FHA Changes rules for Self Employed Borrowers ROUND 2

Documentation Requirements for Self-Employed Borrowers – Effective for all case numbers ordered on or after April 1, 2012.

1.        All FHA files for self-employed borrowers require a YTD P&L AND Balance Sheet for every business covering the time from the last files tax return to the end of the most recent quarter – NO EXCEPTIONS

2.       Annual earnings that are stable or increasing are acceptable. Earnings reflecting a significant decline in income over the analysis period (25% or more) are not acceptable for use, even if the current income and debt ratios meet FHA guidelines.

3.       Also, please note that FHA still will not allow the add-back of expenses for business use of home when calculating Schedule C income.

 

I hope this helps to clarify the new requirements. Call me anytime for the latest info as it hapend and sometimes before it happens!

Thanks for stopping by and reading my blog: FHA Changes rules for Self Employed Borrowers -ROUND 2

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4 Comments on New Rules - FHA Changes rules for Self Employed borrowers ROUND 2

MAR
27
2012
1,210,622 Points 118 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Mark - it looks like investors can be better off with not FHA loans. It is dificult, but it is difficult with FHA as well
11:11pm • #1
MAR
28
2012
411,922 Points 15 Featured Posts Outside Blog Called Shot Master

Self employed borrowers are a bit more challenging when it comes to the pre-qualifications
5:45am • #2
355,072 Points 3 Featured Posts Outside Blog Called Shot Master

Mark

I just lost a deal do to one of these new rules for self employed parents who were going to co-sign for their son. Thanks for pointing them out, cheers cvc
12:03pm • #3
612,031 Points 40 Featured Posts Outside Blog Called Shot Master

Mark, please tell me those P & L's don't need to be audited.  
2:52pm • #4


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Mark Taylor

Mark Taylor NMLS# 207897 BK#00013635

Scottsdale, AZ

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