Issue: Q&A – May 25, 2017

USDA Owes Back Taxes: When a client still owes Federal taxes from prior year(s, are payment plans allowed for USDA, and is there a minimum number of months payments need to be made?

Answer: Yes. The IRS tax debt must be counted against the borrower. USDA borrower can buy a home even if they owe back taxes. However, a payment plan to the IRS must be in place. Applicants who have an IRS tax debt are ineligible if a repayment plan is not underway. The applicant must have made […]

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FHA Business Debt: What are FHA’s rules on how to treat business debt when the company is paying the monthly payment?

Answer: Business debt paid by the borrower’s business can be disregarded in the borrower’s DTI in certain circumstances. See the guideline below: 4000.1, II, A, 4, b, iv (P) Business Debt in Borrower’s Name (TOTAL) (1) Definition:  Business Debt in Borrower’s Name refers to liabilities reported on the Borrower’s personal credit report, but payment for […]

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FHA R-1 Visa: A borrower’s R-1 Visa expired in Dec. 2016. She has submitted her application for renewal and says that her attorney says she is authorized to work even though the R-1 visa has expired. Will she be able to get an FHA loan?

Answer: FHA leaves the burden on the lender to make the final determination of whether or not the borrower is eligible to live and work in the U.S. In this case I believe that the renewal application and letters from the attorney and employer would probably document the file in a satisfactory manner, but again, […]

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FHA Real Estate Agent as Lender: Can a real estate agent also be employed by an FHA approved lender?

Answer: Highlighted below is the handbook reference for the guideline that allows real estate agents to also work for an FHA-approved lender. Does FHA treat holding a professional license in real estate as dual employment? No, FHA does not prohibit anyone from holding a vocational or professional license. The lender must require its employees to […]

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FHA Resold Property: What is FHA’s rule on resold property occurring between 91 days and 180 days after acquisition?

Answer: Below is the full guideline for your reference. 4000.1 II.A.1.b.iv.(A)(3) Resales Occurring Between 91-180 Days After Acquisition: A Mortgagee must obtain a second appraisal by another appraiser if: the resale date of a property is between 91 and 180 days following the acquisition of the property by the sellers; and the resale price is 100 […]

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