| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #7556 | Closed | public | FHA Lender |
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My understanding of the net worth requirement (and as indicated in the samples in the attachments to Chapter 7) is that the calculation of the additional net worth over the $1mm is based upon the principal amount FHA originations, purchases, etc in the current year being audited (in other words, 2016 originations, to calculate the net worth requirement for 2016). However, a client has pointed out that the language in Section G of Chapter 7 specifies volume of originations, etc during the PRIOR fiscal year. Is that language just referring to the fact that we are now auditing the prior fiscal year, or should we be using 2015 originations to determine the 2016 net worth requirement? |
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From Mike Olsen: The net worth computation is based on the year being audited. In this case, when they say prior year, they are assuming that the current date is sometime in 2017 and you are auditing 2016, the prior year. |