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What Is a FHA Direct Endorsement?

what is a direct endorsement underwriter

The Direct Endorsement program helps lenders meet the demand for FHA-insured mortgages.


Congress created FHA in1934 as a means to revive the devastated post-Depression housing market. The federal government's promise to pay in the event of homeowner default gives mortgage lenders the confidence to lend to higher-risk borrowers, such as those with less-than-perfect credit. FHA has experienced rapid growth since the 2008 subprime lending collapse, according to The DE program enables FHA-approved lenders to underwrite mortgages for insurance without prior HUD review, speeding approval times.

The Basics

Under the DE program, lenders for FHA-insured loans, such as credit unions, savings and loans, mortgage companies and banks, underwrite for FHA directly, rather than the agency itself. DE privileges are granted to a lending entity as a whole, rather than to individual underwriters. It must demonstrate the ability

to review and certify mortgage documents for FHA following HUD's program policies and procedures. Lenders undergo an application process with HUD to become DE lenders.


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