FHA Loan Processing
When it is time to process your file for a loan, some patience is required-this is the longest part of the process. During this phase, your file will be prepared and presented to the FHA investors. Any issues or mistakes in your file while be addressed, to make sure that there are absolutely no discrepancies.
If any of the required documents are missing from your initial application, they may be requested again to ensure accuracy.
For your convenience, here is a list of the documents that you will be required to provide for processing:
- You will be required to provide an FHA case number. The FHA will need to approve any properties that you are going to purchase, including townhomes, condos, etc. If the property was in escrow in the past, you may need to request a case number for another lender. This can take up to 2 days.
- You must be able to provide verification of employment. At this point, a form will be sent to your past and present employers from the past two years, to verify your income and duration of employment. This process may take up to 2 weeks.
- A form will also be sent to your bank(s) to ascertain your average account balance for the past 3 months. Some banks will require a borrower fee of up to $20 for your verification. This process will take up to 5 days.
- If you have an escrow company, they will need to create a form detailing the transaction details and instructions. This will be done through an independent third party company, closing attorney, or title company. This process will take up to 7 days.
- You will also need to provide a report from your title company, ensuring the title of your home. They will assess the property and borrowers for any loans, liens, or legal items which may affect your title to the property. This process can take anywhere from 1 to 2 weeks.
- An FHA appraiser will then appraise your property and its value, measuring square footage, and verifying the conditions. They will also research other recent home sales in your area which are comparable, and will subsequently determine your home's value. They will provide you with an appraisal document which you must give to the FHA. This can take 1 to 4 weeks to complete.
- If you are purchasing a home, you will need to provide a Purchase Contract, any Counter Offers, and a Transfer Disclosure Statement. You can generally obtain these documents from your realtor. Your appraiser will need signed copies of these contracts, before they begin the appraising process. This can take between 2 and 10 days.
- You will also need to provide written and signed letters which explain any issues with your credit report, work history, deposits, sources of funds, etc. for review. These should be submitted once the FHA has received all of your other documents.
- If you have any extenuating circumstances, such as pending bankruptcy, divorce papers, child support papers, etc. you will need to provide any paperwork to document these circumstances. The length of this process will vary case by case.
- Once you have provided all of these documents, anything missing from your original application must be supplemented. This includes the last 2 months of your paystubs, 3 months of bank statements, and the past 2 years of your tax returns.
This entire process can take anywhere from 1 to 3 weeks, as various documents must be requested from third parties.
