New Rules - FHA Changes rules for Self Employed borrowers ROUND 2

By
Mortgage Banker with and for 1st Time Buyers, Move Up Buyers & Investors 207897nmls# DOC#207897
http://actvra.in/xZg

FHA Changes rules for Self Employed Borrowers ROUND 2

Documentation Requirements for Self-Employed Borrowers – Effective for all case numbers ordered on or after April 1, 2012.

1.        All FHA files for self-employed borrowers require a YTD P&L AND Balance Sheet for every business covering the time from the last files tax return to the end of the most recent quarter – NO EXCEPTIONS

2.       Annual earnings that are stable or increasing are acceptable. Earnings reflecting a significant decline in income over the analysis period (25% or more) are not acceptable for use, even if the current income and debt ratios meet FHA guidelines.

3.       Also, please note that FHA still will not allow the add-back of expenses for business use of home when calculating Schedule C income.

 

I hope this helps to clarify the new requirements. Call me anytime for the latest info as it hapend and sometimes before it happens!

Thanks for stopping by and reading my blog: FHA Changes rules for Self Employed Borrowers -ROUND 2

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Re-Bloggged 3 times:

Re-Blogged By Re-Blogged At
  1. April Tammarine 03/27/2012 10:33 PM
  2. Pat Homan 03/28/2012 12:39 PM
  3. Pamela Jackson 04/10/2012 01:55 PM
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Ambassador
1,304,552
Jon Zolsky
Selling Daytona paradise for heavenly good prices
Daytona Condo Realty, 386-405-4408

Mark - it looks like investors can be better off with not FHA loans. It is dificult, but it is difficult with FHA as well

March 27, 2012 11:11 PM
Rainmaker
563,794
Kathy Sheehan
Movement Mortgage 770-634-4021

Self employed borrowers are a bit more challenging when it comes to the pre-qualifications

March 28, 2012 05:45 AM
Rainmaker
485,175
Curtis Van Carter
Napa Valley's Broker Extraordinaire in Yountville
Coldwell Banker Brokers ofthe Valley, Yountville Napa Valley

Mark

I just lost a deal do to one of these new rules for self employed parents who were going to co-sign for their son. Thanks for pointing them out, cheers cvc

March 28, 2012 12:03 PM
Rainmaker
692,485
Juli Vosmik
Scottsdale/Cave Creek, AZ real estate 480-710-0739
Dominion Real Estate Partners, LLC, Scottsdale, AZ

Mark, please tell me those P & L's don't need to be audited.  

March 28, 2012 02:52 PM
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Mark Taylor

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