FHA Licensing Frequently Asked Questions

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For assistance with mortgage licensing contact us at:
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ssheasby@integritymortgagelicensing.com

Information herein is for educational purpose only and is not meant to be a complete statement of all state mortgage licensing requirements. Additional State and FHA mortgage licensing requirements may be required. If you need further information, we would encourage you to contact us directly.

Most Common FHA Lender Applicant Questions

(Revised October 15, 2007)

FAQs – Differences in Approval Types

1. What is the difference between Title I and Title II lender approvals?

2. What are the differences between a mortgagee and a loan correspondent?

3. What’s the difference between a supervised and nonsupervised lender (both mortgagee and loan correspondent)?

4. What type of approval does a lender need to originate and/or underwrite and/or service Title II Single Family Loans, including HECMs (Reverse Mortgages) or 203k (Rehabilitation mortgages)?

5. Does a mortgage broker or lender need to be a FHA approved lender to originate a single family loan that is subsequently insured by FHA?

6. Can a company that operates as both a mortgage company and a real estate company be approved as a FHA lender?

FAQs – Application and Its Processing

7. What kind of FHA lender approval can I apply for?

8. What are the types of Mortgagee Approvals?

9. What are the requirements to become a FHA approved nonsupervised loan correspondent (typically mortgage brokers, aka as a FHA mini-Eagle approval)?

10. What are the requirements to become a FHA approved nonsupervised mortgagee (mortgage lender or mortgage banker)?

11. What are the requirements to become a FHA approved Supervised Mortgagee?

12. What are the requirements to become a FHA approved Supervised Loan Correspondent?

13. What types of business forms can be FHA approved as a mortgagee or loan correspondent?

14. What are the FHA requirements for an LLC to be a FHA approved lender?

15. What are FHA’s requirements concerning the use of “Doing Business As” names.

16. What are the net worth and liquidity requirements for nonsupervised loan correspondents and mortgagees?

17. What type of financial statement must be submitted with an application to become a FHA Approved Lender?

18. What are the office facilities requirements for FHA approved lenders?

19. What are the requirements related to sharing office space with another company?

20. What are the staffing requirements for a lender?

21. What are the requirements and restrictions on employees of FHA lenders?

22. What functions can a FHA approved lender contract out?

23. Can FHA Approved Lenders use non-employees as Loan Officers?

24. What is the experience requirement that must be documented in the resumes attached to an application for lender approval?

25. What credit reports are required to be submitted with a lender approval application and how are they evaluated.

26. What is a Sanctions Letter?

27. What is a Sponsor Letter?

28. What are the requirements for a lender’s funding program?

29. What the various addresses on the HUD Form 11701 used for?

30. What are the quality control plan requirements for FHA approved lenders?

31. Where do I send my lender application and the application fee?

32. What is the processing time for an application and how do I check on the Status of my application for FHA lender approval?

FAQs – Differences in Approval Types

1. What is the difference between Title I and Title II lender approvals?

Title II approved lenders can participate as a mortgagee or loan correspondent in the FHA Title II loan programs, such as 203(b), 203(k), HEMCs, Condos and Multifamily. Title I approved lenders can participate as a lender or loan correspondent in the two FHA Title I loan programs, -- the property improvement loan program (2^nd mortgages) and the manufactured housing (mobile) home program (where the home is classified as personal property).

Go to http://www.hud.gov/offices/hsg/sfh/ins/singlefamily.cfm for descriptions of the various Title II Single Family and Title I loan programs.

2. What are the differences between a mortgagee and a loan correspondent?

A mortgagee can originate, underwrite, fund, service and/or own FHA insured loans. In addition, mortgagees can obtain supplemental approval as a Direct Endorsement (DE) mortgagee and Lender Insurance (LI) mortgagee for FHA single family loans and a Mutifamily Accelerated Processing (MAP) mortgagee for FHA multifamily loans. Mortgagees are also known as Full-Eagles because they can do any lender function on a FHA loans. States typically license nonsupervised mortgagees as mortgage lenders. Some States have a correspondent lender’s license which allows a nonsupervised mortgagee to originate, underwrite and fund mortgages but not service or own them. FHA mortgagees who are banks are considered supervised mortgagees.

A loan correspondent can only originate loans that are underwritten by their sponsoring DE mortgagee. They can’t underwrite, own or service FHA insured loans. This is the only type of approval a mortgage broker can apply for. Loan correspondents are also known as Mini-Eagle because they can only originate FHA loans. They must use a DE mortgagee to sponsor them in an origination. FHA loan correspondents who are banks are considered supervised loan correspondents.

Please see paragraph 1-2 in Chapter 1 of the FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

3. What’s the difference between a supervised and nonsupervised lender (both mortgagee and loan correspondent)?

A supervised lender is a financial institution that is a member of the Federal Reserve System, or a financial institution whose accounts are insured by the Federal Deposit Insurance Corporation (FDIC), or the National Credit Union Administration (NCUA). Examples of supervised mortgagees are banks, savings associations, and credit unions.

A nonsupervised lender is a company which does not qualify as supervised lender and whose principal activity is mortgage brokering or lending. Principal activity means more than half of the company’s gross income is from their mortgage operations. Mortgage brokers apply for nonsupervised loan correspondent approval. Correspondent lenders and mortgage lenders apply for nonsupervised mortgagee approval.

4. What type of approval does a lender need to originate and/or underwrite and/or service Title II Single Family Loans, including HECMs (Reverse Mortgages) or 203k (Rehabilitation mortgages)?

Originations: Any lender approved by FHA to originate FHA Insured Title II Single Family loans can originate any type of FHA Title II Single Family Loan, including HECMs and 203Ks. They can be approved as a loan correspondent or as a mortgagee.

Underwriting: A mortgagee must obtain specific DE approval from their appropriate Single Family Homeownership Center to underwrite FHA Single Family loans and an additional approval to underwrite HECM and/or 203k loans. Loan Correspondents cannot underwrite.

Servicing: Any FHA approved mortgagee can service FHA Insured Single Family loans (including HECM and/or 203k loans) see paragraph 2-20 of paragraph 1-2 B. of HUD Handbook 4060.1, Rev-2 Only FHA approved mortgagees can be a servicer. Loan Correspondents cannot service FHA insured loans. The Title II Mortgagee Approval Handbook 4060.1, Rev-2 is at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc

The FHA Resource Center helps consumers and industry members with their questions. Its home web page is: http://www.hud.gov/offices/hsg/sfh/fharesourcectr.cfm . You can eMail the Resource Center at hud@custhelp.com or call them Monday-Friday, 8 am to 8 pm ET at (800) CALLFHA or (800) 225-5342.

5. Does a mortgage broker or lender need to be a FHA approved lender to originate a single family loan that is subsequently insured by FHA?

Yes. Only FHA approved lenders can originate a loan that is subsequently insured by FHA. The FHA loan origination process has 5 components: (1) taking a FHA loan application, (2) processing it, (3) underwriting it, (4) closing it and (5) funding the mortgage.

6. Can a company that operates as both a mortgage company and a real estate company be approved as a FHA lender?

Yes as long as the meet the “principal activity” part of the definition of a nonsupervised lender and their loan officers who plan to originate FHA loans do not have outside employment in the real estate industry.

Principal Activity: The FHA definitions of nonsupervised lenders are as follows:

Nonsupervised Mortgagee: Nondepository financial entities that have as their principal activity the origination, underwriting, funding, servicing and/or holding of real estate mortgages. They are commonly known as mortgage bankers, correspondent lenders or mortgage lenders in the industry

Nonsupervised Loan Correspondent: Nondepository financial entities that have as their principal activity the origination of real estate mortgages. They are commonly known as mortgage brokers in the industry. They must sale or transfer their FHA originations to the FHA approved mortgagee who underwrote the loan and can have multiple mortgagees that underwrite their loans. These underwriting mortgagees are referred to as “sponsors” in the FHA loan programs and are also known as DE mortgagees.

These definitions are in paragraph 1-2 in Chapter 1 of the FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc

Compliance with the principal activity requirement is determined by gross income. At least 50% of a company’s gross income comes from its mortgage business. This includes any type of mortgages. When a company is new, this calculation can’t be made, but it is made for all nonsupervised lenders as part of the FHA lender annual renewal process.

Employment Restriction

Any employee of a FHA lender who earns compensation on FHA loans cannot have other employment including self employment and outside employment in the mortgage lending, real estate, or a related field.

See paragraph 2-9 of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

FAQs – Application and Its Processing

7. What kind of FHA lender approval can I apply for?

Mortgage Brokers can only apply to be a:

Nonsupervised loan correspondent

Mortgage Lenders, Mortgage Bankers and Correspondent Lenders can apply to be a

Nonsupervised Mortgagee

Nonsupervised Loan Correspondent

Investing Mortgagee

Banks, Savings & Loans can apply to be a:

Supervised Mortgagee

Supervised Loan Correspondent

Investing Mortgagee

Local, State and Federal Agencies can apply to be a:

Government Mortgagee

Investing Mortgagee

Loan Correspondent Approval allows the lender to only originate Title II Single Family and/or Title I loans.

All Mortgagee approvals (except Investing) allow the lender to originate, underwrite, service and holds Title II Single Family, Title II Multifamily and/or Title I loans.

If you want to apply for both Title II and Title I loan programs, you will receive two FHA Lender ID numbers, one for Title II and a second for Title I

FHA Loan Programs:

Title II Single Family (203b, 203k Rehab, 234c Condo, HECM Reverse Mortgage)

Title II Multifamily (Rental Housing, Nursing Homes and Hospitals.)

Title I (Manufactured Home and Property Improvement Loans

8. What are the types of Mortgagee Approvals?

Types of Approved Mortgagees: FHA classifies approved mortgagees based on the functions they will perform, type of organization, type of supervisory agency, and net worth.

Supervised Mortgagee: Financial institutions that are members of the Federal Reserve System, and financial institutions whose accounts are insured by the Federal Deposit Insurance Corporation (FDIC), or the National Credit Union Administration (NCUA). Examples of supervised mortgagees are banks, savings associations, and credit unions. These mortgagees can originate, underwrite, fund, service and/or hold FHA insured loans.

Supervised Loan Correspondent: A mortgagee that qualifies for approval as a supervised mortgagee but only wishes to originate real estate mortgages.

Investing Mortgagee: An organization, including a charitable or not-for-profit institution or pension fund, which only wants to own FHA insured mortgages that it purchases with its own funds.

Governmental Mortgagee: A governmental agency may be approved as a mortgagee and do any of the lender functions of a FHA approved mortgagee.

Please see paragraph 1-2 in Chapter 1 of the FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc for additional details.

9. What are the requirements to become a FHA approved nonsupervised loan correspondent (typically mortgage brokers, aka as a FHA mini-Eagle approval)?

Nonsupervised Loan Correspondent (Mini-Eagle) Application Package

FHA Lender Approval Application Form 11701 that can be downloaded at: http://www.ginniemae.gov/guide/pdf/11701.pdf.

The following supplemental exhibits are required. References are to parts of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 available at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

If only applying for Title I approval, please see the Title I Lender Approval Handbook 4700.2, Title I Letters 469, 478 and 2003-01 available at http://www.hudclips.org/cgi/index.cgi. For Title I there is no liquidity requirement.

Copy of $1,000 Application Fee Check: Made payable to HUD and mailed to the HUD/FHA lockbox -- PO Box 198619, Atlanta, GA 30384. Paragraph 2-7.

Copy of LLC Articles of Organization and Operating Agreement, if applicable: Must have 2 members, minimum 10 year term and provide for succession. Paragraphs 2-2(C) and 3-3(B)

Partnership Agreement Information, if applicable: Must include names and TAX IDs of general partners, names and SSNs of managing general partner’s officers and directors, evidence that principal business activity of managing general partner meets FHA requirements and minimum of 10 year term. Paragraphs 2-2(B) and 3-3(A)

State DBA Approval, If applicable: Include copy of State certificate for use of the DBA, Fictitious or Assumed Name. Paragraphs 2-4 and 3-2(A)8

Copy of State License or Registration or documentation that applicant is exempt from State license or registration. Paragraphs 2-3 and 3‑2(A)7

Combination Sponsor/Funding Letter: A Letter from a FHA approved DE Mortgagee stating it underwrite and fund any FHA loans originated by the applicant. An applicant with its own funding program can provide evidence of a minimum of $1 million of funding and only submit a Sponsor letter. Paragraphs 3-2(A)1, 3-2(A)13

Sanctions Letter: A certification by senior officer of applicant that neither the applicant, nor any of its officers or owners have been denied licensing nor been sanctioned, suspended or debarred by any Government or Regulatory Agency. Paragraphs 2-10 & 3-2(A)14

Commercial Credit or Dun & Bradstreet Business Report on Applicant: Include explanation of all negative items. Paragraph 3-2(A)4

Resume(s): Must show that one or more of the senior officer(s) of the applicant has at least 3 years experience in the mortgage operations that the applicant wishes to participate in. Paragraph 3-2(A)5

Credit Reports on Principals: Provide Tri-Merged or Residential Mortgage Credit Reports on all officers Vice President and above and any owners with 25% or more ownership. Provide written explanations for all negative items. Paragraph 3-2(A)4

Audited Financial Report: CPA issued GAAS audit less than 12 months old with net worth calculation of at least $63,000 with a minimum of 20% liquid assets) Paragraphs2-5, 2-6 and 3-2(A)6

Office Facilities: Pictures of office facilities (internal, external and signage), a floor plan and certification that facilities meet FHA requirements. Office must be in separate commercial space. Paragraphs 2-11(A) and 3-2(A)9

Quality Control Plan: Must be plan of applicant, tailored to applicant’s duties with regard to FHA loans. Detailed requirements are in Chapter 7 but it cannot be a copy of this chapter since it explains what the Quality Control Plan must cover and is a guide. Paragraphs 7-1 through 7-12, as appropriate

Submit the application form and its required exhibits to:

Overnight: FHA

Lender Approval and Recertification Division

490 L’Enfant Plaza East, SW, Suite 3214

Washington, DC 20024

US Mail: FHA

Lender Approval and Recertification Division

451 7th Street, S.W., Room B133/P3214

Washington, DC 20410

Mail your $1,000 application fee check and its cover sheet to our lockbox in Atlanta at the address shown below. The fee cover sheet can be downloaded at http://www.hud.gov/offices/hsg/sfh/lender/titl2app.pdf. Mailing your application form and its required exhibits to the Atlanta lockbox will delay its receipt in Washington, DC by 30 days.

Dept of HUD

P.O. Box 198619

Atlanta, GA 30384

The FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2 can be downloaded at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

The processing time for a complete application is 30-45 days depending on the number of other applications in the processing pipeline.

10. What are the requirements to become a FHA approved nonsupervised mortgagee (mortgage lender or mortgage banker)?

Nonsupervised Mortgagee (Full-Eagle) Application Package

FHA Lender Approval Application Form 11701 that can be downloaded at: http://www.ginniemae.gov/guide/pdf/11701.pdf.

Copy of $1,000 Application Fee Check: Made payable to HUD and mailed to the HUD/FHA lockbox -- PO Box 198619, Atlanta, GA 30384. Paragraph 2-7.

Copy of LLC Articles of Organization and Operating Agreement, if applicable: Must have 2 members, minimum 10 year term and provide for succession. Paragraphs 2-2(C) and 3-3(B)

State DBA Approval, If applicable: Include copy of State certificate for use of the DBA, Fictitious or Assumed Name. Paragraphs 2-4 and 3-2(A)8

Copy of State License or Registration or documentation that applicant is exempt from State license or registration. Paragraphs 2-3 and 3‑2(A)7

Copy of Fidelity Bond : $300,000 minimum covering applicant’s employees and agents. HUD does not have to be the beneficiary. Paragraph 3-2(A)10

Copy of Errors & Omissions Insurance: $300,000 minimum covering applicant’s employees and agents. HUD does not have to be the beneficiary. Paragraph 3-2(A)11

Funding Program: Provide evidence of a minimum of $1 million of funding (a letter of credit is acceptable). Paragraphs 3-2(A)13a

Commercial Credit or Dun & Bradstreet Business Report on Applicant: Include explanation of all negative items. Paragraph 3-2(A)4

Audited Financial Report: CPA issued GAAS audit less than 12 months old with net worth calculation of at least $250,000 with a minimum of 20% liquid assets) Paragraphs 2-5, 2-6 and 3-2(A)6

Submit the application form and its required exhibits to:

Overnight: FHA

Lender Approval and Recertification Division

490 L’Enfant Plaza East, SW, Suite 3214

Washington, DC 20024

US Mail: FHA

Lender Approval and Recertification Division

451 7th Street, S.W., Room B133/P3214

Washington, DC 20410

Dept of HUD

P.O. Box 198619

Atlanta, GA 30384

See FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

The processing time for a complete application is 30-45 days depending on the number of other applications in the processing pipeline.

11. What are the requirements to become a FHA approved Supervised Mortgagee?

Supervised Mortgagee Application Package

FHA Lender Approval Application Form 11701 that can be downloaded at: http://www.ginniemae.gov/guide/pdf/11701.pdf.

Copy of $1,000 Application Fee Check: Made payable to HUD and mailed to the HUD/FHA lockbox -- PO Box 198619, Atlanta, GA 30384. Paragraph 2-7.

State DBA Approval, If applicable (include copy of State certificate for use of the DBA, Fictitious or Assumed Name) Paragraphs 2-4 and 3-2(A)8

Copy of Fidelity Bond: $300,000 minimum covering applicant’s employees and agents. HUD does not have to be the beneficiary. Paragraph 3-2(A)10

Copy of Errors & Omissions Insurance: $300,000 minimum covering applicant’s employees and agents. HUD does not have to be the beneficiary. Paragraph 3-2(A)11

Submit the application form and its required exhibits to:

Overnight: FHA

Lender Approval and Recertification Division

490 L’Enfant Plaza East, SW, Suite 3214

Washington, DC 20024

US Mail: FHA

Lender Approval and Recertification Division

451 7th Street, S.W., Room B133/P3214

Washington, DC 20410

Dept of HUD

P.O. Box 198619

Atlanta, GA 30384

The FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2 can be downloaded at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

The processing time for a complete application is 30-45 days depending on the number of other applications in the processing pipeline.

12. What are the requirements to become a FHA approved Supervised Loan Correspondent?

Supervised Loan Corrrespondent Application Package

FHA Lender Approval Application Form 11701 that can be downloaded at: http://www.ginniemae.gov/guide/pdf/11701.pdf.

If only applying for Title I approval, please see the Title I Lender Approval Handbook 4700.2, Title I Letters 469, 478 and 2003-01 available at http://www.hudclips.org/cgi/index.cgi

Copy of $1,000 Application Fee Check: Made payable to HUD and mailed to the HUD/FHA lockbox -- PO Box 198619, Atlanta, GA 30384. Paragraph 2-7.

Sponsor Letter: A Letter from a FHA approved DE Mortgagee stating it underwrite any FHA loans originated by the applicant. Paragraphs 3-2(A)1

State DBA Approval, if applicable: Include copy of State certificate for use of the DBA, Fictitious or Assumed Name. Paragraphs 2-4 and 3-2(A)8

Submit the application form and its required exhibits to:

Overnight: FHA

Lender Approval and Recertification Division

490 L’Enfant Plaza East, SW, Suite 3214

Washington, DC 20024

US Mail: FHA

Lender Approval and Recertification Division

451 7th Street, S.W., Room B133/P3214

Washington, DC 20410

Dept of HUD

P.O. Box 198619

Atlanta, GA 30384

The FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2 can be downloaded at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

13. What types of business forms can be FHA approved as a mortgagee or loan correspondent?

A mortgagee seeking approval must be a corporation, partnership, or other chartered institution, and must be a permanent organization having succession. A sole proprietorship or trust is not an acceptable business form for approval as a FHA mortgagee.

See paragraph 2-1 in Chapter 2 of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc for additional details.

14 What are the FHA requirements for an LLC to be a FHA approved lender?

The LLC's Articles of Organization and/or Operating Agreement must:

· Specify that the LLC consist of two or more members. A single member LLC is acceptable only if the member is a corporation consisting of two or more persons;

· Specify a minimum term of existence of at least ten years;

· Provide for succession;

· Authorize continuance in the event of the withdrawal or death of a member; and

· Specify that the LLC will not terminate until all FHA-insured mortgages have been transferred to another approved mortgagee.

See paragraph 2-2.C in Chapter 2 of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc for additional details.

15 What are FHA’s requirements concerning the use of “Doing Business As” names.

When applying to be approved, all applicants must submit documentation that they have State approval for both their legal name and any “doing business as” name they use.

See paragraph 2-4 in Chapter 2 of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 at:

http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

Once a lender is approved, lenders can add DBAs to their institutional profile via the FHA Connection. This helps us locate a company when we get an inquiry that uses the company's DBA vs. legal name. Although a mortgagee may have more than one “dba,” each home or branch office is limited to one “dba” identity for FHA purposes. The lender must have State approval to use a DBA name before it updates its profile via FHA Connection.

See paragraph 6-9 in Chapter 6 of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 at:

http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc.

16 What are the net worth and liquidity requirements for nonsupervised loan correspondents and mortgagees?

Nonsupervised Loan correspondents (also known as mortgage brokers in the industry) must have a minimum adjusted net worth of $63,000, with at least 20% being liquid assets. They also must have an additional $25,000 of adjusted net worth for each branch (both traditional and non-traditional) they wish to register with FHA up to a maximum adjusted net worth of $250,000 that includes the initial $63,000.

The requirements for nonsupervised mortgagees (also known as mortgage lenders in the industry) are higher. They must have a minimum adjusted net worth of $250,000, with at least 20% being liquid assets to be initially approved. To recertify (renew) their FHA approval each year, they are required to maintain an adjusted net worth of one percent of the volume of insured mortgages the mortgagee originated, purchased, or serviced, but not less than $250,000, up to a maximum of $1,000,000.

Adjusted net worth must be determined in accordance with chapter 7 of the most recent version of the HUD IG Handbook 2000.04 Consolidated Audit Guide for Audits of HUD Programs at: http://www.hud.gov/offices/oig/reports/auditguide, and be audited by the CPA. See paragraph 7-6(B) of above referenced handbook for information on unacceptable assets for this calculation.

See paragraphs 2-5 and 2-6 in Chapter 2 of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 at: http://hudclips.org/sub_nonhud/cgi/pdfforms/40601HB.doc for additional details.

17 What type of financial statement must be submitted with an application to become a FHA Approved Lender?

The applicant must submit its most current CPA prepared audited financial statements for the period ended not more than 12 months prior to submission of the application. The financial statements must be supplemented by a computation of Adjusted net worth must be determined in accordance with chapter 7 of the most recent version of the HUD IG Handbook 2000.04 Consolidated Audit Guide for Audits of HUD Programs at: http://www.hud.gov/offices/oig/reports/auditguide, and be audited by the CPA. See paragraph 7-6(B) of above referenced handbook for information on unacceptable assets for this calculation.

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