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FHA Guideline Updates 2024

June 3, 2024


Effective immediately, the FHA is making it easier for consumers to qualify for a home loan. At Homestead Financial Mortgage, we stay on top of any changes in the mortgage world and feel this change will help ease the burdens of obtaining an FHA loan and make the process even easier.

Here is a summary of the guideline changes:

  1. Previously, lenders needed to source any nonpayroll deposits that were over 1% of the purchase price. That has changed now to be anything larger than 50% of the total gross monthly income. For example, if someone wanted to purchase a $250,000 home, a large deposit would be flagged at 1% or $2,500. Now, under the new rules, 50% of the gross monthly income of, say, $8,000 a month would allow a $4,000 deposit in the borrower’s account without having to source the deposit.
  2. Documentation of gift funds has been updated. In the past, the lender always had to document the source of the gift with a bank statement; many donors would push back, not wanting to provide their personal information or wanting to black out the statement. This has previously been one of the largest obstacles when a borrower receives a gift. The new rules now allow a donor to provide only ONE of the following.
  • The donor’s bank statement that shows the withdrawal and evidence of the deposit into the borrower’s account.
  • A copy of the donor’s canceled check (front and back) and evidence of deposit into the borrower’s account.
  • A copy of the donor’s withdrawal receipt and evidence of deposit into the borrower’s account.
  • Evidence of the electronic transfer of funds from the donor’s account into the borrower’s account.

This is fantastic news, and Homestead Financial Mortgage has implemented these rules immediately, helping to make the dream of homeownership more achievable for our borrowers. Contact one of our loan officers for more details.

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