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FHA Loan Rules: Documentation Standards

110Do you know the FHA loan standards for the age of documents associated with the loan and how those standards may apply to your loan? HUD 4000.1 has a list of requirements as well as certain exceptions to those requirements when it comes to the nature of the documents used to originate and approve the loan including appraisals, credit reports, and more.

One of the most important rules in this area has to do with how documents are handled. For example, did you know that credit reports must come directly from the credit reporting agency and cannot be provided via the FHA loan applicant? Another rule in this area is that certain documentation may be acceptable in an electronic format, but such documentation is subject to state law and lender standards.

Another important area regarding documents has to do with the age of that documentation. For example, HUD 4000.1 has a specific limit on the age of certain paperwork (or its digital equivalent) used to originate the loan.

“Documents used in the origination and underwriting of a Mortgage may not be more than 120 Days old at the Disbursement Date.” HUD 4000.1 adds, “For purposes of counting Days for periods provided in this SF Handbook, Day one is the Day after the effective or issue date of the document, whichever is later.”

The 120 day rule applies to appraisals, but borrowers in certain situations may be able to apply for an extension. “The 120 Day validity period for an appraisal (see Ordering Appraisals) may be extended for 30 Days at the option of the Mortgagee if (1) the Mortgagee approved the Borrower or HUD issued the Firm Commitment before the expiration of the original appraisal; or (2) the Borrower signed a valid sales contract prior to the expiration date of the appraisal.”

FHA rules in this area also instruct the lender on appraisal updatess; “An appraisal update must be performed before the initial appraisal, with no extension, has expired. Where the initial appraisal is subsequently updated, the updated appraisal is valid for a period of 240 Days after the effective date of the initial appraisal report that is being updated.”

Some documentation is NOT affected by this 120 requirements. For example, evidence of marriage, separation, or divorce. According to HUD 4000.1, “Documents whose validity for underwriting purposes is not affected by the passage of time, such as divorce decrees or tax returns, may be more than 120 Days old at the Disbursement Date.”

If you are concerned about the age of certain documentation you need or wish to provide the lender, speak to your loan officer about whether the 120 rule applies for those particular items.

Do you work in residential real estate? You should know about the free tool offered by It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:

Joe Wallace - Staff Writer

By Joe Wallace

April 6, 2016

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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