Confused FHA Automated vs. Manual

[MichiganMommy]

Hello Fico Family,

Since joining the forum, I have not missed a day! This is the only thing keeping me sane.

Sometimes I get confused though. So, I would like to seek clarification.

1. What is needed for automated FHA approval?
2. What is needed for manual FHA approval?
3. Which one is easiest?
4. What is the advantage or disadvantage of both?

I understand the difference between them AND that most LO will run you through automated first, but beyond that, I am little confused.

Thanks everyone!

[Anonymous]

---

MichiganMommy wrote:

Hello Fico Family,

Since joining the forum, I have not missed a day! This is the only thing keeping me sane.

Sometimes I get confused though. So, I would like to seek clarification.

1. What is needed for automated FHA approval?
2. What is needed for manual FHA approval?
3. Which one is easiest?
4. What is the advantage or disadvantage of both?

I understand the difference between them AND that most LO will run you through automated first, but beyond that, I am little confused.

Thanks everyone!

---

Yeah...what she said! This completely baffles me as well!

[DallasLoanGuy]

MichiganMommy wrote:

Hello Fico Family,

Since joining the forum, I have not missed a day! This is the only thing keeping me sane.

Sometimes I get confused though. So, I would like to seek clarification.

1. What is needed for automated FHA approval? You need to pass FHAs Total Scorecard which grades credit and dti along with assets and length of employment, ect.
2. What is needed for manual FHA approval? strict adherence to loan guidelines regarding debt ratios and credit.
3. Which one is easiest? automated is easiest if you get it. it allows you to go over published debt ratios and can approve regardless of the last 12 month's history
4. What is the advantage or disadvantage of both?
   automated advantages: fast, higher ratios, no explanation of credit, ect
   automated disadvantages: none, if approved.
   manual advantages: can approve  file that was not approved by automated. usually. automated will refer to manual for files that it is uncomfortable approving.
   manual disadvantages: slower. strict adherence to dti and credit guidelines

I understand the difference between them AND that most LO will run you through automated first, but beyond that, I am little confused.

Thanks everyone!