FHA Single Family Housing Policy Handbook 4000.1, V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE > E. Enforcement > 5. Actions and Sanctions Against Individuals and Other Program Participants — e. Specific Program Participants
What moves on this page
Recently changed. 1 section here was revised on 2025-12-23: e. Specific Program Participants . A model trained before then holds the old wording.
HUD Handbook 4000.1 section "Specific Program Participants". Gap-fill (verbatim, title-diff).
Verbatim regulatory text
Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE > E. Enforcement > 5. Actions and Sanctions Against Individuals and Other Program Participants — e. Specific Program Participants — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
HUD Handbook 4000.1 — Specific Program Participants
e. Specific Program Participants (09/30/2016) The following are actions and sanctions available for use in connection with the specific program participant listed. i. Appraisers (A) Notice of Deficiency (1) Standard A Notice of Deficiency (NOD) refers to a formal notification from FHA to an Appraiser when a review identifies an error or lack of compliance. An NOD is not a sanction and is not considered severe enough to require remedial education or removal. An NOD is noted on the Appraiser’s record and multiple NODs may result in further action by FHA. (2) Cause An Appraiser may receive an NOD if an FHA review has determined gaps in due diligence and professionalism or errors or noncompliance. (3) Notice FHA will provide the Appraiser with written notice outlining deficiencies found in a specific appraisal. (4) Appeal An NOD is not a sanction and no appeal is available. (B) Remedial Education (1) Standard FHA may require an Appraiser to take remedial education on appraisal-related topics for failure to comply with the requirements outlined in this Handbook 4000.1.
HUD Handbook 4000.1 — Specific Program Participants
V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE E. Enforcement 5. Actions and Sanctions Against Individuals and Other Program Participants iv.
HUD Handbook 4000.1 — Specific Program Participants
6 sections · 15,993 characters of verbatim text. Open a section to read it, or . Every section below is in the page source whether open or closed.
§e. Specific Program Participants (12/23/2025)182 ch
e. Specific Program Participants (12/23/2025) The following are actions and sanctions available for use in connection with the specific program participant listed. i. Appraisers
ANotice of Deficiency721 ch
(A) Notice of Deficiency (1) Standard A Notice of Deficiency (NOD) refers to a formal notification from FHA to an Appraiser when a review identifies an error or lack of compliance. An NOD is not a sanction and is not considered severe enough to require remedial education or removal. An NOD is noted on the Appraiser’s record and multiple NODs may result in further action by FHA. (2) Cause An Appraiser may receive an NOD if an FHA review has determined gaps in due diligence and professionalism or errors or noncompliance. (3) Notice FHA will provide the Appraiser with written notice outlining deficiencies found in a specific appraisal. (4) Appeal An NOD is not a sanction and no appeal is available.
BRemedial Education1,079 ch
(B) Remedial Education (1) Standard FHA may require an Appraiser to take remedial education on appraisal-related topics for failure to comply with the requirements outlined in this Handbook 4000.1. The Appraiser must complete remedial education within 60 Days of the date of notification and provide proof of successful completion. Failure to comply with a remedial education action may result in escalation of the FHA Appraiser Roster action to an administrative removal sanction with ineligible status due to discipline until the conditions of the original action have been satisfied. (2) Cause Cause for remedial education includes, but is not limited to, identification of more serious deficiencies in the appraisal report that indicate lack of competence, including incomplete data collection or support for analysis and conclusions. (3) Notice FHA will provide the Appraiser with written notice of the required remedial education that identifies the ground for the requirement. (4) Appeal Remedial education is not a sanction and no appeal is available.
CRemoval12,589 ch
(C) Removal13 ch
(C) Removal
1Definition112 ch
(1) Definition Removal refers to an Appraiser being placed in ineligible status on the FHA Appraiser Roster.
2Standard1,293 ch
(2) Standard The Appraiser will be ineligible to conduct appraisals for all FHA purposes from the date the sanction was imposed until the Appraiser satisfies the conditions of the removal and is reinstated to good standing on the FHA Appraiser Roster. FHA may remove an Appraiser’s eligibility from the FHA Appraiser Roster for failure to comply with the requirements outlined in this Handbook 4000.1. The Appraiser may be required to take remedial education in addition to the removal. The expiration of a state-issued credential may affect eligibility within the state of the credential and FHA will suspend the Appraiser’s state credential eligibility in FHAC. However, the suspension for an expired credential is not a removal sanction; the Appraiser will be eligible to conduct appraisals in any other state in which the Appraiser has a valid credential on the FHA Appraiser Roster. See Renewal and Maintenance and FHA Connection (FHAC) for applicable eligibility guidance. FHA will notify the state licensing or certification agency in writing when an Appraiser has received a final notice of removal from the FHA Appraiser Roster. HUD will refer Appraisers to these boards if HUD considers the actions to be of such magnitude or frequency as to warrant such referral.
3Causes1,073 ch
(3) Causes Causes for removal include, but are not limited to, any of the following: • significant deficiencies in appraisals, including noncompliance with Civil Rights requirements regarding appraisals; • losing standing as a state-certified Appraiser due to disciplinary action in any state in which the Appraiser is certified; • prosecution for committing, attempting to commit, or conspiring to commit fraud, misrepresentation, or any other offense that may reflect on the Appraiser’s character or integrity; • failure to perform appraisal functions in accordance with instructions and standards issued by HUD; • failure to comply with any agreement made between the Appraiser and HUD or with any certification made by the Appraiser; • issuance of a final debarment, suspension, or limited denial of participation; • failure to maintain eligibility requirements for placement on the Appraiser Roster as set forth under this subpart or any other instructions or standards issued by HUD; or • failure to comply with HUD-imposed education requirements.
4Notice810 ch
(4) Notice An Appraiser that is debarred, suspended, subject to a limited denial of participation, has lost standing as a state-certified Appraiser due to disciplinary action, or has failed to comply with HUD-imposed education requirements will be administratively removed from FHA Appraiser Roster eligibility and notified of the removal. An appraiser that has lost standing as a state-certified Appraiser due to expiration of the state-issued certification will be suspended from FHA Appraiser Roster eligibility in the jurisdiction in which the certification elapsed and notified of the suspension. In all other cases, the Appraiser will be given written notice of the proposed removal, and the notice will include the reasons for the proposed removal and the duration of the proposed removal.
5Appeal1,272 ch
(5) Appeal The Appraiser will have 20 Days from the date of the notice of proposed removal to submit a written response appealing the proposed removal and to request a conference. A request for a conference must be in writing and must be submitted along with a written response. Within 30 Days of FHA’s receipt of the Appraiser’s written response, or if the Appraiser has requested a conference, within 30 Days after the completion of the conference, an FHA official, designated by the Secretary, will review the appeal and send a final decision either affirming, modifying, or canceling the proposed removal from the Appraiser Roster. FHA may extend this time upon giving notice. The FHA official designated by the Secretary to review the appeal will not be someone involved in FHA’s initial removal decision, nor will it be someone who reports to a person involved in that initial decision. If the Appraiser does not submit a written response, the removal will be effective 20 Days after the date of FHA’s initial removal notice. If the Appraiser submits a written response, and the removal decision is affirmed or modified, the removal or modification will be effective on the date of FHA’s notice affirming or modifying the initial removal decision.
6Duration8,016 ch
(6) Duration384 ch
(6) Duration Removal of eligibility from the FHA Appraiser Roster may be for a period of up to 12 months. When a removal is the result of expiration or a disciplinary action by the licensing state, removal of eligibility from the FHA Appraiser Roster will remain in effect until the appraiser’s credentials are reinstated by the issuing state. ii. 203(k) Consultants Removal
AStandard136 ch
(A) Standard FHA may remove a Consultant from the Roster for any cause that HUD determines to be detrimental to HUD or its programs.
BCause948 ch
(B) Cause Cause for removal includes: • poor performance on a HUD QC review; • failure to comply with applicable regulations or other written instructions or standards issued by HUD; • failure to comply with applicable civil rights requirements; • misrepresentation or fraudulent statements; • failure to retain standing as a state-licensed architect or state-licensed engineer (unless the Consultant can demonstrate the required three years of experience as a home inspector or remodeling contractor); • failure to retain standing as a state-licensed home inspector, if the Consultant is located in a state that requires such licensing; or • failure to respond within a reasonable time to HUD inquiries or requests for documentation. A 203(k) Consultant who is debarred or suspended, subject to a Limited Denial of Participation (LDP), or otherwise ineligible to participate in an FHA transaction will be removed from the Roster.
CNotice6,548 ch
(C) Notice HUD will give the Consultant written notice of the proposed removal with reasons for the proposed removal and instructions for appeal or reinstatement. iii. Nonprofits and Governmental Entities (A) HUD Homes – Excess Profits FHA limits the costs that are eligible to be included in the NDC calculation and prohibits the nonprofit organization or Governmental Entity from reselling the repaired or improved properties at prices in excess of 110 percent of the allowed NDCs. If the Governmental Entity’s or HUD-approved Nonprofit’s resale price of the HUD Home exceeds 110 percent of the NDCs, or if non-allowable items that are included in the NDCs result in an excessive sales price, the HUD-approved Governmental Entity or Nonprofit must use the excess profit to pay down the existing Mortgage associated with that particular resale. (B) Removal from Roster (1) Standard FHA may remove a nonprofit from the list of HUD-approved nonprofit agencies for any cause that HUD determines to be detrimental to FHA or any of its programs. Nonprofit agencies removed from the approved list must re-apply to HUD in accordance with instructions contained in Nonprofit and Governmental Entities Application and Approval Process. (2) Cause Cause for removal includes, but is not limited to, any of the following: • failure to comply with applicable Single Family regulations in this Handbook 4000.1 or other written instructions or standards issued by HUD; • failure to comply with applicable civil rights requirements; • holding a significant number of FHA-insured Mortgages that are in Default, foreclosure, or claim status (in determining the number considered “significant,” HUD may compare the number of insured Mortgages held by the nonprofit organization against the similar holdings of other nonprofit organizations); • debarment, suspension, being subject to a Limited Denial of Participation (LDP) or otherwise sanctioned by HUD; • failure to further all objectives described in the Affordable Housing Program Plan (AHPP); • misrepresentation or fraudulent statements; or • failure to respond to FHA inquiries, including recertification requests or other requests for further documentation, within 30 Days. (3) Notice and Appeal A nonprofit organization that is debarred or suspended, or subject to an LDP, will be automatically removed from the HUD Nonprofit Roster. In all other cases, the following procedures for removal apply: • HUD will give the nonprofit organization written notice of the proposed removal. The notice will include the reasons for the proposed removal and the duration of the proposed removal. • The nonprofit organization will have 20 Days from the date of the notice (or longer, if provided in the notice) to submit a written response appealing the proposed removal and request a conference. A request for a conference must be in writing and must be submitted along with the written response. • A HUD official will review the appeal and provide an informal conference if requested. The HUD official will send a response affirming, modifying, or canceling the removal. The HUD official will not have been involved in HUD’s initial removal decision. HUD will respond with a decision within 30 Days of receiving the response, or, if the nonprofit organization has requested a conference, within 30 Days after the completion of the conference. HUD may extend the 30-Day period by providing written notice to the nonprofit organization. • If the nonprofit organization does not submit a timely written response, the removal will be effective 20 Days after the date of HUD’s initial removal notice (or after a longer period provided in the notice). If a written response is submitted, and the initial removal decision is affirmed or modified, the removal will be effective on the date of HUD’s notice affirming or modifying the initial removal decision. iv. Real Estate Brokers (A) Removal for Good Cause HUD may rescind real estate brokers’ HUD registration and prohibit those brokers from participating in the sale of HUD REO Properties for good cause. Good cause includes, but is not limited to: • conviction under 18 U.S.C. 371 or 1010 of a broker or by an agent supervised by that broker and acting within the scope of their duties; and • any of the following actions by a broker or an agent supervised by that broker and acting within the scope of their duties: o falsifying mortgage documents or aiding or abetting others in the use of false or misleading information including, but not limited to, forged or fraudulent gift letters and owner-occupant certifications; o acting in concert with an Appraiser to arrive at an artificial appraised value; o engaging in fraudulent activities that have led to Default and payment of an insurance claim; o failing to comply with earnest money collection, management, and disbursement procedures; o failing to maintain a current state license; o violating the Real Estate Settlement Procedures Act (RESPA); o failing to comply with civil rights requirements, including the Fair Housing Act and ECOA, in any real estate related transaction; o involvement in, or knowledge of, any fraudulent activity by any person involved in the HUD REO sales transaction; and o any other actions or omissions that evidence a lack of business integrity or noncompliance with the laws, regulations, and rules applicable to housing, lending, or real estate sales. Good cause, as identified above, includes apparent criminal activity. If and when apparent criminal activity is identified, it must be immediately reported to HUD’s Office of Inspector General (OIG). (B) Notice to Real Estate Broker Once HUD makes an initial Finding that there is good cause to remove a real estate broker, HUD will provide the real estate broker with written notice of the proposed suspension or termination of the NAID and deactivation of the broker’s access to HUD’s systems used for HUD REO sales. The notice will: • state the reasons that HUD is taking the action; • identify the violations or deficiencies involved; • provide a citation to the relevant regulation, statute, or policy; and • state the effective date and duration of the suspension or termination. (C) Effective Date of Removal The real estate broker’s suspension, termination, and/or deactivation is effective 30 Days from the date of HUD’s written notice, unless the broker submits a written response or requests a conference.
DReal Estate Broker Response and Conference677 ch
(D) Real Estate Broker Response and Conference Within 20 Days after the date of the notice or within such time provided in the notice, the real estate broker may submit a written response to HUD opposing the proposed removal and may request a conference. The real estate broker must submit a request for a conference in writing and must submit this request with the written response. HUD will delay suspension, termination, and/or deactivation until it makes a final determination on the real estate broker’s response and conference. HUD will notify the real estate broker in writing of its decision; the written decision by HUD shall constitute final agency action.
EEffect of Removal Proceedings on Bids745 ch
(E) Effect of Removal Proceedings on Bids HUD will honor all bids submitted and commissions earned by the real estate broker before removal, unless HUD determines that the bids or commissions were made under fraudulent circumstances. v. Closing Agents HUD reserves the right to sanction or remove any Closing Agent that does not abide by HUD’s closing instructions and requirements. vi. Additional Other Participants RESERVED FOR FUTURE USE This section is reserved for future use, and until such time, FHA-approved Mortgagees and Other Program Participants must continue to comply with all applicable law and existing Handbooks, Mortgagee Letters, Notices and outstanding guidance applicable to their participation in FHA programs.
HUD Handbook 4000.1 — Specific Program Participants
V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE E. Enforcement 5. Actions and Sanctions Against Individuals and Other Program Participants iv.
HUD Handbook 4000.1 — Specific Program Participants
1754 Last Revised: 11/26/2025 • issuance of a final debarment, suspension, or limited denial of participation; • failure to maintain eligibility requirements for placement on the Appraiser Roster as set forth under this subpart or any other instructions or standards issued by HUD; or • failure to comply with HUD-imposed education requirements. (3) Notice An Appraiser that is debarred, suspended, subject to a limited denial of participation or has lost standing as a state-certified Appraiser due to disciplinary action or expiration of a state certification, will be automatically removed from the FHA Appraiser Roster and notified of the removal. In all other cases, the Appraiser will be given written notice of the proposed removal, and the notice will include the reasons for the proposed removal and the duration of the proposed removal. (4) Appeal The Appraiser will have 20 Days from the date of the notice of removal to submit a written response appealing the proposed removal and to request a conference. A request for a conference must be in writing and must be submitted along with a written response. Within 30 Days of FHA’s receipt of the Appraiser’s written response, or if the Appraiser has requested a conference, within 30 Days after the completion of the conference, an FHA official, designated by the Secretary, will review the appeal and will send a final decision either affirming, modifying, or canceling the removal from the Appraiser Roster. FHA may extend this time upon giving notice. The FHA official designated by the Secretary to review the appeal will not be someone involved in FHA’s initial removal decision nor will it be someone who reports to a person involved in that initial decision. If the Appraiser does not submit a written response, the removal will be effective 20 Days after the date of FHA’s initial removal notice. If the Appraiser submits a written response, and the removal decision is affirmed or modified, the removal or modification will be effective on the date of FHA’s notice affirming or modifying the initial removal decision. (5) Duration Removal from the FHA Appraiser Roster may be for a period of up to 12 months. If removal is the result of expiration or a disciplinary action by the licensing state, removal from the FHA Appraiser Roster will remain in effect until the appraisal credentials are reinstated by the issuing state.
HUD Handbook 4000.1 — Specific Program Participants
V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE E. Enforcement 5. Actions and Sanctions Against Individuals and Other Program Participants iv.
HUD Handbook 4000.1 — Specific Program Participants
1755 Last Revised: 11/26/2025 ii. 203(k) Consultants Removal (A) Standard FHA may remove a Consultant from the Roster for any cause that HUD determines to be detrimental to HUD or its programs. (B) Cause Cause for removal includes: • poor performance on a HUD QC review; • failure to comply with applicable regulations or other written instructions or standards issued by HUD; • failure to comply with applicable civil rights requirements; • misrepresentation or fraudulent statements; • failure to retain standing as a state-licensed architect or state-licensed engineer (unless the Consultant can demonstrate the required three years of experience as a home inspector or remodeling contractor); • failure to retain standing as a state-licensed home inspector, if the Consultant is located in a state that requires such licensing; or • failure to respond within a reasonable time to HUD inquiries or requests for documentation. A 203(k) Consultant who is debarred or suspended, subject to a Limited Denial of Participation (LDP), or otherwise ineligible to participate in an FHA transaction will be removed from the Roster. (C) Notice HUD will give the Consultant written notice of the proposed removal with reasons for the proposed removal and instructions for appeal or reinstatement. iii. Nonprofits and Governmental Entities (A) HUD Homes – Excess Profits FHA limits the costs that are eligible to be included in the NDC calculation and prohibits the nonprofit organization or Governmental Entity from reselling the repaired or improved properties at prices in excess of 110 percent of the allowed NDCs. If the Governmental Entity’s or HUD-approved Nonprofit’s resale price of the HUD Home exceeds 110 percent of the NDCs, or if non-allowable items that are included in the NDCs result in an excessive sales price, the HUD-approved Governmental V.
HUD Handbook 4000.1 — Specific Program Participants
V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE E. Enforcement 5. Actions and Sanctions Against Individuals and Other Program Participants iv.
HUD Handbook 4000.1 — Specific Program Participants
1756 Last Revised: 11/26/2025 Entity or Nonprofit must use the excess profit to pay down the existing Mortgage associated with that particular resale. (B) Removal from Roster (1) Standard FHA may remove a nonprofit from the list of HUD-approved nonprofit agencies for any cause that HUD determines to be detrimental to FHA or any of its programs. Nonprofit agencies removed from the approved list must re-apply to HUD in accordance with instructions contained in Nonprofit and Governmental Entities Application and Approval Process. (2) Cause Cause for removal includes, but is not limited to, any of the following: • failure to comply with applicable Single Family regulations in this Handbook 4000.1 or other written instructions or standards issued by HUD; • failure to comply with applicable civil rights requirements; • holding a significant number of FHA-insured Mortgages that are in Default, foreclosure, or claim status (in determining the number considered “significant,” HUD may compare the number of insured Mortgages held by the nonprofit organization against the similar holdings of other nonprofit organizations); • debarment, suspension, being subject to a Limited Denial of Participation (LDP) or otherwise sanctioned by HUD; • failure to further all objectives described in the Affordable Housing Program Plan (AHPP); • misrepresentation or fraudulent statements; or • failure to respond to FHA inquiries, including recertification requests or other requests for further documentation, within 30 Days. (3) Notice and Appeal A nonprofit organization that is debarred or suspended, or subject to an LDP, will be automatically removed from the HUD Nonprofit Roster. In all other cases, the following procedures for removal apply: • HUD will give the nonprofit organization written notice of the proposed removal. The notice will include the reasons for the proposed removal and the duration of the proposed removal. • The nonprofit organization will have 20 Days from the date of the notice (or longer, if provided in the notice) to submit a written response
HUD Handbook 4000.1 — Specific Program Participants
V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE E. Enforcement 5. Actions and Sanctions Against Individuals and Other Program Participants iv.
HUD Handbook 4000.1 — Specific Program Participants
1757 Last Revised: 11/26/2025 appealing the proposed removal and request a conference. A request for a conference must be in writing and must be submitted along with the written response. • A HUD official will review the appeal and provide an informal conference if requested. The HUD official will send a response affirming, modifying, or canceling the removal. The HUD official will not have been involved in HUD’s initial removal decision. HUD will respond with a decision within 30 Days of receiving the response, or, if the nonprofit organization has requested a conference, within 30 Days after the completion of the conference. HUD may extend the 30-Day period by providing written notice to the nonprofit organization. • If the nonprofit organization does not submit a timely written response, the removal will be effective 20 Days after the date of HUD’s initial removal notice (or after a longer period provided in the notice). If a written response is submitted, and the initial removal decision is affirmed or modified, the removal will be effective on the date of HUD’s notice affirming or modifying the initial removal decision. iv. Real Estate Brokers (A) Removal for Good Cause HUD may rescind real estate brokers’ HUD registration and prohibit those brokers from participating in the sale of HUD REO Properties for good cause. Good cause includes, but is not limited to: • conviction under 18 U.S.C. 371 or 1010 of a broker or by an agent supervised by that broker and acting within the scope of their duties; and • any of the following actions by a broker or an agent supervised by that broker and acting within the scope of their duties: o falsifying mortgage documents or aiding or abetting others in the use of false or misleading information including, but not limited to, forged or fraudulent gift letters and owner-occupant certifications; o acting in concert with an Appraiser to arrive at an artificial appraised value; o engaging in fraudulent activities that have led to Default and payment of an insurance claim; o failing to comply with earnest money collection, management, and disbursement procedures; o failing to maintain a current state license; o violating the Real Estate Settlement Procedures Act (RESPA); o failing to comply with civil rights requirements, including the Fair Housing Act and ECOA, in any real estate related transaction; o involvement in, or knowledge of, any fraudulent activity by any person involved in the HUD REO sales transaction; and
HUD Handbook 4000.1 — Specific Program Participants
V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE E. Enforcement 5. Actions and Sanctions Against Individuals and Other Program Participants iv.
Operationalizing FHA Single Family Housing Policy Handbook 4000.1, V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE > E. Enforcement > 5. Actions and Sanctions Against Individuals and Other Program Participants — e. Specific Program Participants
This is verbatim, source-snapshotted regulator text from the Claude for Compliance open corpus. To turn a rule like this into compliance work product: gap-analyze your policies and procedures (P&Ps) against these requirements to surface stale, conflicting, or missing provisions; operationalize any change with a ready-to-run update kit; and produce audit-ready evidence — every step grounded only in the regulator’s own words, never invented.
To work from the whole rulebook rather than this one page: download the corpus — every register on this site, verbatim, each with its source snapshot and effective date — then follow the methodology. It asks your assistant to answer only from the downloaded text, cite the register id and effective date it used, and tell you when the corpus does not cover something instead of filling the gap from memory. Running it locally also means no one sees which regulations you are looking at.
Source of record: https://claudeforcompliance.com/regs/hud-4000-1-specific-program-participants/
· register hud-4000-1-specific-program-participants · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.