The Federal Housing Administration (FHA) will be releasing several guidelines changes around Sept. 14 for any case numbers issued on or after this date.

While these updates are not major ones and, of course, likely not the only ones being released, it’s important to pay attention to them now if you are thinking about using FHA insured financing on your next home loan. You don’t want to be surprised at the wrong time. These updates mainly clarify several prior guideline changes in an effort to help you and your lender better understand them.

For example, on deferred loan payments, they need to be included in your qualifying ratios. Should you have any deferred loan payments such as student loan payments, the FHA wants to see these payments listed in your monthly liability payments to make sure that you still have enough useable qualifying income to cover them.

In fact, over the next couple of months, there will be further clarification on student loan payments coming out from Fannie Mae, Freddie Mac and the FHA since this continues to be a hot spot in the mortgage lending world.

The FHA will also be looking more carefully at any authorized user information in your credit profile. An authorized user is when you are listed on someone else’s credit card but not a joint holder of that card.

If you have any authorized user credit, the payment must then be included in your qualifying ratios, unless you can provide documentation that the primary account holder has made all of the required payments on that account for the previous 12 consecutive months.

If you have any gaps in your employment history that are greater than six months, the FHA is going to require proof that you’ve been on your new or current job for at least six months.

They will look at this regardless of what created the gap in your employment history. Although, there is an exception, this guideline will not apply if you are on temporary disability or leave from your job.

Lastly, to help close the gap on those borrowers attempting to use a second FHA insured loan to purchase another home, the FHA clarified their mileage rule. The FHA only insures loans for owner-occupied borrowers.

Therefore, typically, you can have only one FHA-insured loan at a time. Unfortunately, there are plenty of home loan applicants nevertheless who try to circumvent this rule in an effort to avoid putting more money down on the purchase of another home. This is mortgage fraud, so don’t do it.

However, one of the exceptions to this rule is if you have a employment-related relocation. If so, your new principal residence must be in an area of more than 100 miles from your current principal residence.

To help police this rule, the FHA will no longer grant your lender any discretion to allow maximum insured financing on a second FHA insured loan due to employment relocation if the property is less than 100 miles from your current residence.

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Chris Salese can be reached at chris@delsurmortgage.com or 707 363-4439. He is a licensed California mortgage banker (NMLS 254469/1850 CA BRE 01377933/01215943) and equal housing lender.


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