New FHA Requirements
- Borrowers without a credit score
- "Refer" scoring recommendation
- Underwriter downgraded "Refer" where total score was "Accept"
- Back to Work Program
- Credit Qualifying Streamline Refinance
Changes for manual underwriting requirements:
||Minimum||1-2 unit||1 month mortgage payment.|
|3-4 unit||3 months mortgage payments.|
|Max DTI 40/50%. with compensating Factors.||1-2 unit||3 months reserve.|
|3-4 unit||6 months reserve.|
|Maximum Ratios||Credit based.||FICO < 579||Maxi DTI 31/43%|
|FICO > 580||Max DTI 37/47% with (1)*|
|FICO > 580||Max DTI 40/50% with (2)*|
* Compensating Factors.
- Verified and documented cash reserves equal to at least three total monthly mortgage payments(1-2 units) orsix total monthly mortgage payments(3-4 units)
- New total monthly mortgage payment is not more than $100 or 5% higher than previous total monthly housing payment, whichever is less and there is a documented twelve month housing payment history with no more than one 30 day late payment.
- In cash out transactions all payments on the mortgage being refinanced must have been made within the month due for the previous 12months.
- Verified and documented significant additional income that is not considered effective income. (i.e. part time or seasonal income verified for more than one year but less than two years)
- Residual Income
The new FHA manual underwriting requirements DO NOT apply to:
- Rated "Accept"
- Non-credit qualifying FHA to FHA streamline refi
- Refi to Negative Equity Positions
- Section 255 Home Equity Conversion Mortgages
- Title I loans
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