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

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Mortgage and Lending with and for 1st Time Buyers, Move Up Buyers & Investors 207897nmls# DOC#207897
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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-Blogged 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
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

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

Mar 27, 2012 11:11 PM #1
Rainmaker
566,428
Kathy Sheehan
First Guaranty Mortgage Corporation 770-634-4021 - Atlanta, GA
Senior Loan Officer

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

Mar 28, 2012 05:45 AM #2
Rainmaker
640,940
Curtis Van Carter
Coldwell Banker Brokers of the Valley, Yountville Napa Valley - Yountville, CA
Napa Valley's Broker Extraordinaire in Yountville

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

Mar 28, 2012 12:03 PM #3
Rainmaker
756,442
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

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

Mar 28, 2012 02:52 PM #4
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