Q&A Issues

Fannie Mae & Freddie Mac – Occupancy Rule: I have a married couple where one is relocating for work and the spouse will be renting in their current town where he is employed until he finds a job in their new hometown. Will this be an occupancy issue with a minimum 3% down file?

Answer: The short answer here is that you can do this loan either Fannie or Freddie and as long as the loan is done through DU or LPA and is not manually underwritten. Only one of the borrowers needs to occupy the property for it to be considered a Principal Residence.  (The whole non-occupant co-borrower [...]

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

VA – Co-Signed Car Loan: If my borrower can prove that he does not pay for a co-signed debt, am I able to ignore that debt?

Answer: VA does allow for debts to be ignored in certain cases. (See the guideline below.) Expect an underwriter to require at least a 12-month history of payments from the holder of the loan in order to consider ignoring the debt. Reference: VA Lenders Handbook Ch. 4, 5-d: Applicant as Co-obligor on Another’s Loan (04/10/09) [...]

2017-12-28T12:47:35-05:00December 28th, 2017|

FHA – Salary + Commission Income: If a borrower receives salary + commission, can I use the commission income if the commission received is less than 1 year?

Answer: The instructions for how to calculate the commission income are explained below in the FHA guideline. However, the minimum is one year provided that the borrower is in the same or similar line of work and is reasonably likely to continue. It will be up to you and your underwriters to determine what the [...]

2017-12-28T12:46:53-05:00December 28th, 2017|

FHA – Escrow Repair: Can the sales price be increased when there is a required repair for which the seller and buyer do not have the funds to complete?

Answer: FHA will allow the increase to the sales price for the repair escrow and FHA specifically allows repair escrows in this type of situation (see guideline below). However, I must warn you that many underwriters, and the investors they work for, believe that sales price increases after an appraisal has been completed are not [...]

2017-12-28T12:45:37-05:00December 28th, 2017|

FHA – Identity of Interest: Is an employee/employer relationship considered an identity of interest?

Answer: Yes. However, FHA does allow a few exceptions to the LTV limitation for certain employer/employee transactions. See the full guideline below. Reference: 4000.1, II, A, 2, b, ii (A) LTV Limitations Based on Identities of Interest (1) Definitions: An Identity-of-Interest Transaction is a sale between parties with an existing Business Relationship or between Family [...]

2017-12-28T12:44:42-05:00December 28th, 2017|