Important Reminders for VA, USDA, and FHA
Newrez LLC "Newrez" Approved Correspondent Clients: please note the following reminders for processing and underwriting VA, USDA, and FHA mortgage applications.
- The VA has issued reminder to Lenders that the 26-1802a, HUD/VA Addendum to Uniform Residential Loan Application is still to be used for VA mortgage applications in spite of the form’s discontinued use for FHA mortgage applications. All sections and questions pertaining to VA applications on pages 1 & 2 of the 26-1802a must be addressed and completed.
- All Builders of properties appraised as New or Proposed Construction must have a valid VA-issued builder ID number to ensure that VA-sanctioned or government debarred builders do not participate in the VA Home Loan Program. Builders who do not have a Builder ID can easily obtain one within a few days from the jurisdictional VA Regional Loan Center. See this link for registration instructions.
- Clients are reminded that IRS transcripts are always required for all household members (borrowers and non-borrowers) in addition to the income documentation, e.g., paystub, W-2, etc. used by the underwriter to calculate the household member’s annual and monthly income. A fully complete 4506-C form must be signed and dated by each adult household member, except full-time students, age 18 and up. The IRS transcripts must validate the adjusted household income and repayment income requirements of the application. See Chapter 9 Income Analysis of the HB-1-3555 for additional information.
- Clients are reminded that FHA’s s temporary COVID-19 guidance covering Exterior-Only Appraisal scope of work (SOW) options and flexibilities in re-verification of employment prior to closing are scheduled to expire on June 30, 2021. The effective date for the exterior-only appraisal SOW is valid only for appraisals dated on or before June30, 2021. The re-verification flexibilities are only eligible for loans closed on or before June 30, 2021. Other FHA temporary COVID-19 guidance still in force for Verification of Self Employment and Rental Income is scheduled to expire, effective with case numbers assigned on or before June 30, 2021. At this time, since FHA has not indicated if the temporary COVID-19 guidance will be extended, Newrez is advising associates and clients to plan for the contingency that the COVID-19 temporary guidance will not be extended. Newrez will follow FHA if the guidance is extended beyond June 30, 2021.