How do I confirm whether the borrower is the person whose name appears on the HUD LDP List or GSA List of Excluded Parties?

The lender must check the HUD Limited Denial of Participation (LDP) list and System for Award Management (SAM) and follow appropriate procedures defined by that system to confirm eligibility for all participants involved in the transaction.

A borrower is not eligible to participate in FHA-insured mortgage transactions if they are suspended, debarred, or otherwise excluded from participating in HUD programs.

The lender must:

  •       check the HUD LDP list to confirm the borrower’s eligibility to participate in an FHA-insured mortgage transaction.
  •       check SAM and follow appropriate procedures defined by that system to confirm eligibility for participation.
  •       check the “Yes” box on form HUD-92900-LT if the borrower appears on either the LDP or SAM list.

A mortgage is not eligible for FHA insurance if anyone participating in the mortgage transaction is listed on HUD’s LDP list or in SAM as being excluded from participation in HUD transactions. This may include but is not limited to:

  •       seller (except where selling the principal residence)
  •       listing and selling real estate agent
  •        loan officer
  •        loan processor
  •       underwriter
  •       appraiser
  •       203(k) consultant

For additional information see Handbook 4000.1 II.A.1.b.ii.(B) available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh