Fundamentals of FHA Underwriting

This course is designed for those new to underwriting FHA loans, but have experience underwriting conventional loans, and can complete an analysis of credit, liability, income and, asset documentation. This course consists of underwriting basics specific to FHA, such as: borrower eligibility, property eligibility, loan limits, mortgage transactions, mortgage insurance premiums, FHA programs and more. The target audience would include processors, underwriters, quality control staff, and anyone who wants to better understand the underwriting process of FHA loans.

What it's about
By the end of this course students will be able to effectively transition from conventional to FHA underwriting; be able to calculate mortgage insurance premiums (MIP) and maximum mortgage amounts and determine eligibility for the applicant and property.

Classes consist of four 90-minute live sessions with instructors delivered through the Zoom conferencing platform.

What will I learn?

Upon completion of the course, students will be able to:

Recognize the forms required for FHA financing
Calculate loan amounts, qualifying ratios and mortgage insurance premiums
Identify FHA technology as it applies to underwriting
List borrower benefits of an FHA loan
Identify basic income, assets and related underwriting policies
Identify basic credit history, liabilities and related underwriting policies
Recognize things that affect maximum mortgage
Identify differences between conventional and FHA appraisal requirements

Benefits

Upon returning to the office, students will be able to:

Enhance your underwriting skills
Add a new program to your tool belt when you add FHA to your underwriting resume’.

Participants will be provided a student manual for each of the four sessions.

Participants will be required to complete an assessment at the end of the course to assess mastery of the content.

To receive the Certificate of Completion participants must receive a course total of 70% or greater.

Agenda

During the course the following topics will be covered:
Session One - Topics

Introduction to FHA
- FHA Credit Policy Guidelines & Regulations
- FHA Direct Endorsement
- FHA versus Conventional
FHA Underwriting Process
- Borrower Approval or Rejection
Using FHA Technology
General Program Eligibility

Objectives

Recognize the key differences between FHA & Conventional lending
Identify handbooks and resources available to clarify FHA requirements
Understand FHA technology applications as they apply to the underwriter

Session Two - Topics

TOTAL Scorecard
FHA Loan Limits
Transactions That Affect Maximum Mortgage
Mortgage Insurance Premiums
FHA Disclosures and Form

Objectives

Describe TOTAL Scorecards purpose and its relationship to AUS findings
Successfully calculate maximum mortgage amounts
Successfully calculate total mortgage amounts to include the mortgage insurance premium
List FHA specific disclosures and forms

Session Three - Topics

Mortgage Credit Analysis
- General Overview
- Liabilities and Credit
- Employment and Income

Objectives

Conduct a Mortgage Credit Analysis covering:
- Describe in general terms what an analysis consists of
- Successfully complete a basic analysis of liabilities and credit documentation
- Successfully complete a basic analysis of employment and income documentation

Session Four - Topics

Conduct a Mortgage Credit Analysis covering:
- Qualifying Ratios
- Compensating Factors
- Assets and Funds to Close
FHA Appraisal Requirements
Review of DU/LP Findings with TOTAL Scorecard
Review of the 92900 LT

Objectives

Successfully complete a basic analysis of asset documentation
Describe standard qualifying ratios and when higher ratios would be allowed
Describe basic appraisal requirements specific to FHA
Describe the difference between a Conventional 1008 Transmittal and an FHA 92900 LT