On December 15, 2022, the FHA issued Mortgagee Letter 2022-22 (the “Mortgagee Letter”) amending FHA’s policies with respect to dual employment and conflicts of interest. Most notably, the Mortgagee Letter outlines changes to the Single Family Housing Policy Handbook 4000.1 (the “HUD Handbook”) that will permit loan originators of FHA lenders to have dual employment, including working as a real estate agent or broker. It also imposes an expanded conflict of interest policy on those employees that have a direct impact on the mortgage approval decision.


Background. Before the Mortgagee Letter, an FHA lender’s employees were only permitted to work exclusively for the lender unless they determined that the employment did not create a prohibited conflict of interest. In addition, employees were prohibited from having multiple sources of compensation, directly or indirectly, from a single FHA-insured transaction. Consequently, most FHA-approved lenders would not permit loan originators to serve as a real estate agent and originator on the same FHA loan, and conservative lenders took the position that loan originators could not serve as a real estate agent on any transaction.


Full Memorandum