It has been about a year since FHA became a major part of the mortgage market. Many mortgage companies that do not have FHA Approval are finding it difficult to survive. So what is required to get an FHA License?

There are 4 major requirements that must be met. Everything else is just paperwork. These 4 requirements are audited financials, commercial space, 3 years origination experience, and decent credit. Let's explain these items in detail.

Audited Financials

Audited Financials are usually the largest barrier for most companies. Brokers need to show $63,000 in net worth and lenders need to show $250,000. For both brokers and lenders, 20% of the total net worth must be liquid, so basically cash in the bank. Many people confuse this to mean that the owners of the company need to have this net worth. It's actually the company not the individual owners. So, often owners will invest cash, cars, investment properties into the company to show as net worth on the financial statement. The even more difficult part about this requirement is that the financial statement must be audited. If you have ever had your taxes done, you know that can be a lot of work, but for your taxes, the account does not verify every assett and liability or every income or expense. For an audited financial statement, the CPA has to verify every number on it. Most CPAs will charge $7,000 to $10,000 for this type of financial statement. Some CPAs that specialize in these types of audits have made the process very efficient and charge as little as $2,500 to $3,500, but that is still a lot of money, especially with the way the market is.

Commercial Space

Most companies work out of a commercial space, but with the market the way it is and often for convenience some companies have chosen to start working out of their homes. HUD will not allow that. There are a few exceptions if the home is commercially zoned, or if it is near a commercialy zoned area and has easy access to the public, but in most cases, a residence will not work. Another issue with the commercial space is that it has to be separate from all other companies, except for possibly a shared receptionist. A good way to determine if your office is separate is to walk from your car to your office. If you have to pass by employees in cubicles for other companies then you are not separate.

Three Years Origination Experience

One of the senior officers must have 3 years of origination experience. This requirement is usually no problem, but is worth mentioning. If your company does not have anyone working for it that has been in the mortgage origination field for over 3 years, then you can not get approved. You will either need to hire someone or check with all of your employees to see if you can make one of them a senior officer if they have the 3 years of experience.

Decent Credit

All senior officers and all owners of 25% or more of the company will need to provide their credit reports. If any of these credit reports show major derogatory items in the last two to three years, then you will have a problem getting approved. HUD uses FHA Underwriting guidelines to determine if the owners and officers of the mortgage company are financially fit. If any of these individuals have had a recent foreclosure, bankruptcy, tax liens, or numerous lates, they will need to be removed as senior officers and have their ownership reduced to below 25% before you can apply.

If you meet all of these requirements, then you should have no problem getting approved. The paperwork is difficult and I recommend getting some assistance putting it together. You will also need to find a CPA that is not too expensive, but like I said, everything else is just paperwork if you meet these 4 major requirements.



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This type of institute is either a school or a university that is typically regarded as a vocational academy. The purpose behind its operation is imparting of knowledge and expertise to the students, which proves beneficial for them in the practical world where they are required to carry out certain tasks.

Conventionally these institutions have not worked on the impartation of the general learning and knowledge but have focused more on the teaching and the development of the skills regarding preparation and guidance. The Ministry of Education and the Ministry of Interior work jointly for the provision of the respective educational services that are imparted to the personnel related to the security profession such as guards and police men.

These schools operate on the base of the criteria that has been set for them by the educational department. They require a license for operation and once they are granted this license then they are specified a location and the language is also given in the specifications.

The most fundamental prerequisite is the time duration of study that spans almost a decade. Other than that any individual of any location can apply and once the criteria of qualification are fulfilled you are awarded the status of being a student. Many a times the individual, who has applied for admission, if he does not enjoy good health, may be refused admission even if he fulfills other criteria.

Apart from that once granted admission the students enjoy free tuition and do not even have to pay for the health care programs and their meals. They are only required to pay for their books and related accessories for the provision of the tuition fee.

As for the grants they are provided to these schools regardless of their ownership. Other than that their operation for the provision of profit is prohibited.

Sarfaraz was born and raised in Karachi, Pakistan, surrounded by traffic and technology. He writes mostly about diseases, the storybooks, futuristic columns, mysteries, as he likes to call it. He enjoys writing for web.

He wrote his first book (The Black Bodyguard of Stone-Pyramid) in 2003 and since then has provided the picture for 1 more title. His book was honored as a BEST SELLER.


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