UR Lending FHA Lending Guide

1
UR LendingFHA Lending Guide
2
Topics of Interest

• FHA Approval with UR Lending
• FHA Products UR Lending Presently Offers
• FHA Guidelines Analysis
• Understanding FHA Process
• Submitting FHA Loans to UR Lending
• QA

3
FHA Approval with UR Lending
4
FHA Approval with UR Lending

• Submit a copy of HUD Approval Letter indicating
  FHA Lender ID Number
• Submit a signed and dated FHA Addendum
• UR Lending will verify Sellers FHA Approval
  status and confirm Seller is in good standing
  with HUD

5
FHA Products UR Lending Presently Offers
6
FHA Products Offered by UR Lending Bank

• FHA Fixed Purchase15, 20, 25 and 30 Years
• FHA 1/1/5 Arm with 2 Margin
• FHA New Construction
• 95 / 85 Cash Out Refinance
• FHA Streamline
• FHA Secure (Details to Follow)
• Manufactured Home Programs

7
FHA Guidelines Analysis
8
FHA Guidelines - Eligible Borrowers

• U.S. Citizen
• Lawful Permanent Resident Aliens
• Non-Permanent Resident Aliens
• Non-U.S. Citizens with NO LAWFUL residency in
  U.S. are not eligible for FHA-insured mortgage

9
FHA Guidelines Eligible Borrowers

• U.S. Citizen
• A valid Social Security Number verified by credit
  report, income documentation and social security
  card
• No maximum age limit requirement, but minimum age
  is the age at which the mortgage note can be
  enforced legally in the state or other
  jurisdiction in which the property is located
• 2 year employment history with most recent 2 full
  years documentation of income

10
FHA Guidelines Eligible Borrowers

• Lawful Permanent Resident Alien
• Evidence of permanent lawful residency in U.S.
  issued by Bureau of Citizenship and Immigration
  Services (BCIS)
• A valid Social Security Number verified by credit
  report, income documentation and social security
  card
• 2 year employment history with most recent 2 full
  years documentation of income
• If the authorization for permanent residency
  status will expire within one year and a prior
  history of residency status renewals exists, the
  lender may assume continuation will be granted

11
FHA Guidelines Eligible Borrowers

• Non-Permanent Resident Aliens
• Legally eligible to work in the U.S. as evidence
  by an Employment Authorization Document (EAD)
  issued by Bureau of Citizenship and Immigration
  Services (BCIS)
• A valid Social Security Number verified by credit
  report, income documentation and social security
  card
• 2 year employment history with most recent 2 full
  years documentation of income
• If the authorization for temporary residency
  status will expire within one year and a prior
  history of residency status renewals exists, the
  lender may assume continuation will be granted

12
FHA Guidelines - Eligible Properties

• Single family (1,2, 3 and 4 units), Plan Unit
  Development (PUD) and Condominiums
• Primary Residence - owner occupied properties
  only for purchase transactions
• No Cash Reserve Requirement for 1 and 2 units.
• Cash Reserve Requirement of 3 months principal,
  interest, taxes and insurance (PITI) of borrower
  own funds for 3 and 4 units properties
• Cannot be derived from Gift Funds

13
FHA Guidelines - Down Payment Requirement

• A cash investment of three percent of the
  contract sales price is required the three
  percent may come from the following sources
• Borrower
• Gift from a relative
• Borrower's employer or labor union
• Charitable organization, a governmental agency or
  public entity that has a program to provide
  homeownership assistance to low- and
  moderate-income families or first-time homebuyers
• a close friend with a clearly defined and
  documented interest in the borrower.

14
FHA Guidelines - Seller Contribution

• Seller of subject property may give a
  contribution of up to 6 of sales price to
  borrower for pre-paids, discount points and
  closing cost
• It must be a true contribution therefore, the
  sales price may not be increased to allow Seller
  to recoup contributing funds
• Seller of subject property may not give a gift to
  Borrower toward down payment

15
FHA Guidelines - Closing Cost

• New Requirement
• Seller may charge and collect from borrowers
  those customary and reasonable local fees
  necessary to close the mortgage.
• Due to existing requirements, borrowers may not
  pay a tax service fee, and may not be charged an
  origination fee greater than one percent

16
FHA Guidelines - Assets Verification

• Sufficient funds to close must be verified by
  following documentation
• Most Recent 2 Months Bank Statements
• Any recent large deposit and new accounts must be
  explained
• Gift Funds Gift Letter with copy of the canceled
  check, deposit slip and bank statement that shows
  the deposit or copy of certified check made on
  the donor's account and bank statement showing
  the withdrawal from the donor's account
• Grant funds from an organization that meets HUDs
  guidelines. Provide an award letter indicating
  how grant funds will be distributed.

17
FHA Guidelines - Ratio Requirements

• Ratios are used to determine whether the borrower
  can reasonably be expected to meet the expenses
  involve in homeownership.
• The lender must calculate two ratios
• Mortgage Payment Expense to Effective Income
  Ratios
• Total of the Mortgage Payment and All Recurring
  Debt to Effective Income Ratios.
• The Ratio requirement for the two calculations
  are 31 / 43
• Ratios up to 33/45 may be acceptable only if
  borrower has at least 3 Compensating Factors
• Ratios may exceed 33 / 45 with AUS approval

18
FHA Guidelines - Compensating Factors

• Satisfactory 12 to 24 months housing expense
  history greater or equal to new housing
  obligation
• Small increase of housing expenses
• Large down payment 10 or more
• Ability to save with conservative attitude toward
  credit
• Substantial documented cash reserves
• Potential for increase earning
• Relocation as a result of employment of primary
  wage earner
• Substantial non-taxable income
• Documented Income that is not reflected in
  effective income

19
FHA Guidelines Stability of Income

• Salaried Income Requirement
• Provide most recent 30-days of pay-stubs and most
  recent two-years w-2s
• Verification of Employment (VOE) from each
  employer to show a full two years of income plus
  a 30 day paystub. VOE must indicate start date,
  base income and that employment is likely to
  continue
• Employment gaps more than 30 days must be
  explained.
• Income is determined by averaging complete two
  year income history
• If recent income is decreasing from previous two
  years, the lower recent income is considered for
  qualifying
• The above documentation requirements may be
  streamlined if AUS approval is received

20
FHA Guidelines Stability of Income

• Part-time, Overtime, Bonus and Seasonal Incomes
• Provide a Verification of Employment (VOE)
  showing income has been received for the past two
  years plus paystubs
• VOE must indicate income is likely to continue.
• Monthly income is calculated by averaging last
  two year income history
• Income received for less than two years may be
  acceptable provided borrower can justify and
  document in writing the reason for using the
  income for qualifying purposes.
• The above documentation requirements may be
  streamlined if AUS approval is received

21
FHA Guidelines Stability of Income

• Commission Income Requirement
• Copies of signed and dated tax returns for the
  last two years, along with the most recent pay
  stub
• Verification of Employment (VOE) must be obtained
  from each previous employer to verify income has
  been received for a full two years. VOE must
  indicate income is most likely to continue.
• Monthly income is calculated by averaging last
  two year income history
• If borrowers income is 100 commission without
  documenting 2 two full years of commission
  income, borrower will not qualify for FHA
  financing at this time.
• The above documentation requirements may be
  streamlined if AUS approval is received

22
FHA Guidelines Stability of Income

• Self-employment income
• Borrower with a 25 percent or greater ownership
  interest in a business is considered
  self-employed
• Signed and dated individual tax returns, plus all
  applicable schedules, for the most recent two
  years.
• Signed copies of federal business income tax
  returns for the last two years, with all
  applicable schedules, if the business is a
  corporation, an "S" corporation, or a
  partnership.
• A year-to-date profit-and-loss (PL) statement
  and balance sheet
• A business credit report on corporations and "S"
  corporations (if applicable )
• A business showing a significant decline in
  income over the period analyzed is not acceptable
  and will not qualify for FHA financing
• The above documentation requirements may be
  streamlined if AUS approval is received

23
FHA Guidelines Stability of Income

• Alimony, Child Support, or Maintenance Income.
• Provide a copy of the final divorce decree, legal
  separation agreement, or voluntary payment
  agreement, as well as evidence that payments have
  been received during the last twelve months
  (i.e., 12 months worth of banks statements)
• Provide proof income is likely to be consistently
  received for the first three years of the
  mortgage
• The above documentation requirements may be
  streamlined if AUS approval is received

24
FHA Guidelines Stability of Income

• Non-Taxable Income
• Disability income, Public Assistance Income,
  Military Allowances, Social Security Income are
  not subject to federal income taxes
• Non-taxable income may be grossed up 25
• Income most likely continue for 3 years and
  documentation from source of income
• The above documentation requirements will be
  streamlined if AUS approval is received

25
FHA Guidelines Stability of Income

• Rental Income received for properties owned is
  acceptable if the borrower can document rental
  income is stable.
• The following documentation may be considered
• Most current lease showing rental agreement for
  12 full months
• Most recent cancelled checks for 12 full months
  or
• Tax returns indicating 12 month rental history
• 12 months rental history must be free of
  unexplained gaps greater than three months
• 75 of rental income is used to qualify borrower
• The above documentation requirements will be
  streamlined if AUS approval is received

26
FHA Guidelines - Credit Evaluation

• Credit scores are not an important factor when
  evaluating a borrowers credit history
• URL Underwriters will examine the overall pattern
  of credit behavior, rather than isolated
  occurrences of unsatisfactory or slow payments.
• A period of financial difficulty in the past does
  not necessarily make the risk unacceptable if the
  borrower has maintained a good payment record for
  a considerable time period since the difficulty
• Usually a full 12 months of good established
  credit payment history prior to the loan
  transaction is acceptable to overcome slow
  payments in the past
• The above documentation requirements will be
  streamlined if AUS approval is received

27
FHA Guidelines - Credit Evaluation

• Collections
• FHA does not require that collection accounts be
  paid off as a condition of mortgage approval.
  Collections indicate a borrowers regard for
  credit obligations and must be considered in the
  analysis of creditworthiness with the URL
  Underwriter documenting its reasons for approving
  a mortgage where the borrower has collection
  accounts
• The borrower must explain in writing all
  collections
• Medical collections do not have to be paid off
• Underwriter determines if non-medical collections
  must be paid off prior to closing
• The above documentation requirements may be
  streamlined if AUS approval is received

28
FHA Guidelines - Credit Evaluation

• Judgments
• Court-ordered judgments must be paid off before
  the mortgage loan is eligible for FHA insurance
  endorsement.
• An exception may be made if the borrower has
  agreed with the creditor to make regular and
  timely payments on the judgment and documentation
  is provided that the payments have been made in
  accordance with the agreement
• The borrower must explain in writing all
  judgments
• The above documentation requirements may be
  streamlined if AUS approval is received

29
FHA Guidelines - Credit Evaluation

• Foreclosure
• The borrowers previous principal residence or
  other real property must have foreclosed or given
  a deed-in-lieu of foreclosure more than three
  years prior to be eligible for a FHA mortgage
  loan
• Borrower must have a good re-established credit
  history after the foreclosure or choose not to
  re-establish at all

30
FHA Guidelines - Credit Evaluation

• Bankruptcy
• Chapter 13 bankruptcy does not disqualify a
  borrower from obtaining an FHA-insured mortgage
  provided the following
• Borrower has been in Chapter 13 for at least one
  year
• Borrowers payment performance has been
  satisfactory (i.e., all required payments made on
  time)
• Borrower must receive permission from the trustee
  of the court to enter into the mortgage

31
FHA Guidelines - Credit Evaluation

• Bankruptcy
• Chapter 7 (liquidation) does not disqualify a
  borrower from obtaining an FHA-insured mortgage
  if the following criteria are met
• At least two years have elapsed since the date of
  the discharge of the bankruptcy
• Borrower must have re-established good credit or
  chosen not to incur new credit obligations.
• Borrower also must have demonstrated a documented
  ability to responsibly manage his or her
  financial affairs. An elapsed period of less
  than two years, but not less than 12 months, may
  be acceptable if the borrower can show that the
  bankruptcy was caused by extenuating
  circumstances beyond borrower control

32
FHA Guidelines - Credit Evaluation

• Consumer Credit Counseling Payment Plans
• Participation in a consumer credit counseling
  payment program does not disqualify a borrower
  from obtaining an FHA-insured mortgage provided
  the following requirements are met
• one year of the pay-out period has elapsed under
  the plan
• payment performance has been satisfactory (i.e.,
  all required payments made on time)
• Borrower must receive written permission from the
  counseling agency to enter into the mortgage
  transaction.

33
FHA Guidelines

• Non-Traditional Credit
• If borrower doesnt have any traditional lines
  of credit on a credit report, non-traditional
  lines of credit may be obtain to qualify borrower
  
• Provide documentation for a full 12 months
• Utility payment records
• Automobile insurance payments
• Day Care
• Rental payments
• Must provide at least three pieces of
  Non-Traditional documentation. If borrower has
  rental expenses, it must be one of the of the
  three documents
• May provide documentation to Credit Reporting
  Agency to establish credit or provide third-party
  documentation directly to URL Underwriter

34
FHA Guidelines

• Verifying Previous Housing Obligations
• Rental verification
• Credit Report, Management Service or 12 month
  cancelled checks.
• Mortgage Verification
• Credit Report, Verification of Mortgage or 12
  month cancelled checks
• The above documentation requirements may be
  streamlined if AUS approval is received

35
FHA Guidelines

• Non-Occupant Co-Borrowers are allowed
• No minimum ratio requirements for occupying
  borrower
• Non-Occupant Co Borrower must be a relative or a
  document friendship with borrower
• Guideline Ratios for occupying borrower and
  non-occupying combined are 31/43
• Single family properties or one unit condos only

36
FHA Guidelines - FHA New Construction

• There are three types of New Construction
• Proposed Construction construction has not
  started, only land exists
• Under Construction construction has began, but
  not 100 complete
• Existing New Construction 100 completed and
  property less than one year old.
• URL is only financing FHA Existing New
  Construction Loans.
• Also known as the permanent loan or the end loan
• UR Lending is not financing FHA Proposed
  Construction and FHA Under Construction loans at
  this time

37
FHA Guidelines - FHA New Construction

• Required Documentation - FHA New Construction
• It is the Appraiser and Lender (Direct
  Endorsement (DE) Underwriter) responsibility to
  obtain the following documentation
• Builders Certification of Plans, Specifications
  and Site, Form HUD-92541
• Builder Warranty, Form 92544
• Building Permit and Certification of Occupancy or
  Compliance Inspections and 10-Year Warranty
  Lender
• Wood Infestation Report, NPCA 99a and 99b
• Local Health Authority well water analysis or
  septic report, where applicable

38
FHA Guidelines - FHA New Construction

• Energy Efficient Mortgage
• Borrower may upgrade their home by installing
  energy efficient improvements and incorporate the
  cost into the mortgage
• Existing and newly constructed one-to-four unit
  properties are eligible
• Ratios are 33 / 45
• Maximum FHA mortgage amounts vary by area and may
  be exceeded by up to 5 or 8,000, whichever is
  less
• Borrower must select the energy efficient
  mortgage option and notify the Lender before
  closing
• Ratios may exceed 33 / 45 with AUS approval

39
FHA Guidelines 95/85 Cash Out

• 95 of the appraised value is permitted under the
  following eligibility terms and conditions
• Property owned as principal residence for at
  least 12 months preceding the date of the loan
  application.
• No late mortgage payments within last 12 months
• If any late mortgage payment during preceding 12
  months, only 85 will be considered
• 1or 2 unit dwelling only (3 and 4-unit dwellings
  are not eligible).
• Non-occupant co-borrowers are not permitted on
  cash-out refinances
• The above documentation requirements will be
  streamlined if AUS approval is received

40
FHA Guidelines

• FHA Streamline with Appraisal
• Borrower must have an existing insured FHA loan
• Must be owner occupied
• Mortgage payment history required for 12 months,
  or life of loan if less than 12 months old
• No credit report required
• Income and Assets not disclosed or verified
  unless the loan must Credit-qualify
• Primary residence only (1-4) and borrower wants
  to roll closing costs into loan (no escrow
  shortages can be included)

41
FHA Guidelines

• FHA Streamline with Appraisal
• Must always be same borrowers as original FHA
  loan
• Only exceptions are in cases of death or divorce
  more than 6 months
• Provide Death Certificate or Divorce Decree, Quit
  Claim Deed executed at least 6 months ago and 6
  months cancelled checks for mortgage payments in
  borrowers name
• Borrower wishing to remove a borrower for death
  or divorce must do a FHA streamline with an
  appraisal

42
FHA Guidelines

• FHA Streamline with Appraisal
• Closing costs, prepaid items, UFMIP, and
  reasonable discount points (approximately 2)
  may be included in the new mortgage subject to
  maximum mortgage requirements
• Pay off first mortgage only all 2nd mortgages
  and HELOCs must be re-subordinated
• ARM to Fixed limitation is 2 above the current
  interest rate
• Principle and interest can not increase more than
  20

43
FHA Guidelines

• FHA Streamline without an Appraisal
• All Guidelines same as Streamline with Appraisal
  except
• The maximum loan amount on owner occupied
  properties is limited to the lesser of (1) the
  original principal of the loan being refinanced
  or (2) the sum of the current outstanding
  principal balance of the existing mortgage plus
  closing costs, pre-paids and discount points
• The maximum loan amount on 2nd homes and
  investment properties (which were originally
  owner-occupied by the Borrower) must be financed
  w/o an appraisal and is limited to only the
  outstanding principal balance, and with a fixed
  rate and no increase in the PI payment
• Maximum term is the lesser of 30 years or the
  remaining term of the old loan plus 12 years this
  applies to streamlines without an appraisal

44
FHA Appraisals

• Appraisal Process Overview
• Appraiser must be FHA approved and not on any
  industry bank exclusionary lists
• FHA has adopted the following Fannie Mae
  appraisal reporting forms (mortgage industry
  standard forms)
• Uniform Residential Appraisal Report (Fannie Mae
  Form 1004) for all 1 unit single family dwellings
• Individual Condominium Unit Appraisal Report
  (Fannie Mae Form 1073) for all individual
  condominium units
• Small Residential Income Property Appraisal
  Report (Fannie Mae Form 1025) for all 2 to 4 unit
  single family dwellings
• Minor property conditions no longer require
  automatic repairs for existing properties

45
The Newest FHA Product

• FHASecure
• Effective immediately through December 31, 2008
• Delinquency resulted from reset
• Eligibility Requirements Non FHA-ARM that has
  reset
• Six months on-time payments prior to reset
• Demonstrated capacity to repay
• Single Family owner-occupied, principal residence
• Compensating Factors are allowed with Manual
  Underwriting

46
The Newest FHA Product

• FHASecure (continued)
• Current FHA geographical maximum mortgage limits
  apply
• Current FHA maximum loan-to-value limits apply
• May cover existing first lien, purchase money
  second, closing costs, prepaid expenses, points,
  late charges, arrearages, and other costs (No
  Cash Out allowed)
• Effective immediately through December 31, 2008

47
Most Recent FHA Change

• Second Liens in conjunction with FHASecure are
  allowed
• Effective immediately
• Must be Subordinate to First Lien
• First Lien must meet FHA LTV and Loan Limit
  Requirements
• CLTV may exceed the FHA LTV and Loan Limits
  (Lenders Discretion)
• Qualifying FHA Ratios (31 / 43) apply to second
  liens, unless payment are deferred more than 36
  months
• Compensating Factors are allowed with Manual
  Underwriting

48
FHA Mortgage Insurance Premium (MIP)

• Current MIP Structure
• Every FHA loan has two types of Mortgage
  Insurance
• UFMIP Up-Front Mortgage Insurance Premium
• Annual Mortgage Insurance Premium

49
FHA Mortgage Insurance Premium (MIP)

• Current MIP Structure
• UFMIP Up-Front Mortgage Insurance Premium is
  calculated on the Base loan amount
• FHA has reduced its UFMIP to 1.50

50
FHA Mortgage Insurance Premium (MIP)

• Annual MIP FHA requires collection in monthly
  installments
• Annual MIP is .50 for a 30 year mortgage
• Calculation for monthly payment is
• (.50 x base loan amount 12)
• Borrower must have mortgage for 5 years and the
  LTV must go down to 78 before borrower stops
  paying Annual MIP

51
FHA Mortgage Insurance Premium (MIP)

• Annual MIP FHA requires collection in monthly
  installments
• Annual MIP is .25 for mortgage terms 15 years or
  less
• Calculation for monthly payment is (25 x base
  loan 12)
• If borrower puts down more than 10 (89.99
  LTV), there is no Annual MIP for terms 15 years
  or less

52
Understanding the FHA Process and Resources
53
FHA Connection https//entp.hud.gov/clas/index.cfm
54
Understanding the FHA Process

• CASE NUMBER
• The Case Number is assigned to the Subject
  Property
• A Case Number must be ordered in FHA Connection
  when a borrower finds a property
• The Case Number must be ordered in brokers name
  with United Residential Lending, LLC ( UR
  Lending) as sponsor
• The Case Number must match on all documents
• If a Case Number is originally ordered in another
  companys name, it must be assigned to UR Lending

55
FHA Connection Case Number assignment flow
Single Family FHA gt Single Family Origination
gtCase Processing gt Case Number Assignment.
56
FHA Case Number Assignment
Validation Page Property Address and Borrower
Data must be validated before the FHA Case Number
can be received.
57
Case NumberAssignment Page

• Case Number Assignment Page has 7 sections that
  must be completed before a Case number can be
  received
• General Information,
• As Required,
• Property Address,
• Appraiser Fields,
• Compliance Inspection Fields,
• Borrower Information,
• Lender Notes

58
Case Number Assignmenthas been created
59
Understanding the FHA Process

• Credit Alert Interactive Voice Response System
  (CAIVRS)
• Searches for any delinquent federal debts from
  borrower
• You may access CAIVRS site through FHA Connection
  or go directly entp.hud.gov/caivrs/public/home.htm
  l to access CAIVRS
• CAIVRS must be ordered on all Borrowers
• If the borrower, as revealed by public records,
  credit information, or HUDs Credit Alert
  Interactive Voice Response System (CAIVRS), is
  presently delinquent on any Federal debt, the
  borrower is not eligible until the delinquent
  account is brought current, paid, otherwise
  satisfied, or a satisfactory repayment plan is
  made between the borrower and the Federal agency
  owed and is verified in writing.

60
Understanding the FHA Process

• ENTER CAIVRS in the CAIVRS Authorization
  section.
• A FHA Connection User name and Password is
  required to enter the CAIVRS site

61
CAIVRS Agreement Page Click on I Agree
Understanding the FHA Process
62
CAIVRS Prescreening PageBorrowers Social
Security Number is required to order CAIVRS Number
63
Understanding the FHA Process

• Limited Denial of Participation (LDP) and General
  Service Administration (GSA)
• LDP and GSA must be ordered on each party
  benefiting from FHA mortgage transaction (real
  estate agents, sellers, borrowers, brokers,
  originators)
• LDP and GSA are list of parties excluded from
  participating in loan transactions with the
  federal government.
• Sellers may access LDP and GSA list in FHA
  Connection on the FHA Approve List Page or
  directly through the LDP or GSA sites

64
Understanding the FHA Process

• Limited Denial of Participation (LDP)
• The Limited Denial of Participation (LDP) is an
  action taken by a HUD field office or the Deputy
  Assistant Secretary for Single Family or
  Multi-family Housing which excludes a party from
  further participation in HUD programs. A party is
  usually excluded for federal delinquent debt.
• The name of each party to the transactions is
  inputted separately into the LDP search engine.
  If any partys name is on the list, that party
  has the burden of proofing she/he isnt barred
  from participating in HUD Programs
• The list is organized in alphabetical order.
  Customer (Broker) must print out and place
  appropriate LDP pages in the file. Underwriter
  will review pages to verify no one involved in
  the FHA mortgage transaction is on the list
• The LDP List may be accessed at
  www5.hud.gov/Ecpcis/main/ECPCIS_List

65
LDP Search Place a Name in Search Engine to
access LDP List
Understanding the FHA Process
66
Understanding the FHA Process

• General Service Administration (GSA)
• General Service Administrations (GSAs) Excluded
  Parties Listing System (EPLS) provides access to
  various electronic reports that identify parties
  that are excluded throughout the U.S. Government
  from receiving Federal contracts and subcontracts
  as well as from certain types of Federal
  financial and non financial assistance and
  benefits.
• The name of each party to the transactions is
  inputted separately into the GSA search engine.
  If any partys name is on the list, that party
  has the burden of proofing she/he isnt barred
  from being involved in FHA transactions
• GSA list may be accessed from FHA Connection and
  the GSA site at www.epls.gov/

67
GSA List Website Place name in Search Current
Exclusions section to Access GSA List
68
Understanding the FHA Process

• FHA Mortgage Loan Limits
• FHA Mortgage loan limits may be accessed from FHA
  Connection or https//entp.hud.gov/idapp/html/hic
  ostlook.cfm
• This web page allows you to look up the FHA
  mortgage limits for your area or several areas,
  and then list them by state, county, or
  Metropolitan Statistical Area.

69
Understanding the FHA Process

• Low Mortgage Limits (Floor)
• 1 Unit 200,160
• 2 Units 256,248
• 3 Units 309,744
• 4 Units 384,936
• High Cost Limits (Ceiling)
• 1 Unit 362,790
• 2 Units 464,449
• 3 Units 561, 411
• 4 Units 697,696

• Each county in every state has a maximum FHA loan
  limit.
• The loan amount can never exceed this loan limit.
• There are loan limit requirements for 1, 2, 3 and
  4 unit properties.
• Most County Limits will fall between limits in
  this table

70
FHA Mortgage Loan Limit Website
Understanding the FHA Process
71
Counties in New Jersey Loan Limits
Understanding the FHA Process
72
Understanding the FHA Process

• Important FHA Websites
• HUD Website
• www.hud.gov
• FHA Website
• www.fha.gov
• HUD Lender page
• www.hud.gov/groups/lenders.cfm
• FHA MortgageLimits
• https//entp.hud.gov/idapp/html/hicostlook.cfm
• FHA Connection
• https//entp.hud.gov/clas/index.cfm
• Mortgagee Letter HUD Handbooks
• www.hudclips.org/cgi/index.cgi

73
Submitting FHA Loansto UR Lending
74
Submitting FHA Loans to UR Lending
The Key Steps in the FHA loan process are
tied together through open and ongoing
Communication between the Customer and the
Operational Units.
File Submission
Underwriting
Customer Communication
Rate Lock
Closing/Funding
75
Submitting FHA Loans to UR LendingCommunication

• Contact your Account Manager (AM) for
• Notification of underwriting decision and/or
  options
• Status of conditions submitted and reviewed
• Final notification of loan approval
• Obtaining the most up to date status of your
  loans
• Coordinating Funding dates and scheduling
• Maintaining Rate Locks and extensions
• All issues or questions concerning the loan
  process

76
Submitting FHA Loans to UR LendingFile
Submission

• Originate the loan application on your LOS
• Run Credit and obtain DU/LP decision
• Contact your URL Sales representative (AE) for
  pricing
• Fill out the URL File Submission Form and place
  in folder
• Form indicates the information to submit with the
  loan, such as
• A complete loan application MCAW
• CAIVRS results Credit Report
• DU or LP Findings LDP/GSA
• Printout - FHA Case Num Assignment Appraisal
• if Refer, include explanations and 2-3
  Compensating Factors
• Ship (mail/fax/email) file URL Operations Center
  in AZ
• Be sure to calculate include the proper fees up
  front
• Fees not disclosed up front cannot be added at
  Closing

77
Submitting FHA Loans to UR Lending Underwriting

• URL will confirm that the DU/LP decision was
  assigned correctly to URL
• URL will validate the AUS Approval or manually
  underwrite any Refer decision
• URL will contact you with the initial decision
• If loan will be Suspended or Declined, the
  underwriter will discuss any opportunities to
  restructure the deal
• You will receive a Conditional Approval Notice
  with
• Prior to Doc conditions and
• Prior to Fund conditions
• Obtain the required conditions from the Borrower
  and submit them immediately to URL via fax

78
Submitting FHA Loans to UR LendingRate Lock

• Rates can be Locked at anytime during the loan
  process prior to Closing/Funding according to URL
  existing guidelines and limits
• All loans must be Locked before Closing/Funding
  can be scheduled
• Coordinate all Locks, extensions, etc. directly
  with your AM

79
Submitting FHA Loans to UR LendingClosing/Fundin
g

• Your AM will validate that everything is ready to
  fund
• FHA Loans are only available for Table Funding
• All loans must close in URLs name
• Your AM will schedule the Closing/Funding date
• The Funder works with you to get Funding
  Conditions
• The Title Agent must submit the Note and any
  Government specific forms required for Closing
• If loan info, loan amount or closing costs
  change,
• URL will be required to
• Have an Underwriter update the MCAW and re-run DU
• Have the Funder re-draw documents as needed
• Recalculate to ensure loan limits and fees are
  acceptable

80
UR Lending FHA QA