Borrowers who apply for an FHA loan must submit a variety of forms and financial documents. These FHA documents are used for processing, underwriting and approval purposes. The underwriter will examine the documentation to ensure that the loan is sound, and that the borrower has a reasonable ability to repay the debt. In this article, we will examine some of the documents you’ll need in order to get approved for an FHA loan.
Documents Needed for an FHA Loan
The following information was adapted from HUD Handbook 4155.1, which covers credit analysis and underwriting requirements for FHA loans. Chapter 1, Section B of the handbook covers documentation requirements. Here are the general documents required for mortgage credit analysis.*
- Application: All borrowers who apply for an FHA loan must complete and sign Fannie Mae Form 1003, commonly known as the Uniform Residential Loan Application or URLA. This is a standardized form. You can find samples of it online with a Google search.
- Addendum: FHA borrowers must also complete and sign a HUD addendum to the loan application. The form number for this FHA document is HUD-92900-A.
- HUD Form 92900-LT, “FHA Loan Underwriting and Transmittal Summary.” This document is used for both home purchase and refinancing transactions. This form contains information about the mortgage, such as the type of loan (fixed vs. ARM), the amount being borrowed, the interest rate, the term, etc. It also includes information about the borrower, such as income and debts, to be used for underwriting purposes.
- SSN: The FHA document file must include evidence of the borrower’s Social Security Number (SSN).
- Credit report: The mortgage lender must obtain a credit report for all borrowers who are applying for the loan and assuming responsibility for the debt obligation. Credit reports may not be required for some streamline refinance transactions.
- Verification of Deposit (VOD).
- Verification of Employment (VOE). This is usually Fannie Mae Form 1005. As the name implies, this FHA document is used to verify the borrower’s employment (if that employment is being relied upon to repay the debt).
- Federal income tax returns, usually for the last two years.
- Sales contract: This is standard procedure for any type of mortgage loan. The sales contract must be included within the FHA document package as evidence of the agreed-upon sale price. Any amendments, agreements or certifications that go along with the sales contract must also be included in the file.
- Certifications: The application file must include a real estate certification signed by the buyer, seller, and the seller’s real estate agent (listing agent). This is a short boilerplate document that all parties must sign, stating that “the terms and conditions of the sales contract are true to the best of our knowledge and belief.”
- Amendatory clause: This document must be signed by both the buyer and seller. It says the buyer is not obligated to buy the house if it appraises below the agreed-upon purchase price. It also protects the buyer’s earnest-money deposit in such cases.
- Verification of rent or payment history on past mortgage. This FHA document can take several forms. It can be a written letter from the mortgage servicer or landlord. It can information pulled from the borrower’s credit report. It might also be “the most recent 12 months of cancelled checks or receipts for payment of the rent/mortgage.”
- Uniform Residential Appraisal Report. Every FHA loan document file must include a home appraisal report from a licensed appraiser. This report is needed to ensure the home is worth (at least) the amount the buyer has agreed to pay. This does not apply to certain streamline refinance transactions, which can typically be processed and closed without an appraisal.
- Explanatory statements needed to make a “sound underwriting judgment.” Sometimes the underwriter will request one or more written explanations from the borrower, to shed light on a particular financial transaction or situation. These documents must also be included within the application package.
* This is not a complete listing of FHA documents. Additional documentation may be required, as discussed in Chapter 1 of HUD Handbook 4155.1.
Age of Documents
HUD also has specific requirements for the age of documents being used for underwriting purposes. On the day of closing, all of the FHA loan docs included within the application file can be up to 120 days old, or 180 days old in the case of new construction. There are a couple of exceptions to this rule:
- The document age-limit can be overridden by other instructions within the HUD handbook.
- The 120/180 rule may not apply when age does not affect the validity of the document used for underwriting (as is the case for divorce decrees and tax returns).
In most other cases, the 120/180-day rule applies.
Disclaimer: This article explains the different documents you will need to get approved for an FHA loan. Please note that this list is not exhaustive. Your lender may require additional documentation that is not mentioned above. Additionally, HUD revises their rules and requirements from time to time. For the most recent instructions and guidelines, please refer to HUD Handbook 4155.1.