FHA

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

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.

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

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

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.

Manufactured Homes Per 4000.1 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.

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.

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.

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.

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

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  

Reminder Non occupying co borrowers must be a family member (as defined by HUD, 4000.1), otherwise maximum LTV is 75% The 4000.1 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 4000.1 on our website.

Requesting Future Topics Please direct any topic requests to: monica.quintana@mwfinc.com

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