Q&A - June 25, 2016

Verifying Gift Funds – Closing: If gift funds are wired directly to the title company, do I need another bank statement from the donor?

[Download Mortgage Talking Points™, Shake the Money Tree – Little-Known Sources of Gift Funds ]Answer: My personal experience with FHA auditors is that FHA wants to verify the DONOR’S source of funds as well as the borrower’s. The green highlighted portion of the 4000.1 guideline (which is below) states the requirement in a slightly clearer [...]

2018-12-16T12:46:50-05:00November 3rd, 2017|

Rental to Purchase Requirements: Can a person use FHA financing to purchase a home they are currently renting?

Answer: Yes. But this is considered an ‘Identity of Interest’ transaction because of the landlord/tenant relationship. These types of transactions are limited to 85% LTV unless the buyer can document that they have been renting the property for 6 months PRIOR to the sales contract. If this is documented, then the loan can be done [...]

2017-12-27T12:40:14-05:00November 3rd, 2017|

Child Support Income: Can you gross up child support income on an FHA loan?

Answer: As long as you can show that an income is non-taxable, you follow the ‘gross-up’ rules. This is usually documented from past tax returns or IRS tax regulations on that type of income. FHA stills allows a lender to gross up non-taxable income to assist the borrower in qualifying for a loan. Copyright – [...]

2017-12-27T12:40:14-05:00November 3rd, 2017|

Use of Rental Income – No Rental History: Can we use rental income for a recent purchase with no reported 1040 rental income?

Answer: The leases must be in place, but they do not have to have the history. Get the recently executed leases. You may also be asked to get evidence that security deposit and/or first month’s rent has been received. Fannie and Freddie allow the use of Rental Income on recently purchased property. Copyright – 2016 [...]

2017-12-27T12:40:14-05:00November 3rd, 2017|