competence,
      HUD will grant the Lender permission to close Loans without a pre-closing review.
      However, a minimum of 10 Loans must go through the pre-closing review process
      before HUD will waive the pre-closing review process. (iii) Unconditional Direct
      Endorsement Authority Unconditional Direct Endorsement Authority permits a Lender
      to underwrite and close Title I Loans prior to submitting them to FHA for FHA
      insurance endorsement. (b) Standard To obtain Unconditional Direct Endorsement
      authority, the Lender must successfully complete the Test Case Phase, which
      permits FHA to evaluate the Lender’s qualifications, experience, and expertise
      to underwrite Loans that satisfy FHA requirements. I. DOING BUSINESS WITH FHA
      A. FHA Lenders and Mortgagees (09/20/2021) 5. Supplemental Mortgagee Authorities
      Handbook 4000.1 41 Last Revised: 11/26/2025 (2) FHA Lender Approval A Lender
      must have FHA approval as a Title I Supervised, Nonsupervised, or Government
      Lender to be eligible to participate in the DE Program. Lenders approved as
      investing Lenders are not eligible to participate in the DE Program. (3) Underwriter
      Qualifications (a) Standard The underwriter must be a full-time employee of
      the Lender. The underwriter must be a reliable and responsible professional
      who is skilled in loan evaluation and is able to demonstrate knowledge and experience
      regarding principles of retail installment sales and loan underwriting. (b)
      Required Documentation The Lender must register each underwriter in FHA Connection
      (FHAC). By registering the underwriter in FHAC, the Lender certifies that the
      underwriter meets the necessary qualifications to underwrite Title I Manufactured
      Home Loans. (4) Exception for Certain Lenders Created by Merger, Acquisition,
      or Reorganization Unconditional Direct Endorsement authority may be granted
      without the need for the Test Case Phase to surviving FHA-approved Lenders or
      to new Lenders resulting in new FHA Lender IDs, so long as the following criteria
      are met: • either or both institutions were unconditionally Direct Endorsement-
      approved prior to the merger, acquisition, or reorganization; and • if both
      institutions are unconditionally Direct Endorsement-approved, then the management
      and staff of at least one of the Lenders involved with the Lender’s Unconditional
      Direct Endorsement authority prior to the merger, acquisition, or reorganization
      must continue to exercise those responsibilities for the new Lender. If only
      one institution is unconditionally Direct Endorsement-approved, then the management
      and staff involved with that Lender’s Unconditional Direct Endorsement authority
      prior to the merger, acquisition, or reorganization must continue to exercise
      those responsibilities for the new Lender. I. DOING BUSINESS WITH FHA A. FHA
      Lenders and Mortgagees (09/20/2021) 5. Supplemental Mortgagee Authorities Handbook
      4000.1 42 Last Revised: 11/26/2025 (D) Application and Approval for Direct Endorsement
      Authority for Manufactured Home Loans (1) First-Time Applicants (a) Application
      (i) Request to Enter into the Test Case Phase The Lender must submit a written
      application for Unconditional Direct Endorsement authority to the Financial
      Operations Center (FOC), Attention: Premiums (Title I Insurance Processing)
      Branch. To be approved to participate in FHA’s Title I Direct Endorsement Program,
      each Lender must satisfactorily underwrite sufficient pre-closing Test Cases,
      as prescribed by HUD. (ii) Required Documentation To apply for Direct Endorsement
      Title I authority, the Lender must submit a letter to the FOC requesting entry
      into the Test Case Phase. The letter must contain the Lender’s home office address
      and 10-digit Lender ID and be signed by a Corporate Officer. (b) Test Case Phase
      The Lender must submit at least 10 Title I Test Cases to the FOC for review
      and final approval before closing and disbursing loan funds. The Lender must
      submit loan documentation to the attention of MH Pre- Closing Review at the
      FOC. (c) Approval Decision (i) Approval of Unconditional Direct Endorsement
      Authority The FOC will review these cases for compliance with origination and
      underwriting requirements and issue a written approval or denial to the Lender.
      The Lender may only close and submit for insurance endorsement any Loan that
      receives written approval. HUD will approve the Lender for Unconditional Direct
      Endorsement when HUD determines that the Lender is consistently submitting Loans
      that satisfactorily meet Title I program requirements. HUD will advise the Lender
      in writing when Unconditional Direct Endorsement approval is granted. I. DOING
      BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 5. Supplemental
      Mortgagee Authorities Handbook 4000.1 43 Last Revised: 11/26/2025 Direct Endorsement
      Processing An Unconditional Direct Endorsement-approved Lender must continue
      to report each Loan to HUD by obtaining a Title I case number through FHAC.
      The Lender must also comply with HUD’s post-closing requirements, including
      completing the insurance application and submitting the case binder for pre-endorsement
      review. Approval Limitations HUD may revoke a Lender’s Unconditional Direct
      Endorsement approval, or limit the approval to certain types of Loans. (HUD
      may extend or revoke DE approval in whole or in part at any time.) (ii) Denial
      of Unconditional Direct Endorsement Authority The Lender will be denied approval
      for Unconditional Direct Endorsement authority if, at any time during the Test
      Case Phase, FHA determines that the Lender’s submissions demonstrate a lack
      of knowledge of FHA requirements, or if FHA identifies unacceptable practices.
      Denial Decision FHA will provide the Lender with written notice of a denial
      of Unconditional Direct Endorsement authority that specifies the reason for
      the denial. Denial Appeal The Lender may appeal this denial by requesting an
      informal conference. The Lender must submit its appeal in writing to the FOC.
      The FOC must receive the appeal within 30 Days of the date of the notice of
      denial. Informal Conference FHA will conduct an informal conference with the
      Lender and its counsel, if any, no later than 60 Days from the date of the denial.
      Determination FHA will issue a determination in writing following the informal
      conference stating whether Unconditional Direct Endorsement authority is approved
      or denied. The decision after the conference constitutes final agency action.
      I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 5. Supplemental
      Mortgagee Authorities Handbook 4000.1 44 Last Revised: 11/26/2025 (iii) Reapplication
      following Denial Any Lender who is denied Unconditional Direct Endorsement authority
      will not be permitted to re-apply until it has: • demonstrated appropriate remedial
      education or action; • supplied evidence to support such action; and • waited
      a minimum of 180 Days from the date of final agency action. (2) Applications
      from Lenders Created by Merger, Acquisition, or Reorganization (a) Standard
      The Lender must submit a written application for Unconditional Direct Endorsement
      authority to the FOC. (b) Required Documentation The Lender’s Direct Endorsement
      application must contain the following: • a letter signed by a Corporate Officer
      requesting Unconditional Direct Endorsement authority that specifies: o the
      FHA-approved and non-approved entities involved in the merger, acquisition,
      or reorganization; o which entity is the surviving entity; and o the effective
      date of the merger, acquisition, or reorganization; and • supporting documentation
      evidencing that the Lender meets the exception criteria detailed above.'
  judgment: false
