The popularity of the FHA home mortgage loan with first time home Buyers and those Buyers unable to qualify for a conventional home loan is undeniable, and its use is increasing in the South Florida region. During the first two quarters of 2015, FHA loans funded nearly 19% of the single family homes sold here, compared to 14.2% for the same period in 2014. However, beginning September 14, 2015, qualifying for a FHA home loan may be more difficult for some Buyers due to changes in borrower criteria. Following is a list of changes to be aware of:
- Deferred Student Loans: Student loans deferred for at least 12 months after closing will no longer be ignored when computing a borrower's loan to income debt ratio;
- Employment Gaps: Borrowers will need to have at least 6 months on the job after an employment gap or 'extended absence', regardless of the reason for the gap;
- Documentation for Gift Funds: Using gift monies to fund the down payment is still allowed. However, lenders will now need to see a bank statement from the donor showing the amount transferred. Previously, the required documentation was a letter from the donor showing the donor's name, the amount transferred, date transferred and deposit and withdrawal slips;
- Documentation for Job Changes: Borrowers who have changed jobs more than 3 times in the past year or who have switched careers in the past year will need to provide more documentation, i.e. additional training and/or education transcripts and evidence of increases in income and/or benefits.
Buyers should contact a local lender for more details about how these changes may affect their credit worthiness.
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