December 18, 2012
The FHA has specific procedures for everything from credit checks to the money needed to be paid at closing time. There are also rules for loan approval including how long that approval remains in effect. How long should a borrower expect to have approval for an FHA mortgage without taking action on that loan approval?
Let’s look at what the FHA says about this process in HUD 4155.1, Chapter 1, Section A which includes information on what happens after loan approval. According to the FHA, when the application is approved, the lender;
• records the results of the credit analysis on the HUD-92900-LT, FHA Loan Underwriting and Transmittal Summary
• enters any modification of the mortgage amount or approval conditions under “Underwriter Comments” on the form, and
• approves the borrower and authorizes closing, if the case is a DE case.
FHA loan rules also add a note saying that if the loan is approved, the financial institution is required to notify the borrower in writing or “verbally” once the lender knows the loan is approved. Once that happens, FHA rules state, “The term of the firm commitment or underwriter’s approval of the borrower, on page three of form HUD-92900A, HUD/VA Addendum to Uniform Residential Loan Application, is 90 days or the remaining life or whichever is greater of the
• Conditional Commitment
• U.S. Department of Veterans Affairs (VA) Certificate of Reasonable Value
(CRV), or
• underwriter’s approval of the property, as appropriate.”
So there is a specific window of time mentioned–90 days–but that window is subject to the items mentioned above, so the 90 days aren’t necessarily the minimum or the maximum IF those documents apply.
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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