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Announcement 2018-109 FHA Updates

Based upon an ongoing evaluation of our guidelines, New Penn Financial has updated FHA guidelines to remove or modify current overlays, and add further guidance.

Changes are effective immediately for all pipeline and new registrations/locks. Below is a summary of the changes.

  • Manual underwriting is now permitted
  • Compensating factors are required for credit scores less than 600 (previously less than 620)
  • Mortgage history requirements will follow FHA Handbook 4000.1
  • Ineligible Borrowers has been updated to remove co-signers and co-guarantors, and add borrowers with Deferred Action for Childhood (DACA) approval
  • Structural modifications or alterations on manufactured homes will be permitted according to FHA Handbook 4000.1
  • Properties listed for sale on cash-out loans now aligns with rate and term, and the listing must have been cancelled prior to application
  • Tax transcript requirements have been updated to remove the requirement for transcripts when borrower receives >25% commission, or is employed by family and guidance has been added for borrower provided transcripts
  • Credit inquiry explanations will be needed for inquiries in the last 90 days (previously 120 days)
  • Prior mortgage credit rejects (MCRs) no longer require mitigation, but must be listed on the 92900-LT
  • Revolving debt may be paid off at or before closing, and revolving and installment accounts are not required to be closed when paid off
  • Ineligible Assets has been updated to include Cryptocurrency (i.e. Bitcoin)
  • E-signatures are allowed for all documents except final closing documents (i.e. Note, Mortgage, final 1003)
  • Escrow holdbacks now align with FHA Handbook 4000.1

 

Please reference the Product Matrices page for full details of the changes outlined in this announcement.