FHA Loans - Temporary COVID-19 Coronavirus Underwriting Guidance • Updated April 17 to permit a Desktop Appraisal • Updated May 20, June 30, and August 31, 2020 to extend effective date for temporary guidance
FHA has announced several temporary guideline flexibilities for re-verification of employment and utilizing Exterior-Only Appraisal reports as alternative to the standard Exterior-Interior Inspection Appraisal report for loans impacted by the COVID-19 pandemic emergency.
The temporary re-verification of employment guidance is effective immediately for cases closed on or before October 31, 2020.
The temporary appraisal guidance is effective immediately for appraisal inspections completed on or before October 31, 2020.
Below is a summary of the guideline flexibilities that NewRez will offer and implement for the underwriting of FHA Loans.
Re-Verification of Employment
FHA’s temporary relief guidance has waived the re-verification of employment within 10 days of the Note date provided:
- that the lender is not aware of any loss of employment by the borrower, and
- for purchase transactions, evidence that the borrower has a minimum of two months PITI reserves; and
- a year-to-date paystub or direct verification of income (e.g., The Work Number) for the pay period that immediately precedes the Note date. (Bank statements showing direct deposit from the borrower’s employment is not eligible).
For self-employed borrowers, NewRez is requiring verification that the borrower’s business remains operational and must be done within 10 calendar days of the Note date.