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Verification of Rent
Does HUD, VA, USDA, FANNIE MAE, and Freddie Mac require verification of rent? How about non-QM lenders? Do they require verification of rent or verification of mortgage?
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Verification of Rent and Mortgage: Overview by Lender Type
Different lenders have different requirements for verifying rent and mortgage history while applying for a mortgage.
Below is a summary of several types of lenders, including HUD (FHA), VA, USDA, Fannie Mae, Freddie Mac, and non-QM.
HUD (FHA Loans)
Verification of Rent: In most cases, mortgages on FHA loans require verification of rent payments. It could be obtained through a landlord’s verification form, canceled checks, or bank account statements.
Verification of Mortgage: A warranty deed of the current mortgage should also be provided for refinancers.
VA Loans
Verification of Rent: Some documentation may be needed for VA loans to verify rent payments, especially if the borrower lacks a good credit profile. The same documentation methods as those used with FHA apply.
Verification of Mortgage: Confirming the current mortgage is a prerequisite for refinancing.
USDA Loans
Verification of Rent: In the same line, USDA loans would also require proof of rent verification, more so where the borrower uses the rent to supplement their creditworthiness.
Verification of Mortgage: Besides, the current existing mortgage would also need confirmation for refinancing.
Fannie Mae and Freddie Mac
Verification of Rent: Fannie Mae and Freddie Mac have very similar policies regarding rent verification, as the majority of their clients who request a loan lack a credit history (no score). Similar procedures may apply as employed by the FHA.
Verification of Mortgage: When refinancing, both Fannie Mae and Freddie Mac check the mortgage to be refinanced.
Non-QM Lenders
Verification of Rent: Qualified Mortgage Non-QM lenders appear to have less stringent guidelines and may not need the customary verification of the lease or rent. However, some papers may be required to determine the customer’s repayment ability.
Verification of Mortgage: Non-QM lenders usually require existing mortgages to be corroborated, but some issues, such as language, may be sufficiently different depending on the particular lender and underwriting guidelines.
In short, Fannie Mae, FHA, VA, USDA, and Freddie Mac usually only extend loans if they verify rent and the existing mortgage. Non-QM lenders can easily give loans as they can modify or even eliminate some requirements, but this depends on the lender. Always ask about the guidelines and requirements when referring to a specific lender.