Secondary Financing is used to record information pertaining to additional money provided to secure an FHA-insured mortgage loan. The provided funds (referred to as secondary financing) are not: a gift, obtained from the originating lender, or the first mortgage. These funds are intended to help supplement the borrower's funds to meet the required minimum cash investment necessary to close the FHA-insured mortgage loan.

Acceptable secondary financing fund sources from which a borrower may obtain monetary assistance include:

	Family / Relative
	Federal Government
	Federal Government - GNND
	Federal Home Loan Bank (FHLB) members
	Government - State and Local
	HUD/FHA-approved lenders
	Nonprofit agencies (may or may not be an Instrumentality of Government)
	Private organizations and/or eligible individuals
	Section 115 entities
As a provider of secondary financing, nonprofit agencies must meet specific requirements (listed below) if: a) they are or are not an Instrumentality of Government, or b) the loan is closing in the name of the nonprofit agency:
	Must have an Active status in the HUD/FHA-approved nonprofit agency listing
	Must be approved in the state in which the property is located
	Must have Full or Limited authorization for Secondary Financing in the FHA Connection, and
	The Secondary Financing authorization expiration date must not be earlier than the date that the case number was assigned in the FHA Connection