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FHA Loan Checklist Information

FHA Loans are designed to allow home ownership for buyers who don't qualify for conventional mortgages. These are the steps you'll have to take to qualify.

Getting Started
The Federal Housing Administration (FHA) provides a guaranteed low down payment loan program designed to help lower income home buyers achieve their dream of home ownership. Loan applicants are required to submit complete, accurate documentation to lenders in order to secure an FHA home mortgage. The documents cover nearly every aspect of your financial state, both current and the recent past. Because the documents are needed to conduct your mortgage credit analysis, you will not be able to borrow money without submitting everything that the lending agency requests.

An accomplished real estate agent can walk you through the process, but you can expedite matters by having the appropriate documents collected and prepared for submission. If you're missing something such as your Social Security card, apply now for a replacement so your loan process won't be slowed. Every mortgage and client varies slightly, and laws and policies change from time to time, so other documents may be requested on a case-by-case basis. Documents are needed for everyone who will be listed as a borrower. Here is a list of the most common requirements.

FHA and HUD Forms
Application - You will need to complete Fannie Mae Form 1003, the Uniform Residential Loan Application (URLA). In addition to providing vital information to your lending agency, it serves as a guide sheet for documents you will need to provide.

In the event that Fannie Mae requests additional forms, you can find a full listing of their forms on their website.

Personal Information
You will need copies of your driver's license and Social Security card. Copies of divorce/ palimony/ alimony/ papers and a green card or work permit are required when applicable.

Employment Information
If payment of your loan is based on your income, you will need to provide evidence of your work history for the last two years. Documents which are accepted to show employment history are the most recent two years of federal income tax returns with all schedules and your most recent two years of W-2's, 1099's, etc. Self-employed and small business owner applicants will need three years of tax returns and a Year-to-Date profit and loss statement.

Loan agencies also request your most recent pay stubs covering a one-month pay period and showing your year-to-date earnings.

If you have a non-traditional job or seasonal work which is suspended at the time you're applying, alternate documents may be accepted.

Retired applicants need copies of Social Security income, pension statements, and/or retirement award letters.

Savings Information
Lending agencies want to see a complete picture of your financial state. One piece of that picture is your savings information. You can document your savings by submitting all pages of bank statements for any and all accounts. Statements from retirement, 401K, mutual funds, money markets, stocks, etc., also provide savings information.

Lenders will request a Verification of Deposit. This document is a statement directly from the bank giving a brief overview of your accounts at that bank at the time of issuance. It typically includes such information as the current funds in reserve (balance), the average balance for previous two months, and the date the account was opened.

Credit Information
Your credit information shows the lending agency the amount you currently owe to creditors, your typical monthly expenses, your track record on payment for housing, and any serious credit issues from the past 8-10 years. In short, you will be assessed on your ability to make your monthly mortgage payments based on your credit history and current income and bills.

You will need to sign a statement which grants permission to the lending agency to request your credit score. Lending agencies turn to Equifax, TransUnion, and Experian for credit reports for loan applicants. With your permission, the mortgage company can get your credit score directly from one of the providers so that you do not have to submit your credit score yourself.

The documents commonly requested are your most recent statement from all bills. The statement must include minimum payments and account numbers. You should provide statements for credit cards, utilities, current mortgage, car payments, student loans, and any other liabilities.

If you currently rent your home, you will need to provide your landlord's name, address, phone number, and 12 months of cancelled rent checks. A written letter from the mortgage servicer or landlord may be accepted as alternate documentation for cancelled checks.

When applicable, bankruptcy and discharge papers need to be submitted.

If you have co-signed for a loan, that documentation will be needed as well. If the other party has made the payments for the last 12 months, you will need cancelled checks to indicate that you are not making that payment.

Additional documents for refinancing or rental property
If you are refinancing rather than securing the first mortgage, or if you have rental property, you will be asked for a few additional documents. These documents include the Note & Deed on the current loan, the most recent property tax bill, a copy of your hazard (homeowner's) insurance policy, a copy of payment coupons for the current mortgage, and rental agreements.

While FHA-insured loans are regulated by the federal government, each approved lending agency can, within certain boundaries, require the documents it deems necessary. The lending agency has a lot at stake. It must ensure that the house is worth the amount of the mortgage, so that should it acquire the property through a default, the property can pay for itself. Additionally, the agency needs to know that the applicant can make the payments. Agencies want accurate documents every step of the way.

As a loan applicant, it is your responsibility to provide what the agency requests of you. The process is comprehensive, but the reward is a manageable mortgage that leads to home ownership.