To obtain Lender Insurance (LI) authority the lender must:
be an FHA-approved lender with Unconditional Direct Endorsement (DE) authority; and
have an LI Compare Ratio that is at or below 150 percent.
The LI Compare Ratio is the percentage of mortgages underwritten by the lender that are in claim or default status compared with the percentage of mortgages in claim or default status for all lenders operating in the same state(s) with an amortization commencement date within the preceding 24 months.
If the lender lacks an LI compare ratio, an exception may be made for new lenders created by merger, acquisition, or reorganization resulting in a new FHA lender ID number. See Handbook 4000.1 I.A.5.b.ii.(A)(1) for the eligibility criteria.
The Lender Insurance Program web page is available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh.