---
kind: "section"
citation: "24 C.F.R. § 1005.207"
title: "24"
number: "1005.207"
heading: "Lender Applicant participation options."
url: "https://uscodex.org/cfr/24/1005.207"
---

# §1005.207. Lender Applicant participation options.

- (a) **Levels of participation.** Lender Applicants must choose one of two levels of program participation, a Non-Direct Guarantee Lender or a Direct Guarantee Lender and submit an application to participate on a form prescribed by [Section 184](/cfr/24/184.md) Program guidance. A participation level must be selected by the Lender Applicant and approved by HUD before initiating any [Section 184](/cfr/24/184.md) Program activities.
- (b) **Non-Direct Guarantee Lender.**
  - (1) **A Non-Direct Guarantee Lender originates loans.**
  - (2) A Non-Direct Guarantee Lender must be a Sponsored Entity under [§ 1005.213](/cfr/24/1005.213.md).
  - (3) A Non-Direct Guarantee Lender must submit documentation supporting their eligibility as a Lender under [§ 1005.203](/cfr/24/1005.203.md) or approved by HUD under [§ 1005.205](/cfr/24/1005.205.md) and other documentation as prescribed by [Section 184](/cfr/24/184.md) Program Guidance to HUD through their Sponsor.
- (c) **Direct Guarantee Lender.**
  - (1) A Direct Guarantee Lender may originate, underwrite, close, service, purchase, hold, and sell [Section 184](/cfr/24/184.md) Guaranteed Loans.
  - (2) A Direct Guarantee Lender may sponsor Non-Direct Guarantee Lenders or other Direct Guarantee Lenders in accordance with [§ 1005.213](/cfr/24/1005.213.md).
  - (3) To become a Direct Guarantee Lender, Lender Applicants must submit additional documentation as provided in [§ 1005.209](/cfr/24/1005.209.md) and obtain HUD approval under [§ 1005.211](/cfr/24/1005.211.md).

## Notes

### Authority

Authority: 12 U.S.C. 1715z-13a; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).

### Source

Source: 89 FR 20056, Mar. 20, 2024; 89 FR 22084, Mar. 29, 2024, unless otherwise noted.