1. FHA

2. Reasons for obtaining an FHA loan
One of the easiest loan types to qualify for
Lower FICO score requirement
Less than perfect credit
No reserves required
Low down payment

3. New Program – 203(h)
MWF is pleased to announce the roll out of FHA’s 203(h) Disaster Loans. These loans are for borrowers who were impacted or displaced due to having lived in a Presidentially designated disaster area. The FHA 203(h) makes it easier for borrowers to obtain a mortgage to become a homeowner or re establish themselves as homeowners.

4. FHA 203(h) 100% LTV/CLTV FICO’s as low as 500 High Balance 580
No Down Payment required
Closing Costs and Prepaids must be paid by borrowers
31/43% DTI – conforming loan amounts
Up to 55% DTI High Balance with a 680 FICO
No manual underwrites
1 unit – SFR, Condo, PUD
Existing mortgage payment on damaged home is not included in DTI
New home purchase does not need to be located in the area where the previous home was

5. Minimum FICO Score 580
1 unit SFR, Condo, PUD’s only. No manufactured homes.
Ratios 31/43%
No Manual Underwrites
Borrower’s own funds, no gifts or DPA’s
Direct Pricing

6. Overlays
Co borrowers will be allowed with no FICO score, other than a spouse, as long as documentation is provided to verify borrower and co borrower have been living together for the past 12 months (consecutively). One borrower needs to have and meet all FICO score requirements. Approve/Eligible only.
FHA Transfer Disclosure Statement (TDS) will no longer be required in any state. When provided TDS will be reviewed.

7. Manufactured Homes
Per on any FHA manufactured home transaction (Purchase or Refinance), the subject manufactured home must be installed on a permanent foundation for 12 months prior to the case number assignment.
New construction guides must be followed when the simultaneous purchase of the land and the manufactured unit are taking place.

8. MCC FHA
The amount of the MCC needs to be included in the income section of DU. When running the loan through DU, select the FNM Government MCC in the income section (dropdown box). This will ensure that the MCC is included as income. Refer to Bulletin #17R-081 and #17W-060 for additional guidance.

9. PACE/HERO Program
FHA allows for the PACE/HERO program to be subordinated to their 1st trust deed. MWF will allow the PACE/HERO program to remain and be subordinated with sufficient documentation verifying MWF will be insured by the title company in 1st position.

10. DU Findings and Income Documentation
Follow the DU findings for all income documentation. DU may only ask for the most recent paystub, and one of the following: written VOE, or electronic verification acceptable to FHA.

11. Income Documentation
TRADITIONAL DOCUMENTATON - CURRENT EMPLOYMENT  Obtain the most recent pay stub and one of the following to verify current employment:  • Written Verification of Employment (VOE) covering 2 years; or  • Electronic verification acceptable to FHA  ALTERNATIVE  DOCUMENTATION - CURRENT EMPLOYMENT  • Obtain copies of the most recent pay stub that shows the Borrower’s year- to-date earnings;  • Obtain copies of the original IRS W-2 forms from the previous 2 years; and  • Document current employment by telephone, sign and date the verification documentation and note the name, title, and telephone number of the person with whom employment was verified

12. Income Documentation
REVERIFICATION OF EMPLOYMENT  Re-verification of employment applies to both traditional and alternative documentation methods and must be completed within 10 days prior to the date of the Note. Verbal re-verification of employment is acceptable.   PAST EMPLOYMENT DOCUMENTATION Direct verification of the Borrower’s employment history for the previous 2 years is not required if all of the following conditions are met:  • The current employer confirms a 2 year employment history, or a paystub reflects a hiring date.  • Only base pay is used to qualify (no overtime or bonus income).  • The borrower executes IRS Form 4506, Request for Copy of Tax Return, or IRS Form 8821, Tax Information Authorization, for the previous 2 tax years.   If the applicant has not been employed with the same employer for the previous 2 years and/or not all conditions immediately above can be met, then the Mortgagee must obtain one or a combination of the following for the most recent 2 years to verify employment history:  • W-2(s)  • VOE(s)  • Electronic verification acceptable to FHA  • Evidence supporting enrollment in school or the military during the most recent 2 full years  

13. Reminder
Non occupying co borrowers must be a family member (as defined by HUD, ), otherwise maximum LTV is 75%
The is always available for guidance and can be found on AllRegs, and a PDF version is also available online.
MWF also has a link to the on our website.

14. Requesting Future Topics
Please direct any topic requests to:

15. THANK YOU FOR ATTENDING
MWF will be providing additional webinars on several different loan products in the near future.