Q&A – January 25, 2019

VA – Married Veterans – Combining Eligibility: If a married couple are both Veterans, can we combine their eligibility for high-cost areas to lower the down payment?

Answer: Unfortunately, no.  VA has a set 25% maximum guaranty of the area loan limit per LOAN, not per entitlement used.  So even though you may split the entitlement used between two veterans, the amount of down payment required doesn’t change. Social Media Post: VA does not allow two married veterans to combine their eligibility [...]

2019-01-25T08:30:25-05:00January 25th, 2019|

Fannie Mae – Cash-Out Refinance LLC: If a client who owned a property free and clear under his LLC company for a year, can he do a cash out refinance under his LLC company?

Answer: If the property was owned prior to closing by a limited liability corporation (LLC) that is majority-owned or controlled by the borrower(s), the time it was held by the LLC may be counted towards meeting the borrower’s six-month ownership requirement. The issue is that you would need to transfer title from the LLC to [...]

2019-01-25T08:36:48-05:00January 25th, 2019|

Fannie Mae & Freddie Mac – Earnest Money Deposit Proof of Funds: Does Fannie or Freddie require copies of the earnest money deposit check and proof of the funds withdrawn from the clients account?

Answer: Freddie Mac: 5501.3: Asset eligibility and documentation requirements (12/09/18) Earnest money deposit (EMD) When an EMD for a purchase transaction is used to qualify the Borrower for the Mortgage transaction, the Seller must obtain evidence that the EMD check cleared the Borrower’s account (e.g., copy of the canceled check, asset account statement or written statement from the EMD holder verifying receipt [...]

2019-01-25T08:37:25-05:00January 25th, 2019|

FHA – Non-Union Carpenter – Various Jobs: Will FHA accept a borrower that is a carpenter that has multiple employers over a two-year period and receives a W2 when he completes a job?

Answer: This will be an underwriter’s call, but I think that your borrower would fall into the ‘no additional analysis needed” exception cited below in the FHA guideline regarding frequent employment changes, even though he’s not a union member. You will also need to determine whether or not the income is hourly or commission because [...]

2019-01-25T08:36:31-05:00January 25th, 2019|

VA – Debts Paid Down to 10 Months or Less: Will VA allow for a car purchase loan to be paid down to less than 10 payments, in order to exclude the payment?

Answer: Two things to keep in mind with this scenario: VA has no prohibition against paying down a debt to have a remaining term of <10 months, and VA leaves it up to an underwriter’s judgement to decide if ANY debt, regardless of a short remaining term, should be included in the DTI calculation if [...]

2019-01-25T08:29:00-05:00January 25th, 2019|