April 26, 2021
There is documentation required to process your home loan application. Do you know what your home loan or refinance loan transaction requires of you? The lender requires tax documents, information about the sources of your down payment, access to your credit reports, and more.
But there are rules about who provides these documents, and you’ll need to be aware of them when gathering your paperwork.
FHA Loan Rules On Documentation
Some of the information your lender needs comes from you personally. What does this include? Your photo identification, and proof of legal residence in the USA (which may be required where applicable).
FHA loan rules say you do not have to be a citizen to be approved for an FHA mortgage, but you must have documentation that shows your status as a non-resident alien or other status.
Borrowers are required to furnish proof of Social Security Number where applicable, and copies of other personal records may also be needed–your loan officer will have a list of things that can come from the borrower directly, such as contact information for your employers.
You will also have some documents to sign to give your lender permission to request credit and tax information. The same may be required to give your lender permission to pull your credit reports.
Borrowers making a down payment should know that any down payment funds you have will require information about their sourcing; the lender is required to ensure your down payment money does not come from unapproved sources like payday loans, pink slip loans, or down payment “gifts” that actually have repayment expectations.
Some information about the borrower cannot be sourced from the borrower as per rules in HUD 4000.1. Do you know what they are?
Home Loan Documents That Cannot Come From The Borrower
FHA loan rules in HUD 4000.1 lists the documents that cannot sourced from the borrower.
In the same way you cannot personally provide copies of your college transcripts to an admissions department when transferring to a new school, your lender cannot accept credit reports or tax reporting information directly from you but must get them from the source instead.
In other words, these documents must be requested by the lender and they must be sent directly to the lender from the credit reporting agency. They cannot pass through the borrower’s hands at any time before going to the lender.
Your lender will ask you to sign paperwork giving the bank your permission to request your tax documents and other information on your behalf.
Some borrowers may be asked unofficially to bring them in as a reference for planning purposes, but an official copy from the issuing agency is formally required.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
Browse by Date: