FHA loans used to be 2% of all loans originated but in the second quarter of 2008, over 60% of all loans are FHA. Any loan officer that wants to survive today must be fully educated on how to originate FHA loans. Lack of knowledge can hurt productivity and profitability.
If you are a mortgage company owner, you need your loan officers to have a thorough education to ensure quality control, compliance and good service to your borrowers. Loan officers who lack education could potentially even
jeopardize your company's HUD designation, which would be
devastating to any company because of how vital HUD approval is now.
Originating FHA loans can be confusing for even the most experienced loan officers if they have not previously had FHA experience.
211 pages, 16 chapters, with 8 Exhibits which includes worksheets for purchase and refinance FHA loans.
Similar extensive FHA training programs sell for up to $500.
This training manual on FHA loans comprehensively presents all the subjects on originating and qualifying prospective loan customers for FHA Loans. FHA subjects are presented in a sequential manner - going from the simple to the more complex while building on the information in previous chapters.
How to qualify and calculate the maximum base loan amounts for the different types of FHA loans is fully presented with worksheets to assist loan officers when working on their FHA loans. An entire chapter is devoted to FHA's Secure Loan Program and FHA's new Risk-Base Premiums rules which became effective July 14, 2008. Besides being a current training manual, it also provides an excellent reference resource for new and experienced loan officers.
In "The Loan Officer's FHA Loan Manual," you will learn....
1. The Federal Housing Administration:
The history, goals, policies, and programs of the Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD) and their impact on home ownership in our country.
2. Common FHA Loan Terms:
Common FHA loan terms are defined and how those terms are used in originating and processing FHA loans.
3. Eligible Borrowers and Properties:
The different type of eligible borrowers is discussed including nonprofit organizations and State and local government agencies. The occupancy status of residences and their underwriting guidelines. Also, the many and different types of FHA-eligible properties is presented with their requirements and underwriting guidelines for each. Includes a discussion on investment properties.
4. Types of FHA Loans:
First, this chapter presents the different types of FHA loan transactions and the suggested FHA programs available for each. Purchase Transactions: purchase, rehabilitation and construction loans. The Refinance Transactions: cash-out, no cash-out, streamline refinances, and reverse mortgages. Secondly, fifteen FHA-insured mortgage products are presented from Section 203(b) to Section 255. Also includes a discussion on secondary financing.
5. FHA Secure Loan Program:
Originating and qualifying borrowers for FHA's Secure Loan program. What to do when there is not enough equity in the subject property to finance everything into the 1st mortgage: Subordinate Financing. Includes the new underwriting guidelines that took effect July 14, 2008.
6. Loan Closing Costs and Fees:
Allowable non-recurring closing costs for FHA loans are fully presented with the LTV percentage factors for high and low closing cost states. High and low closing cost states are listed with the statutory maximum loan limits for each.
7. Maximum Base Loan Amounts:
The steps involved in calculating the maximum base loan amounts for the different types of FHA loan transactions with worksheets (exhibits) for each: purchases and borrower's minimum down payment, refinances (cash-out and no cash-out), streamline refinances (with an appraisal, without an appraisal, credit qualifying, and non-owner occupied properties), and FHA's Construction-Permanent mortgage program. Includes a discussion on transactions that can affect maximum mortgage calculations.
8. FHA Mortgage Insurance:
The purpose and benefits of FHA mortgage insurance. Determining the correct upfront mortgage insurance premiums (UFMIP) and monthly mortgage insurance premiums (MIP) for the different types of FHA loans using FHA's new risk-based premium structure that went into effect July 14, 2008. Includes a detailed discussion on calculating the MIP refunds for FHA-to-FHA loan transactions.
9. Energy-Efficient Improvements:
Describes what qualifies as energy-efficient improvements and their underwriting guidelines and documentation requirements when financed into an FHA loan.
10. Loan Assumption:
Historical and current loan assumptions for FHA loans and the requirements for those FHA loans that are assumed.
11. FHA Loan Forms and Disclosures:
Those originating loan forms and disclosures that are peculiar to FHA loans are presented with the purpose of each. Examples of each are shown within Exhibit V.
Qualified appraisers and requirements for FHA appraisals and eligible properties for an FHA loan. Procedures to be followed when there are required repairs to the subject property. When a second appraisal is required, who may perform this appraisal, and the originating and underwriting guidelines for each: This became effective April 1, 2008.
13. Originating FHA Loans:
The many benefits of originating FHA loans (versus conventional loans) as well as calculating the loan customer's funds-to-close on purchase transactions.
How the current automated underwriting systems came into being with what Fannie Mae identified as loan customer's primary and contributory risk factors or layers of risk. Researching the various online resources to determine if the prospective FHA loan customer is eligible for an FHA loan: HUD's limited denial of participation (LDP), U.S. General Services Administration (GSA), and the Credit Alert Interactive Voice Response System (CAIVRS). FHA's new risk-base premium structure and its impact on credit scoring and loan's LTV on FHA loans (FHA streamline refinances and FHA's secure loan program are excluded).
15. Qualifying Your Borrowers:
Presented in this chapter are the four main areas of prospective FHA loan customers that are reviewed and evaluated in determining if a customer qualifies for their requested and submitted FHA insured home loan:
credit, income, residence and liabilities. The different and many types of acceptable sources for fund-to-close are discussed. Also those compensating factors of the borrower and/or subject property that should be mentioned when submitting a loan file.
16. Supporting Income Documents:
This final chapter presents the different types of employment and income sources with the required documents for each - assuming it is a full-doc loan. Also, based upon that income source - how to calculate the effective gross monthly income for the borrower. A section is provided for self-employed borrowers with definitions and document requirements for each type: sole proprietor, partnership, corporation and limited liability company. Also, the many "other" acceptable income sources with the underwriting guidelines and document requirements for each: child and/or spousal support, Social Security, rental income, dividends or interest income, trust income, mortgage credit certificates (MCC), veterans benefits and government assistance programs.
- Purchase Loan Amount Worksheet
- No Cash-Out Refinance Worksheet
- Streamline Refinance - With an Appraisal Worksheet
- Streamline Refinance - Without an Appraisal Worksheet
- FHA Forms and Disclosures
- Mortgage Credit Analysis Worksheet (HUD 92900-PUR)
- Mortgage Credit Analysis Worksheet (HUD 92900-WS)
- FHA Loan Underwriting and Transmittal Summary (required as of 10/1/08)
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