The Federal Housing Authority FHA credit policy requires mortgage lenders to submit an audited statement and meet the HUD compliance requirements. Maintaining the required documentation and fulfilling the audit requirements allows you to continue offering lending services.
Audit requirements for FHA lender’s approval
- Submit audited financial statements for the previous fiscal year’s end.
- The submitted financial statement document must cover the current operating month for FHA lenders operating for less than a year.
- Income statements and cash flow aren’t required.
- Liquid assets should not be less than 20% of the required adjusted Net Worth.
- Non-supervised institutions may derive at least 50% of their activities from real estate mortgages, consumer installments, or a similar credit advance.
- Must maintain adequate adjusted net worth per HUD requirements.
- If the financial statement audit end date is more than six months, you must submit an unaudited financial statement signed by a corporate officer.
Audit requirements for FHA lender’s recertification
- Submit a recertification application through the lender electronic assessment portal (LEAP).
- Submit recertification application within 90 days of fiscal year-end (Dec. 31st – March 31st).
- Submit a financial statement.
- Submit online certification.
- Pay recertification fees.
Check out the FHA audit checklist to complete your FHA approval.
Need Help?
Contact MetwallyCPA to conduct your financial statement audits or reviews for FHA license renewal.
Mohamed founded Metwally CPA PLLC in 2020 in the Dallas-Fort Worth metropolitan area. He holds active CPA license in the state of Texas and California. Mohamed is the firm’s Executive Director. Mohamed has a Master of Science (M.S.) degree in Accounting from University of Dallas. He has extensive assurance experience in a wide variety of industries, and he also devotes considerable time consulting and working with organizations and CPA firms on internal controls, audit quality, automation, and accounting best practices. He has over 15 years of audit experience.
Prior to founding the firm, Mohamed worked for big 4 and national firms for over than 10 years in the assurance practice. Mohamed worked on private clients as well as public clients and specialized in financial services sector.
He is a member of the Texas CPA Practice Issues, Diversity and Inclusion, and Governmental Accounting and Single Audits Conference Committees of Texas Society of CPAs.
Mohamed is a member of the American Institute of Certified Public Accountants, member of the AICPA small business group, member of the American institute of Certified Management Accountants, and Texas Society of Certified Public Accountants.
