Effective today, September 14, 2015 there is a new FHA Handbook and guidelines have changed dramatically!
There are some MAJOR changes that lenders, appraisers, and buyers must learn about now. This will affect any buyer that does not have a case number already assigned to a property they are purchasing. Any potential buyer that has been pre-qualified/ pre-approved/ approved should reach out to their lender immediately to see if these changes will impact their home buying potential.
Some of the important changes are listed below but make sure to reach out to your lending partners for specifics regarding the leads you have working with them:
- Student loans that are deferred can no longer be excluded (used to be if they were deferred for at least 12 months you can exclude them)
- Vacating a primary residence and using rental income can no longer be done unless you prove the buyer is moving at least 100 miles from the residence they plan to rent out/vacate
- Income – there are major changes to hourly income, bonus/overtime income, and commission income
- GIFT FUNDS – This is VERY important and every buyer you have that will be going FHA that might use gift funds must contact their lender immediately, the documentation is different and more strict than before
A few positive changes:
- Judgments – believe it or not, this is one guideline that got easier, not harder. If the buyer has a judgment, they do not need it paid in full/satisfied if they can show a payment plan has been arranged and that they have been making timely payments on it for at least 3 months.
- Voluntary Alimony and/or Child Support – you no longer need written legal agreements regarding child support and alimony. With proper documentation using cancelled checks, one can use alimony/child support even if it is voluntary.