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Secondary Financing

HUD has long recognized the importance of secondary financing programs in providing affordable housing opportunities. There are three types of secondary financing assistance providers.

1. Nonprofit and Nonprofit Instrumentality of Government Secondary Financing Programs

Nonprofits and nonprofit instrumentalities of government that provide secondary financing assistance in the form of a second lien in conjunction with an FHA first mortgage must be approved by HUD.  HUD maintains a roster of approved Nonprofits and Nonprofit Instrumentality of Government secondary financing providers at

2. Government Entity Secondary Financing Programs

HUD approval is not required for Government Entities (Government Agencies and Instrumentalities of Government that are not also Nonprofits) providing secondary financing in conjunction with an FHA first mortgage.  HUD does not maintain a list of Government Entity secondary financing providers.  Lenders are responsible for assuring that a Government Entity secondary financing program meets all FHA requirements. Some Nonprofits that assist a government entity with their secondary financing program may not be required to obtain approval and placement on the Roster.  This is dependent on how the Nonprofit is named on the secondary financing documents.  For additional information please see HUD Handbook 4000.1

3. Gift Programs

HUD does not approve secondary financing assistance programs in the form of gifts administered by nonprofits and other charitable organizations. Lenders are responsible for assuring that the gift to the homebuyer meets FHA requirements.
    For more information, contact the FHA Resource Center.

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