What are the net worth and liquidity requirements for FHA approved mortgagees?

Supervised, Nonsupervised, and Investing Mortgagees must meet the adjusted net worth and liquidity requirements at all times. The requirements do not apply to Government Mortgagees.

The adjusted net worth and liquid assets must be computed in accordance with the HUD OIG Handbook 2000.04, Consolidated Audit Guide for Audits of HUD Programs.

Single Family Programs

The Mortgagee must have a minimum adjusted net worth of $1,000,000 plus 1 percent of the total volume in excess of

$25,000,000 of FHA Single Family Mortgages originated, underwritten, serviced, and/or purchased during the prior fiscal year, up to a maximum required adjusted net worth of $2,500,000.

Multifamily Programs With Servicing

The Mortgagee must have a minimum adjusted net worth of $1,000,000 plus an additional net worth of 1 percent of the total volume in excess of $25,000,000 of FHA multifamily Mortgages originated, underwritten, purchased, and/or serviced during the prior fiscal year, up to a maximum required net worth of $2,500,000.

Multifamily Programs Without Servicing

The Mortgagee must have a minimum adjusted net worth of $1,000,000 plus an additional net worth of one-half of 1 percent of the total volume in excess of $25,000,000 of FHA multifamily Mortgages originated, underwritten, and/or purchased during the prior fiscal year, up to a maximum required net worth of $2,500,000.

Dual Participation

A Mortgagee approved to participate in both Single Family and Multifamily programs must have a minimum adjusted net worth of $1,000,000 plus an additional net worth of 1 percent of the total volume in excess of $25,000,000 of the aggregate of FHA Single Family and Multifamily Mortgages originated, underwritten, purchased, and/or serviced during the prior fiscal year, up to a maximum required net worth of $2,500,000.

Liquidity

The Mortgagee must hold no less than 20 percent of its required adjusted net worth in liquid assets.

Handbook 4000.1 I.A.3.c.vii; I.A.7.f. is available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh.