The FHA lender approval regulations don’t list LLCs as an eligible business type, but does allow for the approval of “permanent organizations with succession.” FHA’s legal staff decided that an LLC could meet that requirement if the LLC’s Articles of Organization and/or Operating Agreement contained the following:
. Specify that the LLC consist of two or more members. A single member LLC is acceptable only if the member is a corporation consisting of two
. Specify a minimum term of existence of at least ten years in its Operating Agreement (can be a new LLC);
. Provide for succession;
. Authorize continuance in the event of the withdrawal or death of a member; and
. Specify that the LLC will not terminate until all FHA-insured mortgages have been transferred to another approved mortgagee.
See paragraph 2-2.C in Chapter 2 of the Title II Mortgagee Approval Handbook 4060.1, Rev-2 here for additional details.