If you weren't aware, FHA is coming out with a revised underwriting manual on 6/15/15. Currently Handbook 4155.1 is used, and while there are minor tweaks every now and then, for the most part it's remained pretty similar throughout the years. However on 6/15/15 the new Handbook 4000.1 (not sure why it's a lower number) is going into effect, and I've noticed some bigger changes (haven't gone through every section yet), one of which is a change in deferred obligations (including student loans).
(G) Deferred Obligations (TOTAL)
Deferred Obligations refer to liabilities that have been incurred but where payment is deferred or has not yet commenced, including accounts in forbearance.
The mortgagee must include deferred obligations in the Borrower’s liabilities.
(3) Required Documentation
The mortgagee must obtain written documentation of the deferral of the liability from the creditor and evidence of the outstanding balance and terms of the deferred liability. The mortgagee must obtain evidence of the anticipated monthly payment obligation, if available.
(4) Calculation of Monthly Obligation
The mortgagee must use the actual monthly payment to be paid on a deferred liability, whenever available.
If the actual monthly payment is not available for installment debt, the mortgagee must utilize the terms of the debt or 5 percent of the outstanding balance to establish the monthly payment.
For a student loan, if the actual monthly payment is zero or is not available, the mortgagee must utilize 2 percent of the outstanding balance to establish the monthly payment.
"Mortgagee" means the lender.
This means if you are planning on applying for an FHA loan and have deferred student loans (or other deferred obligations) that would disqualify you if their payment was included in your debt ratio, you should get moving sooner rather than later, or adjust your plans to get qualified for a mortgage.
This is effective for new FHA case numbers on/after 6/15/15. To get an FHA case # you need to submit an application and also have either an address (refinance) or an accepted purchase contract (purchase).
So.... apply and get a case # prior to June 15th and even if you close after June 15th you are fine.?
Correct, just need to get an FHA case # prior to then, and you can close after then.
Can you guys provide some insight into aquiring a case #.
Is one given when you simply apply?
How long is it usually good for?
For instance, if I get one in June, how long is it good for?
It says you have to have an application and an accepted purchase contract to get a number, so your number would be good for however long it took you to close on your house. You can't get a number first and then start shopping.
I think the case number is valid for 6 months unless the appraisal expires before that time. Someone correct me if i'm wrong.
Hello! I have been lurking on these forums for quite some time now and was hoping for some clarification on this post. I recently began the footwork for the pre-approval process fpr a mortgage. I wanted to go FHA because I have large amounts of student loans and am in school for my doctorate. I brought this post and the linked handbook to my mortgage loan officer's attention. He looked into it and told me that his senior underwriter said there are NO changes being made to deferred student loans and that I could take my time before I formally apply for pre-approval. This is from a very reputable mortgage company in my area. Also, when I was at an open house a realtor said that these are proposed changes but haven't been approved/probably won't go through. Could anyone tell me if this is the case? I really wanted to buy late summer (August-September) but will get creative to make it happen before June 15th if I really need to. Student loans will severly limit how much I will qualify for and I really need to know. Thank you so much.
So, my husband and I were in the same situation. We were looking into building a home in the later part of this year when the loan officer stated that if we do not start the build and get a case number by the 15th of June, we would no longer qualify due to our school loans.