Homestar Financial Corporation FHA Case Numbers: Minimum Required EMPLOYMENT For Borrowers with employment gaps of six months or more ( extended absence ), the Mortgagee may consider the Borrower s current income as Effective Income if the following can be verified and documented: (1) The borrower has been employed in the current job for at least six months as of the date of the case number assignment; and (2) A two year work history prior to the extended absence from employment, using standard or alternative employment verification. Verbal VOE: Must provide all VOE s for the two year history if current employment is less than 6 months. For a gap of > 6 mos., provide any of the following current paystub and w2 s; 1009s; transcripts for training and education; personal tax returns if self employed; see OTHER SOURCES OF EFFECTIVE INCOME in 4000.1 for specific documentation verification. Can proceed *Cannot proceed at current time CREDIT Chapter 7 Bankruptcy The date of the borrower s bankruptcy discharge, as reflected on official bankruptcy documents, must be no less than two years from the date of the case * If bankruptcy discharged less than two years, no case number may be obtained at this time. *NOTE: FHA guidelines do allow for exceptions under Extenuating Circumstances. Underwriting approval must be obtained prior to case Credit report or official bankruptcy documents verifying bankruptcy discharge date; FraudGuard acceptable if the date of bankruptcy discharge is disclosed on the report. Can proceed *Cannot proceed at this current time 1
CREDIT Chapter 13 Bankruptcy As of the date of case number assignment, at least 12 months of the payout period must have elapsed according to the official Chapter 13 payout plan. If borrower(s) remain under a current Chapter 13 payout plan, the most recent 12 months payment history must be provided. Can proceed * Cannot proceed at this time CREDIT Foreclosure/Short Sale/Deed in Lieu of Foreclosure As of the date of case number assignment, the transfer of title must have been more than three years prior. * If the transfer of title date is less than three years prior, no case number may be obtained. *NOTE: FHA guidelines do allow for exceptions under Extenuating Circumstances. Underwriting approval must be obtained prior to case Credit report must verify the date of the transfer of title. If the credit report does not verify this date, the foreclosure deed, short sale deed, or Deed in Lieu of Foreclosure must be provided. FraudGuard acceptable if the date of title transfer is disclosed on the report. Can proceed *Cannot proceed at this time 2
PROPERTY The eligibility of a Property for a Mortgage insured by FHA is determined by the time that has elapsed between the date the seller has acquired title to the Property and the date of execution of the sales contract that will result in the FHA insured Mortgage. A Property that is being resold 90 Days or fewer following the seller s date of acquisition is not eligible for an FHAinsured Mortgage. *NOTE: See RESTRICTIONS ON PROPERTY FLIPPING in the 4000.1 for possible EXCEPTIONS TO TIME RESTRICTIONS. RealQuest Property History Report; Deed; Settlement Statement; closing Disclosure; Fraudguard; title report; other similar public record data. Can proceed * Cannot proceed at this time REFINANCE General Eligibility At least one Borrower on the refinance loan must hold title to the property being refinanced prior to the date of the case number assignment. Deed; RealQuest Property History Report; Fraudguard; closing disclosure; Settlement Statement, or other similar public record. Can Proceed Cannot proceed at this time REFINANCE Property Eligibility For Properties acquired by the Borrower within 12 months of the case number assignment date, the Adjusted Value is the lesser of: the Borrower s purchase price, plus any documented improvements made subsequent to the purchase; or the Property Value. 3
Properties acquired by the Borrower within 12 months of case number assignment by inheritance or through a gift from a Family Member may utilize the calculation of Adjusted Value for properties purchased 12 months or greater. For properties acquired by the Borrower greater than or equal to 12 months prior to the case number assignment date, the Adjusted Value is the Property Value. The maximum LTV for a Rate and Term refinance is: 97.75 percent of adjusted value for Principal Residences that have been owner occupied for previous 12 months, or owner occupied since acquisition if acquired within 12 months, at case number assignment; 85 percent for a Borrower who has occupied the subject Property as their Principal Residence for fewer than 12 months prior to the case number assignment date; or if owned less than 12 months, has not occupied the Property for that entire period of ownership HUD 1 Settlement Statement, Closing Disclosure, prior sales contract, Utilities to provide owner occupancy; Inheritance documentation. Can proceed Cannot proceed at this time N/C Manufactured Home Eligibility New Construction Manufactured Home must have been permanently erected on a site for more than 12 months prior to the date of the case Existing Construction Manufactured Home must be permanently installed on a site for one year or more prior to the case number assignment. Structural Engineer report; CO Can proceed Cannot proceed 4
CASH REFINANCES Payment History CASH OUT REFINANCE The Borrower must have made all payments for all their mortgages on time for the 12 month period prior to the case number assignment, or must have made all payments for all their mortgages on time since the Borrower obtained the mortgages, whichever period is less. The payments for all mortgages secured by the subject property must have been paid on time for the month prior to mortgage disbursement. Properties with mortgages must have a minimum of six months of Mortgage payments. Properties owned free and clear may be refinanced as cash out transactions CASH OUT Credit report. If the mortgage on the subject property is not reported on the Borrower s credit report or is not in the name of the Borrower, the mortgagee must obtain a Verification of Mortgage (VOM) OR 12 months cancelled checks, bank statements, or other documentation to evidence that all payments have been made on time by the Borrower for the previous 12 month period. Can proceed Cannot proceed 5