FHA Mortgage Underwriting Process
Once your file has been submitted to the FHA Mortgage Lenders the loan will be underwritten. During this time the underwriter will review your file to determine a decision.
This process usually takes 24-48 hours.
The underwriter will review of the information and make sure that your profile complies with all FHA minimum requirements. The underwriter will review all of the following 4 c’s of credit.
- CASH- Savings / Source of Money for Down Payment.
- CREDIT – Credit and Payment History.
- CAPACITY- Employment History- Income and Debt Ratios.
- COLLATERAL- FHA Appriasal.
FHA UNDERWRITING DECISIONS INCLUDE
- Approved – Your loan application meets the FHA lenders minimum specifications.
- Denied – Some or all of your information does not meet the FHA lenders minimum guidelines.
- Suspended – FHA lenders may need additional documentation to render a decision.
The underwriter will then issue a CONDITIONAL FHA LOAN APPROVAL. All approved loans have conditions that must be met in order for the loan to fund. FHA conditional approvals include items like FHA Appriasal, Clear title, Updated income and asset documents. Proof that the earnest money deposit cleared your bank account. Title company contact information and wiring instructions and so on.
There are two types on conditions:
Prior to Loan Documents – These are items that must be provided and reviewed by the underwriter before the loan documents can be requested.
Prior to Closing – These are items that must be provided and reviewed by the underwriter and/or loan funder before the loan can close.
Once the underwriter or loan funder has received this conditions, they typically require 24 hours to clear them before we can order loan documents or fund the loan.
If your file meets most FHA guidelines initially, your file will be uploaded for AUS Approval. AUS stands for automated underwriting system. . This type of underwriting uses a computer and artificial intelligence to issue a decision on your file. The underwriter will simply review all of the information provided to insure that it matches to the information provided to obtain the electronic loan approval.