7 CFR §3565.103

1. (a)Commitment. A lender must have a commitment for a guaranteed loan or an agreement to purchase a guaranteed loan.
2. (b)Audited statement. A lender must provide the Agency with an annual audited financial statement conducted in accordance with generally accepted government auditing standards.
3. (c)Previous participation. A lender may not be delinquent on a federal debt or have an outstanding finding of deficiency in a federal housing program.
4. (d)Ongoing requirements. A lender must meet the following requirements at initial application and on a continuing basis thereafter:
   1. (1)Overall financial strength, including capital, liquidity, and loan loss reserves, to have an acceptable level of financial soundness as determined by a lender rating service (such as Sheshunoff, Inc.); or to be an approved Fannie Mae, Freddie Mac, Ginnie Mae or HUD Federal Housing Administration multifamily lender; or, if a state housing finance agency, to have a top tier rating by a rating agency (such as Standard and Poor's Corporation);
   2. (2)Bonding and insurance to cover business related losses, including directors and officers insurance, business income loss insurance, and bonding to secure cash management operations;
   3. (3)A minimum of two years experience in originating and servicing multifamily loans;
   4. (4)A positive record of past performance when participating in RHS or other federal loan programs;
   5. (5)Adequate staffing and training to perform the program obligations; the head underwriter must have 3 years of experience and all staff must receive annual multifamily training;
   6. (6)Demonstrated overall financial stability of the business over the past five years;
   7. (7)Evidence of reasonable and prudent business practices for management of the program; and
   8. (8)No negative information on Dunn & Bradstreet or similar type report.