Big Changes FHA Mortgage Rules 2015

While Fannie Mae moves some of their guidelines toward Easy St, FHA is tugging theirs into the Matrix.  In fact, FHA tightened and clarified many of its guidelines in September 14, 2015.

After combing through 100 pages of FHA’s changed rules and regs I could see 3 distinct categories of change:

1. Clarified previously vague qualifiers or measurements
2. Actual guideline changes
3. Changed wording

While many of the 100 pages of FHA changes are not critical, some of them will hit borrowers square between the eyes.  Let’s take a look the key changes to FHA mortgage regulations in 2015:

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Team@JeremyHouse.com
602.435.2149

FHA 2015 Mortgage Changes

First of all, an FHA home loan is still an excellent option for many home-buyers.  However, the changes below change how FHA loan guidelines look and feel.

Wording Changes

1. FHA Streamlines now called “Simple Refinances”
2. Streamline 203k Loans now called “Simple 203k Loans”
3. Non Purchasing Spouse now called “Non Borrowing Spouse”

Qualifier/Measurement Clarifications

1. A concurrent FHA mortgage due to relocation requires borrower move at least 100 miles to obtain
2. Installment debt payments with less than 10 months left are omitted when payment equals 5% or less of gross income
3. Gift fund donors can not be cousins
4. Appraisal transfer required within 5 business days of request from initial lender to new lender

Guideline Changes

1. Waiting period post foreclosure, short sale, bankruptcy & deed in lieu is based on FHA case number date
2. Earnest money deposits over 1% of the sales price documented by the lender
3. Non taxable income grossed up 15% max
4. Self-employment income decreasing over 20% year to year require a manual underwrite
5. Overtime income decreasing over 20% year to year requires further underwriter review
6. Deferred student loan payments counted as debt
7. Alternative credit requirements determined by Automated system
8. Authorized user accounts treated like co-signed loans
9. More aggressive child support guidelines
10. More aggressive guidelines for hourly borrowers with varying hours

Apply now for an FHA Loan
Team@JeremyHouse.com
602.435.2149

In conclusion, FHA effectively tightened their guidelines in 2015.  Most important is to find a loan officer that is up to date on the changes.

By Jeremy House