New Rules - FHA Changes rules for Self Employed borrowers
Mark, Thank you for letting me re-blog. This is important information for self-employed borrowers. I've been preaching it over and over again.. they have to show income, no such thing as stated any longer. Great stuff, Mark
FHA Changes rules for Self Employed Borrowers
Documentation Requirements for Self-Employed Borrowers – Effective for all case numbers ordered on or after April 1, 2012 except non-credit qualifying streamlines and HECMs.
Documentation Requirements for Self-Employed Borrowers
Self Employed borrowers will need P&L and Balance Sheet if more than a calendar quarter has elapsed since date of most recent calendar or fiscal-year end tax return was filed by the borrower – with no exceptions.
Additionally, If income used to qualify self-employed borrower exceeds a two-year average, need audited P&L or signed quarterly tax returns obtained from IRS are required.
So as you can see after April 1st things are tightening up - so if you have a SE borrower in contract on a short sale and it is closing after 4/1/12 you need to have their lender re- review everything. Their expenses will be heavily scrutinized going forward - don't let this rule change affect your future closings.
Thanks for stopping by and reading my blog: FHA Changes rules for Self Employed Borrowers
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