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New Single Family Housing Policy Handbook and Updated Underwriting Guidelines for FHA Loans

Dear Licensed Partner,

In preparation for the new Single Family Housing Policy Handbook (4000.1) from the U.S. Department of Housing and Urban Development (HUD), Sun West is updating its guidelines for FHA loans and will be rolling out periodic updates pertaining to the new Handbook.

Sun West will follow applicable guidelines from the new Handbook (4000.1) for all loans with FHA case number assignment dates on or after September 14, 2015.  Sun West will continue to honor existing guidelines from Handbook 4155.1 for all loans with FHA case number assignment dates prior to September 14, 2015.

Sun West is providing the requirements below ahead of time to avoid delays in underwriting per the new Handbook.

A) The underwriting guidelines below will be effective for all FHA loans submitted to Sun West with FHA case number assignment dates on or after September 14, 2015.  Specifically, the new Handbook requirements pertaining to the signed initial application and additional requirements related to the non-borrowing spouse must be met before the loan can proceed to underwriting and closing.  Handbook 4155.1 does not have specific requirements in regards to the following updates.  

  • HUD requires borrower’s initial complete and signed URLA (form-1003) and page 2 of form HUD-92900-A prior to underwriting the loan
  • The debt of the non-borrowing spouse MUST be included on the initial URLA (form-1003) if the borrower resides in or if the property to be purchased is located in a community property state (The debt of the non-borrowing spouse is included in calculating the DTI)
  • The non-borrowing spouse’s authorization and signed SSN verification (SSA-89 form) must be provided with the loan submission package
  • A valid government-issued photo identification of all borrowers is required 

B) The purchase contract guidelines below will be effective for all FHA loans submitted to Sun West with FHA case number assignment dates on or after September 14, 2015.  Sun West is advising our partners to inform all real estate agents and parties involved of these requirements to ensure that the purchase contract is in compliance.

  • All purchasers listed on the sales contract are borrowers on the loan and only borrowers and family members of a purchaser may be listed on the sales contract.  A family member of a purchaser, who is not a borrower, may be listed on the sales contract without modification or removal
  • If the property was built before 1978, the contract or addendum must reflect that the borrower has been provided with EPA-approved information pamphlets on identifying and controlling lead-based paint hazard and the borrower was given a 10-day grace period before becoming obligated to purchase the property unless the borrower has waived that requirement
  • When any agent is involved in the transaction on behalf of the seller, the sales contract must include a statement showing that the agent has informed the seller of the seller’s Lead Disclosure Rule obligations.  The agent must be aware of his/her duty to ensure compliance with the requirements of the Rule, and the agent has signed and dated the contract 

C) The guidelines below provide additional clarification on existing handbook requirements that are currently in effect.

  • Any third-party verification that was handled by or transmitted through any interested party or the borrower(s) is not acceptable
  • Any document, including employment records, income, assets, or credit history of a borrower that has been processed by the equipment of unknown or interested parties are not acceptable
  • Any online printout of supporting documents must indicate the Uniform Resource Locator (URL) address and the date and time the documents were printed

Sun West will provide further updates pertaining to the new Handbook as they become available.

If you have any questions, please contact your Client Relations Manager at (855) OK-SUNWEST or (855) 657-8693.

Sincerely,

Sun West Mortgage Company, Inc.
18000 Studebaker Road, Suite 200
Cerritos, CA 90703
Phone: (800) 453-7884
SW-1: Our New No Overlays Program

 

Equal Housing Opportunity This information is provided to licensed brokers/lenders only and may not be copied or distributed to customers or potential customers. All loans are subject to approval. Certain restrictions may apply. Listed pricing is a morning indication only. Program rates, prices, guidelines, fees, costs, terms and conditions are subject to change without notice.