Issue: Q&A – September 25, 2019

Acceptable Land-to-Dwelling Ratio – Fannie Mae

Question:  What is the acceptable land-to-dwelling ratio for homes on large acreage properties? Answer: Neither agency enforces nor even implies that there is a specific land-to-dwelling ratio, but they do talk about how the neighborhood is ‘built-up’, which really means the appraiser should be looking at the percentage of available land in the neighborhood, not […]

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Gift Funds as Reserves

Question: Does any program allow gift funds to be used for required reserves? Answers: Both Fannie Mae and Freddie Mac allow gift funds to be used as reserves. VA does not allow gift funds to be used as reserves. FHA will allow gift funds to be used as reserves but ONLY if the loan is […]

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Termite Inspections in Texas or Other States

Question: On a VA loan for a property in Texas, is the Veteran allowed to pay for the termite inspection that is required? Allowable State Fees and Charges – VA Answer: VA maintains a ‘special fee deviation’ for each state. In this list you’ll see that TX has a fee deviation that does allow the […]

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Per Diem Used as Income on an FHA Loan

Question: Are there any circumstances where FHA will allow Per Diem income to be used? Answer: Unfortunately, FHA does not consider per diem payments as income, nor does the IRS. They are considered a reimbursement to cover additional expenses incurred by an employee, not actual income to the employee that is available as repayment income for monthly liabilities and […]

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Can line 13 on Schedule E be added back in to calculate rental income?

Question: Can line 13 on Schedule E be added back in to calculate rental income? If so, since it is not listed as mortgage interest on line 12, do you need a 1098 to prove it was mortgage interest? Answer: Rental income calculations are different depending on whether the income is from the subject property or […]

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