USDA has extended the temporary guidance for income verification, appraisals, repair inspections and FAQs on eligibility after a forbearance plan and other underwriting and processing questions that have arisen in response to the COVID-19 Pandemic National Emergency. The guidance that is summarized below, was originally issued on March 27, 2020 has been extended to June 30, 2021.
Verbal Verification of Employment
When a Verbal Verification of Employment (VVOE) is not obtainable within 10 business days of closing due to the temporary closure of a borrower’s employer, or other reason due to the COVID-19 pandemic emergency, NewRez will permit the following:
- a direct electronic verification of employment from a Third-Party Verification Vendor that provides immediate work status reporting:
- or email from the borrower’s employer as an alternative.
When an email is used to verify employment, it must:
- Be within ten days of the Note date,
- Be from the employer’s email address, such as firstname.lastname@example.org (no Gmail, yahoo, etc.),
- Be from the borrower’s direct supervisor/manager or the employer’s Human Resources department,
- Contain all the standard information required on a VVOE, including the name, title, and phone number of the person providing the verification, and
- Identify the borrower’s name and current employment status.
NewRez will not accept a paystub or bank statements as alternative documentation to the VVOE.
For self-employed borrowers, NewRez is requiring verification that the borrower’s business remains operational and must be documented within 10 business days of the Note date.
Any reduction or loss of income that is disclosed as result of the verification of employment or the borrower after the Condition Commitment (3555-18) has been issued and prior to closing must be evaluated for resubmission to GUS and USDA for updated approval. Borrower’s with no income or those receiving unemployment benefits at the time of closing are not eligible for USDA loans regardless of available cash reserves.
Residential Appraisal Reports – Existing Dwelling
For Purchase and Non-Streamlined refinance transactions, when the appraiser is unable to complete an interior inspection due to COVID-19 concerns, an Exterior-Only Inspection Report (2055) will be accepted. In such cases, appraisers are not required to certify that the property meets HUD Handbook 4000.1 standards. Appraisal must be completed in accordance with USPAP and UAD standards.
This temporary appraisal report exception does not apply to new construction properties.
Repair Inspections – Existing Dwelling
When a repair completion certification is not available due to issues related to the COVID-19 pandemic, a letter signed by the borrower confirming that the repair work was completed is permitted. Evidence of completion, which may include photographs of the completed work, paid invoices to contractors indicating completion, certificate of occupancy certifications issued by inspectors, and other similar documentation is required.