I am posting this information so we all understand to make sure and give us Loan Officers sufficient time to get any FHA loans done without any extensions. Of course, I know they come up sometimes. But FHA underwriting time seems to be getting quite long for most investors. Here at Valley, we have about 6 investors that we work with on FHA deals. Some of them are still at 7 days but the majority are at 3-4 weeks. I know crazy right?!?!?
The reason for this is simply put--more people are going FHA. 100% Conventional loans are GONE and 97% conventional loans are requiring a 680 FICO score. So, there is a TON more flow of people going FHA. A year ago, we were doing 100% financing with a 600 or even 580 FICO score, which is silly and probably the reason we are where we are today. This would be a simple fix if those companies would just hire more underwriters; however, they seem to feel it is just a phase that we are going through. I, on the other hand, don't know if that is the case? We will see, I guess.
Lastly, I don't want you to get the wrong impression--FHA loans are good loans! They are just taking a bit longer to get done right now. It just takes a little patience!
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