FHA underwriting guidelines are what FHA approved lenders use to either approve or deny your loan. While this list is not meant to be an all-encompassing list of FHA guidelines and requirements, it will give you a good idea of what underwriters are looking for with respect to FHA guidelines.

2. FHA Loan Guidelines: Required Documentation
One of the most important parts of the process is gathering the
required documents. Here are some of the most important
documents to get you started:
Uniform Residential Loan Application (URLA)
Loan Underwriting and Transmittal Summary
SSN Verification
Credit Report
Verification of Deposit (VOD)
Verification of Employment (VOE)
Federal Income Tax Returns

3. Sales Contract
Appraisal Report
Real Estate Certification
Amendatory Clause
Verification of Rent or Payment History on Past/Previous
Mortgages
Uniform Residential Appraisal Report (URAR)
Explanatory Statement
Borrower Authorization for Verification of Information

4. FHA Loan Guidelines:
Employment and Income
Effective Income
FHA loan guidelines call for the evaluation of the source of a
borrower’s income to ensure that it can be verified, that it is
stable, and that it has a high likelihood to continue.

5. Verifying Employment History
FHA does not put restrictions on the type of employment that a
borrower has. However, FHA loans do require that a borrower has
at least two years of employment history. In case there are any
gaps that last for at least a month, the borrower must provide an
explanation and supporting documents.

6. Self­Employed Borrowers
One is considered self­employed if he has at least 25%
ownership in a business. To show stability, the ideal minimum
length of self­employment to be considered for an FHA loan is
two years. Prior to the self­employment, the borrower should have
at least two years of work experience in the same line of work.

7. Other Forms of Income
Examples of these forms of income include the following:
Overtime and bonus income
Part­time income
Seasonal employment income
Commission income
Retirement income
Social security income

8. FHA Loan Guidelines:
Qualifying Ratios
The purpose of the qualifying ratio is to determine if the
borrower can afford the home together with the family’s cost
of living expenses. There are two important numbers that the
lender must calculate. These include:
Mortgage Payment Expense to Effective Income ratio
Total Fixed Payment to Effective Income ratio

9. Finding the
Best FHA Lender
BestFHALender is a one­stop shop offering useful
information about FHA loans and enabling customersto
shop for multiple lenders.
CLICK HERE
TO LEARN MORE

10. Information Provided by
Justin Mchood
He is Americas Mortgage Commentator
and has been providing Mortgage
commentary for over 10 years

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