There are changes from HUD coming up soon that will affect the home buyers who are utilizing FHA loans.
In this blog post I will outline what the changes are and what they mean for you.
You can get the full details and read the new mortgagee letter at the HUD website.
The subject of the letter is titled "Miscellaneous Underwriting Issues"
The 1st item is regarding income verification for those of us who are self-employed-Self employed borrowers must show a y-t-d profit & loss (P&L) and balance sheet if more than 1 calendar quarter has passed since filing the most recent tax return.
If the income used to qualify the borrower exceeds the last 2 years tax returns, an audited P&L or a signed quarterly tax return from the IRS must be provided.
The 2nd item is regarding disputed accounts on the borrower's credit report-Disputed accounts will no longer trigger a manual underwriting review if
1. The outstanding balance of all disputed accounts are less than $1,000 and
2. It has been 2 years or longer since the date of the last activity listed on the credit report for all disputed accounts.
If the borrower has 1 or more disputed credit accounts or collections with singular or cumulative balances $1,000 or higher, the accounts must be resolved or paid in full prior to or at the time of closing.
Items resulting from identity theft, fraud or unauthorized use of credit cards can be excluded if proper documentation is provided.
Judgements will still have to be paid off before the loan is eligible for FHA insurance.
The 3rd item is regarding Identity of Interest transactions-Brother, Stepbrother, Sister, Stepsister, Uncle & Aunt have now been added to the definition of a family member.
Identity of Interest transactions may result in a reduced maximum LTV limitation.
The final item is the increase of the FHA MIP rate-The upfront FHA MIP will increase from 1.00% to 1.75% regardless of the loan term.
The annual premium will increase by .10% for all loans.
For terms longer than 15 years with LTV ratios greater than 95% the new rate will be 1.25%; with LTV ratios equal to or less than 95% the new rate will be 1.20%
For terms 15 years or less with LTV ratios greater than 90% the new rate will be 0.60%; with LTV ratios equal to or less than 90% the new rate will be 0.35%
Remember these changes and rate increases will apply to all FHA case #'s after April 1, 2012, so get your loan docs completed now. If you need assistance feel free to contact me.
View homes for sale with pictures and virtual tours in Georgia here, no registration required
To get help with financial or credit issues click here
Priscilla Hammond
404.920.4776 x21
404.503.6562
In this blog post I will outline what the changes are and what they mean for you.
You can get the full details and read the new mortgagee letter at the HUD website.
The subject of the letter is titled "Miscellaneous Underwriting Issues"
The 1st item is regarding income verification for those of us who are self-employed-Self employed borrowers must show a y-t-d profit & loss (P&L) and balance sheet if more than 1 calendar quarter has passed since filing the most recent tax return.
If the income used to qualify the borrower exceeds the last 2 years tax returns, an audited P&L or a signed quarterly tax return from the IRS must be provided.
The 2nd item is regarding disputed accounts on the borrower's credit report-Disputed accounts will no longer trigger a manual underwriting review if
1. The outstanding balance of all disputed accounts are less than $1,000 and
2. It has been 2 years or longer since the date of the last activity listed on the credit report for all disputed accounts.
If the borrower has 1 or more disputed credit accounts or collections with singular or cumulative balances $1,000 or higher, the accounts must be resolved or paid in full prior to or at the time of closing.
Items resulting from identity theft, fraud or unauthorized use of credit cards can be excluded if proper documentation is provided.
Judgements will still have to be paid off before the loan is eligible for FHA insurance.
The 3rd item is regarding Identity of Interest transactions-Brother, Stepbrother, Sister, Stepsister, Uncle & Aunt have now been added to the definition of a family member.
Identity of Interest transactions may result in a reduced maximum LTV limitation.
The final item is the increase of the FHA MIP rate-The upfront FHA MIP will increase from 1.00% to 1.75% regardless of the loan term.
The annual premium will increase by .10% for all loans.
For terms longer than 15 years with LTV ratios greater than 95% the new rate will be 1.25%; with LTV ratios equal to or less than 95% the new rate will be 1.20%
For terms 15 years or less with LTV ratios greater than 90% the new rate will be 0.60%; with LTV ratios equal to or less than 90% the new rate will be 0.35%
Remember these changes and rate increases will apply to all FHA case #'s after April 1, 2012, so get your loan docs completed now. If you need assistance feel free to contact me.
View homes for sale with pictures and virtual tours in Georgia here, no registration required
To get help with financial or credit issues click here
Priscilla Hammond
404.920.4776 x21
404.503.6562
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