December 26, 2012
FHA loan applications are designed to give the lender the information needed to start the approval process. It’s true that a loan application can be lengthy–it’s a major line of credit, after all. What does the bank need from the borrower to move forward? The application is designed to help the lender obtain a range of details including:
• general mortgage credit analysis documents
• evidence of Social Security Number
• verification of deposit
• verification of employment (VOE)
• federal income tax returns, and
• appraisal documentation.
That’s reprinted from the FHA loan rulebook for lenders, HUD 4155.1, which adds, “Lenders must obtain the most recent documents required to perform the mortgage credit analysis. “Most recent” refers to the most recent document available at the time the loan application is made.” As you can see, FHA loan rules are serious about this process.
“General mortgage credit analysis documents” refers to items like your credit reports, which must be obtained directly from the reporting agency and cannot come from the borrower. Social Security number evidence may be as simple as providing a xerox copy of your Social Security card or filling out the number on the credit application form. Your lender will tell you what is needed in this case if it isn’t listed on the application itself.
“Verification of deposit” may include bank statements or other documents; it could also be a matter of providing an account number for the loan officer to check. “Verification of employment” may be done by the lender by calling the phone numbers provided on the application form, but your lender could also require a pay stub or other proof of employment from you. Federal tax returns should always be delivered as copies–don’t give the lender originals as you may need them again later for another loan application for a new home or refinancing loan.
Appraisal documentation may come at a different state in the loan application process depending on how you go about it–ask your loan officer about this if you have any questions. Every bank may have a different set of procedures for this step–your current loan officer may need something different than a previous lender.
This collection is not an exhaustive list of the things needed for an FHA mortgage loan application, but it does give you a good idea of how the process should work. If you have further questions, as a loan officer or contact the FHA directly at 1-800 CALL FHA.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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