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         FHA HOPE for Homeowners H4H           

Determining Eligibility Calculating the Maximum Mortgage
Consumer Protection & Disclosures Underwriting and Qualifying
Appraisals Documentation Requirements
Term & Rates of H4H Mortgages Prohibition Against Subordinate Financing
Mortgage Insurance Premiums Equity & Appreciation Sharing
  Extinguishment of Subordinate Liens

Documentation Requirements 

            In addition to the standard FHA documentation requirements the following additional documentation for H4H loans must be included.   

  • Prior Mortgage Origination Date:  Evidence the mortgage(s) being refinanced was originated on/before January 1, 2008, such as a HUD-1 Settlement Statement or the mortgage payment history from the servicer.

  • Payment History:  If delinquent at the time of the refinance, evidence that the borrower made 6 full payments during the life of the first mortgage loan being refinanced, such as the mortgage payment history from the servicer.

·        Prior Total Mortgage Payment:  Evidence that the prior aggregate mortgage DTI was more than 31 percent on March 1, 2008, such as pay stubs for March 2008, or a signed and dated copy of the individual 2008 Federal tax return, when available, to determine gross monthly income for that month (earnings divided by 12), or W-2s, financial records, or verification of employment from the borrower’s employer.   

Lenders may also rely on the borrower’s signed and dated 2007 Federal tax return if the lender has no reason to believe that the borrower’s income in March 2008 was materially different than the income reported on the 2007 Federal tax return. 

·        To determine March 2008 income for self-employed borrowers, obtain a copy of the quarterly tax return that contains income stream information for March 2008 or a signed and dated Profit and Loss Statement and balance sheet that contains income stream information for March 2008 or a signed and dated copy of the individual 2008 Federal tax return, when available, (earnings divided by 12). 

From the servicer, evidence of what the borrower’s total mortgage payment was for March 2008, including any subordinate liens.  For mortgages without escrow accounts, evidence regarding the amount of taxes and the cost of hazard insurance and flood insurance (if applicable).  If the lender must estimate the cost of all insurance, it must document how it arrived at that estimate based on the property’s location and the rates in effect for 2008.  If the borrower does not provide information on real estate taxes, the lender must also include public record information. 

  • Primary Residence:  Evidence that the property is the borrower’s primary residence, such as a Federal or state tax return, driver’s license and/or voter registration card.

  • HOPE for Homeowners Consumer Disclosure and Certifications:  The initial and final HOPE for Homeowners Consumer Disclosure and Certifications, signed and dated by the borrower(s), along with the initial and final URLA and Addendum to the URLA.

  • Conviction of Fraud:  In instances where a warning is received that the borrower was convicted of fraud and the lender believes it is an error, the lender must document that the borrower has not been convicted of fraud under Federal or state law in last 10 years.

  • Tax Returns:  Copies of the previous two years Federal tax returns or transcripts of the borrower’s income tax returns obtained directly from IRS.

  • Trial Modification:  If a ‘trial modification’ period was used to exceed the 31/43 DTI ratios, the lender must document that the borrower, using his or her existing gross income, made timely mortgage payments on the existing senior mortgage pursuant to the terms of the trial modification for the three consecutive months preceding application for the H4H loan, and in an amount that is at least 90 percent of the estimated total monthly mortgage payment on the new H4H mortgage payment.

  • First Payment Made:  Evidence that the first payment on the new mortgage was made by the borrower and not by any interested party to the transaction, from the loan proceeds or escrowed at closing.

  • Lender Certifications:  The HOPE for Homeowners Lender and Underwriter General Certifications, signed by an officer of the lending institution and the Direct Endorsement Underwriter.

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