FHA Underwriting lets you know all required documents for your loan
28 Mar

FHA Underwriting

FHA Underwriting

Knowing The FHA Underwriting Process Is Important

If there is a part of a mortgage transaction that will determine your approval or denial of your loan it is the decision of the underwriter or underwriting on your loan file.  In the case of FHA, it will be FHA Underwriting that will be the deciding factor when it comes to your loan.  To begin with, the underwriting process of a mortgage is when all your required documentation has been submitted to your loan officer and/or loan processor and this is sent over to the underwriting team.  Per FHA Underwriting the first thing that takes place is your scenario will be prepared electronically into a file that is then submitted into AUS or the Automated Underwriting System. 

The AUS is a computer system that has been programmed with all the loan program’s details and requirements in order to first try and get an approval.  When your particular details are filled out in the preferred format, the AUS will see if your file checks all the boxes, and if so an Approve Eligible will be had.  If there are deficiencies in your loan file then you might be met with a Refer Ineligible or a Refer Eligible.

  • Refer Ineligible: This means that the borrower does not qualify for the particular loan program and in this case it would be deficient in passing the FHA Underwriting guidelines.  This decision can come about from derogatory marks on the borrower’s credit report where the mandatory waiting period has not been met.  You can also get a Refer Ineligible if your lender has overlays which require you to satisfy additional guidelines than the loan program calls for.
  • Refer Eligible: This is a decision that basically is stating that although the file isn’t good enough to approve, with some help it can obtain an approval in the future.  Now with FHA Underwriting there are two paths you can go and that is to make changes to your file and resubmit to the AUS or you can go through a manual underwrite where an underwriter will go through your entire file and can determine an approval or not.

Underwrite With FHA

If you aren’t familiar with FHA Underwriting and their manual underwriting procedures, this is when your documentation will be gone through line by line to make sure it conforms with the loan program guidelines and there isn’t something that is missed.  During this process you can see the underwriter going through the following:

  • 60 days of bank statements with all pages submitted even if they are blank
  • Most recent 30 days of pay stubs
  • All documents dealing with Bankruptcy, Short Sale, or Foreclosures
  • Child Support or Alimony documents
  • 2 years of W2s
  • 2 years of tax returns
  • Proof of citizenship

Some borrowers may be concerned with the FHA Underwriting guidelines but you should know that all borrowers will go through this and that it is always in the best interest of lenders to work with borrowers to try and get loans approved.  Here at Mortgage Scenarios with Fairway Independent Mortgage Corporation NMLS# 2289 I want to make sure I do everything I can within the FHA Underwriting guidelines to get you that approval you deserve.  If you are confused or have additional questions about anything, please let me know ASAP and we can get to work for you!  I can be reached any time, day or night at 630-465-2656 or you can fill out an application here.

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