Can a bank or credit union that is an FHA approved lender be a Sponsored Third Party Originator (TPO)?

Yes.  A Third-Party Originator (TPO) is an entity that originates FHA-insured mortgages for an FHA-approved mortgagee. A TPO may be an FHA-approved entity or a non-FHA-approved entity.

FHA allows  originations between a TPO and an unconditional Direct Endorsement (DE) mortgagee that meet the following:

1.  The TPO must originate the loan.

2.  The DE mortgagee must underwrite the loan.

3.  The loan can be funded and closed by the TPO if the TPO is an FHA approved mortgagee.

4.  The FHA approved mortgagee serving as the TPO on the loan will not be able to access the loan file in the FHA Connection (FHAC).

5.  A relationship between a TPO and an unconditional DE mortgagee must be registered by the DE mortgagee in FHAC.

For additional information see Handbook 4000.1 I.A.5.a.i(A)(1)&(3); II.A.1.a.iii.(A)(1); II.A.1.a.iii.(B)(1)(b) available at