2.3 Lender Standards

A. A MAP Lender must demonstrate that it is an FHA-approved mortgagee pursuant to 24 CFR Part 202, that it is financially sound, it has on-staff principal employees with the necessary multifamily underwriting experience required by this Guide and its record with FHA-insured or conventional multifamily loans has been satisfactory. Further requirements are as follows:

1. A Lender must be an FHA mortgagee as a result of its approval by the Office of Lender Activities and Program Compliance, Lender Approval and Recertification Division.

2. The Lender must not be subject to judgments, administrative claims, litigation or current lawsuits that would seriously affect its ability to do business; the Lender may not unlawfully discriminate. The Lender must be, and must remain, continuously in compliance with 24 CFR 200.30, 24 CFR part 5 and 24 CFR part 200, subparts I, J, and M, regarding nondiscrimination and equal opportunity, and it may not have outstanding violations under said authorities unless it is under an agreement or order to come into compliance. The Lender must identify staff persons with the level of training and experience required pursuant to Section 2.10. Multifamily underwriting experience on staff is a key to MAP approval and the Lender’s Underwriters must have worked regularly in the multifamily lending business and have underwritten the required number of loans which have been funded.

3. The Lender’s application must identify experienced staff who have the authority to underwrite loan applications and sign the narrative summary in a loan application. The applicant must also identify whose signatures may bind the Lender for its responsibilities under MAP.

4. FHA multifamily experience is not specifically required for initial approval as a MAP Lender, but if the Lender lacks FHA experience, additional emphasis will be placed on recent comparable conventional multifamily permanent and construction lending experience that is consistent with MAP lending. For any loan processed under MAP, the Lender must thoroughly understand MAP program requirements.

5. A Lender may be rejected for MAP qualification due to a recent history of early defaults, foreclosures or assignments of FHA-insured, or defaults or foreclosures of non-FHA insured, loans. The reason for any assignments, defaults or foreclosures will be evaluated by COB, including whether it was due to inadequate servicing or poor-quality underwriting. COB will review any loan the applicant has underwritten and endorsed within the previous five years that has defaulted and been assigned to HUD to determine whether the Lender was at fault in its origination and underwriting of the defaulted loan and if there has been a pattern of poor Lender performance.

6. If the Lender has worked with HUD’s Offices in the previous two years, COB will contact those offices to ascertain their experience with the applicant and their responses will be included in the Lender’s file. A pattern of unsatisfactory applications at one or more HUD Offices may be grounds for rejection of the Lender’s MAP application.

MAP Guide, March 2021 Go to beginning of Chapter 2

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Chapter 2 Lender Qualifications and Practices 2.4 Loan Consultants, Correspondents, or Mortgage Brokers

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