source:
  type: guide
  id: hud-4000-1-i-d-post-approval-requirements
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part I — d. Post-approval
    Requirements (03/14/2016)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part I — d. Post-approval
    Requirements (03/14/2016).
  coverage_tier: operative
obligations:
- id: hud-4000-1-i-d-post-approval-requirements-full
  canonical_id: hud-4000-1-i-d-post-approval-requirements-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part I — d. Post-approval
    Requirements (03/14/2016)
  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 — d. Post-approval
      Requirements (03/14/2016)
    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: 'd. Post-approval Requirements (03/14/2016) The Mortgagee must
      complete a series of annual certification statements that include the Mortgagee’s
      review of underwriter compliance with eligibility requirements. 4. Nonprofits
      and Governmental Entities a. Program Overview (01/24/2022) FHA requires all
      nonprofits to obtain approval and be placed on the HUD Nonprofit Roster to participate
      in FHA’s Single Family nonprofit programs. Nonprofits participating in one of
      FHA’s nonprofit programs must serve Low- to Moderate- Income individuals or
      families. Low- to Moderate-Income individuals or families refer to individuals
      or families whose household income does not exceed 115 percent of the median
      income for the area when adjusted for family size. FHA may approve a higher
      percentage of up to 140 percent. A request must be submitted to the FHA Resource
      Center at answers@hud.gov. i. Types of Single Family Nonprofit Programs (A)
      HUD Homes (1) Discounted Purchase Governmental Entities and HUD-approved Nonprofits
      are permitted to purchase homes from HUD at a discount. (2) Exclusive Listing
      Period Governmental Entities and HUD-approved Nonprofits are permitted to purchase
      Properties, without a discount, during the exclusive listing period for owner
      occupant purchasers. (B) FHA Mortgagor Governmental Entities and HUD-approved
      Nonprofits are eligible for certain FHA- insured programs under the same provisions
      as owner occupants. I. DOING BUSINESS WITH FHA B. Other Participants 4. Nonprofits
      and Governmental Entities Handbook 4000.1 87 Last Revised: 11/26/2025 HUD-approved
      Nonprofits are still required to obtain credit qualification from a Mortgagee
      for each Mortgage originated, and each Mortgage must be underwritten in accordance
      with Underwriting Nonprofit Borrowers (Manual). (C) Secondary Financing Governmental
      Entities and HUD-approved Nonprofits may provide secondary financing assistance
      to homebuyers utilizing FHA insurance on a first Mortgage when that assistance
      is secured with a second Mortgage or lien. Additional information on Secondary
      Financing can be found in the Origination through Post-closing/Endorsement section.
      ii. Entities Requiring Approval to Participate in FHA Nonprofit Programs (A)
      Nonprofits with 501(c)(3) Tax-Exempt Status A nonprofit organization must have
      501(c)(3) Internal Revenue Service (IRS) tax- exempt status. When a nonprofit
      closes secondary financing in its own name, that nonprofit is required to be
      both FHA approved and placed on the HUD Nonprofit Roster even if the secondary
      financing will be held by the Governmental Entity. (B) Nonprofit Instrumentalities
      of Government (1) Definitions A Nonprofit Instrumentality of Government (NPIOG)
      refers to a 501(c)(3) organization that was established by a governmental body
      or with governmental approval or under special law to serve a particular public
      purpose or designated as an instrumentality by law (statute or court opinion).
      FHA requires the unit of government that established the nonprofit to exercise
      Organizational Control, Operational Control, or Financial Control of the nonprofit
      in its entirety or, at minimum, the specific homebuyer assistance program that
      is using FHA’s credit enhancement. Organizational Control refers to the majority
      of the governing board and/or Principal Officers that are named or approved
      by governmental body/officials. Operational Control refers to the requirement
      that the government body approves all major decisions and/or expenditures. Financial
      Control refers to the requirement that the government body provides funds through
      direct appropriations, grants, or Loans, with related controls applicable to
      all activities of the entity. I. DOING BUSINESS WITH FHA B. Other Participants
      4. Nonprofits and Governmental Entities Handbook 4000.1 88 Last Revised: 11/26/2025
      HUD-approved NPIOGs will be included on FHA’s Nonprofit Organization Roster.
      (2) Permitted Level of Secondary Financing Assistance FHA may approve an NPIOG
      to provide secondary financing for as much as 100 percent of the Borrower''s
      Minimum Required Investment (MRI). If approved, FHA will issue the NPIOG an
      approval letter, and this approval will be reflected on the FHA Nonprofit Organization
      Roster and in FHAC. Interested parties should check the Roster to ensure the
      approval status of an NPIOG. (C) Section 115 Entities with 501(c)(3) Status
      Section 115 entities with 501(c)(3) status must meet the eligibility and application
      requirements for the HUD Homes and FHA Mortgagor programs. iii. Entities Not
      Requiring FHA Approval to Participate in FHA Nonprofit Programs FHA approval
      and placement on the HUD Nonprofit Roster are not required for federal, state,
      or local government agencies or their instrumentalities, provided those entities
      are not organized as 501(c)(3) nonprofits. (A) Governmental Entities and their
      Instrumentalities of Government Governmental Entity refers to any federal, state,
      or local government agency or instrumentality. To be considered an Instrumentality
      of Government, the entity must be established by a governmental body or with
      governmental approval or under special law to serve a particular public purpose
      or designated by law (statute or court opinion). HUD deems Section 115 entities,
      as identified in Section 115 of the Internal Revenue Code, to be Instrumentalities
      of Government for the purpose of providing secondary financing. FHA does not
      maintain a list of Governmental Entity program participants. (B) Nonprofits
      with a Documented Agreement to Support Secondary Financing When a Governmental
      Entity uses a nonprofit to assist in the operation of the Governmental Entity’s
      secondary financing assistance programs, FHA approval and placement on the HUD
      Nonprofit Roster are not required so long as there is a documented agreement
      indicating (1) the functions performed include the Governmental Entity’s secondary
      financing program and (2) the secondary financing legal documents (e.g., Note
      and deed of trust) name the Governmental Entity as the Mortgagee. I. DOING BUSINESS
      WITH FHA B. Other Participants 4. Nonprofits and Governmental Entities Handbook
      4000.1 89 Last Revised: 11/26/2025 Governmental Entities that have nonprofits
      close the secondary financing in the name of the nonprofit must verify that
      the nonprofit is both FHA approved and on the HUD Nonprofit Roster. Refer to
      Prohibited Sources of Minimum Cash Investment Under the National Housing Act
      - Interpretive Rule for additional guidance and clarification on the provision
      of downpayment assistance through secondary financing. (C) Section 115 Entities
      Section 115 entities, as identified in Section 115 of the Internal Revenue Code,
      do not require approval to participate in FHA’s Nonprofit Secondary Financing
      program. Section 115 entities are not required to have voluntary board members.
      FHA considers entities that have both 501(c)(3) and Section 115 status to be
      Instrumentalities of Government for purposes of secondary financing only. iv.
      Ineligible Participants The nonprofit or any officer, partner, director, principal
      or employee must not be: • suspended, debarred, excluded from participation
      in FHA programs as listed in a Limited Denial of Participation (LDP), System
      for Award Management (SAM) Excluded Parties List, or Credit Alert Verification
      Reporting System (CAIVRS), or otherwise excluded by similar procedures of any
      other federal or state agency; • indicted for, or convicted of, an offense which
      reflects upon the responsibility, integrity, or ability of the nonprofit to
      participate in FHA activities; • subject to Unresolved Findings as a result
      of HUD or other governmental investigation, audit, or review; or • engaged in
      business practices that do not conform to generally accepted practices of prudent
      nonprofits or that demonstrate irresponsibility. These requirements apply at
      the time that the nonprofit applies for approval and at all times while it is
      a HUD-approved Nonprofit.'
  judgment: false
