Section 1005.211 - Direct Guarantee Lender approvalHUD shall review all documents submitted by a Lender Applicant under § 1005.209 and make a determination of conditional approval or denial.
(a)Conditional approval. Conditional approval is signified by written notification from HUD that the Lender Applicant is a conditionally approved Direct Guarantee Lender under the Section 184 Program subject to the following conditions:(1) The Lender Applicant signs an agreement to comply with requirements of this part, and any applicable Tribal, Federal, or State law; and(2) If applicable, the Lender Applicant submits a list of entities it currently sponsors under another Federal Loan program and intends to sponsor in the Section 184 Program. This list shall include the following for each Sponsored Entity: (i) Contact information, including mailing address, phone number, and email address for corporate officers.(ii) The Federal tax identification number (TIN) for the Sponsored Entity, and(iii) Names and Nationwide Multistate Licensing System and Registry numbers for all Loan originators and processors.(3) The Lender Applicant certifies it monitors and provides oversight of Sponsored Entities to ensure compliance with this part, and any applicable Tribal, Federal, or State law.(4) The Lender Applicant must, for each underwriter, submit ten test endorsement case binders, or a number prescribed by Section 184 Program Guidance, which meet the requirements of subparts D and E. Unsatisfactory performance by an underwriter during HUD's test case review may constitute grounds for denial of approval to participate as a Direct Guarantee Lender. If participation is denied, such denial is effective immediately and may be appealed in accordance with the procedures set forth in § 1005.909 ; and(5) The Lender Applicant will operate only in accordance with the Lender's licensing in Section 184 Approved Program Areas.(b)Final approval. Final approval is signified by written notification from HUD that the Lender Applicant is an approved Direct Guarantee Lender under the Section 184 Program without further submission of test case endorsement case binders to HUD. HUD retains the right to request additional test cases as determined necessary.(c)Limitations on approval.(1) A Lender Applicant may only operate as a Direct Guarantee Lender in accordance with the Lender's Tribal or State licensing and within Section 184 Approved Program Areas.(2) The Lender Applicant must employ and retain an underwriter with the qualifications as provided in § 1005.209(b)(3) . Failure to comply with this provision may subject the Lender Applicant to sanctions under § 1005.907 .(d)Denial of participation. A Lender Applicant may be denied approval to become a Direct Guarantee Lender if HUD determines the Lender Applicant does not meet the qualification requirements of this subpart. HUD will provide written notification of denial and that decision may be appealed in accordance with the procedures set forth in § 1005.909 .