HUD Issues Published Final Rule

The Department of Housing and Urban Development Tuesday morning published its final rule that sets higher net worth requirements for Federal Housing Administration-approved lenders. Starting May 20, 2011, most FHA-approved lenders must have a minimum net worth of $1 million, four-times the current requirement of $250,000. Non-supervised FHA-approved lenders that qualify as small businesses have to meet a $500,000 net worth standard. HUD estimates there are 260 small-business non-supervised approved lenders with net worth less than $500,000. In three years, HUD plans to raise the net worth requirements again. Beginning May 20, 2013, "approved lenders and applicants to FHA single-family program must have a net worth of $1 million plus 1% of total loan volume in excess of $25 million," the final rule says. HUD capped the maximum worth requirement at $2.5 million. The department originally proposed a $2.5 million net worth for all FHA-approved lenders.