FHA loan and bank statements?

[Anonymous]

I’ve lurked and read for a long time but now have my preapproval and made an offer today. However I’m kind of in panic mode and have a question -

Income 94k
Low debt other then 700 month student loan (about 5k in credit cards, and a car payment of 410 a month)
Middle score 646
First time buyer FHA
Loan will be 219k
1-2 collections on each credit report. One is paid and one is not (300.00 so I could but I’m irritated at it)

So when I was submitting my bank statements there are a few times when I had “overdraft protection” because money was moved from my savings to cover when bills came in at other times then I expected.

I read that if there are overdraft fees it can go into manual underwriting - does this count? No overdrafts, but overdraft protection from my other accounts.

And if it does go into manual underwriting what does that mean? Should I be concerned.

I’m super anxious now! Is this going to be denied?

[ShanetheMortgageMan]

With FHA financing, overdrafts don't automatically mean it's downgraded to a manual underwrite.  There may be lenders who have overlays, but it's not an FHA guideline, that'd be a specific lender guideline.  Flagstar at one point had that in their guidelines, but I don't think they have it any longer.  Definitely something you should ask up front though, because they are going to see your bank statements anyway so may as well get ahead of it.

FHA loans only need to be manually underwritten if they do not get an "Accept" response from FHA TOTAL, which is FHA's automated underwriting system, or if there is any of the below circumstances.  

[Anonymous]

Ok, so that makes me feel a bit better... I already sent my bank statements to lender and they haven’t said anything yet.

I’ve never bought a home so I’m just not sure what to expect and if it may go wrong.

Thank you!

[Anonymous]

@ShanetheMortgageManthanks so much for being a part of the MyFico Family. Many of us are benefiting from your knowledge and postings! Thanks so much for being here and welcome Your hands on knowledge of the Mortgage Industry is a plus to the Forum!