FHA Net Worth Easier on Mortgage Firms

The Federal Housing Administration is going easy on independent mortgage bankers as it increases its net worth requirements for larger lenders to $1 million, according to a long-awaited final rule. The final rule raises the net worth requirement from $250,000 to $1 million one year from now. For FHA-approved "small business lenders," the net worth requirement will be $500,000. Meanwhile, mortgage brokers will no longer have to go through the FHA approval process, which included an annual audit. "Mortgage brokers or other third-party originators, already approved by FHA, will be authorized to continue to originate FHA-insured loans through the end of the calendar year without sponsorship of an FHA-approved lender," HUD said. After three years, the Department of Housing and Urban Development will raise the net worth requirements again. "Approved lenders and applicants to FHA single-family programs must have a net worth of $1 million plus 1% of total loan volume in excess of $25 million."