New Rules - FHA Changes rules for Self Employed borrowers

Reblogger Ron Cooks
Real Estate Agent with The Real Estate Marketplace TX# 584631

Mark Taylor offers this post with a warning for the self-employed.  It was already tough for the self employed, these rule changes just added a cog in this complex machine.

Original content by Mark Taylor Mortgages 207897nmls# DOC#207897

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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