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TBD Underwriting DPA FHA Loans
Today’s meeting with Yvonne Schinzel has been rescheduled to Tuesday, August 8th, due to severe storms by Yvonne at 2 pm CDT. Important meeting. We will go over TBD Underwriting Pre-Approvals and Down Payment Assistance programs. TBD underwriting is when the borrower’s file is submitted without a property and is fully underwritten by a mortgage underwriter and a conditional loan approval is issued. It is like a loan commitment without the property. Once the borrower gets the property, the real estate purchase contract is submitted to the same underwriter. The property is then underwritten, the appraisal is ordered and reviewed, and the clear to close is issued. I used to do this all the time, and it is a game changer. Almost like a cash offer, and sellers love it. We have our preferred wholesale lending partner Christian Sorenson at EPM with a forgivable down payment assistance program, which is our best DPA loan program. Still, the maximum DTI is 48.99/48.99, and only borrower paid. Cameron LeClair from the Lender is our second preferred lender of choice, but the down payment is a non-forgivable, full 46.9%/56.9% DTI with approve/eligible but the borrower needs 680 FICO, which is weeding out a lot of people. On the other hand, Yvonne has a DPA non-forgivable program with a minimum 600 FICO, and a debt-to-income ratio can go up to 46.9%/56.9%. Lender paid compensation.
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TBD Underwriting, Pre-Approvals, and Down Payment Assistance (DPA) ProgramsWhat is TBD Underwriting?
TBD (To Be Determined) underwriting is a process where the borrower’s file is submitted for underwriting without an identified property. Here’s a step-by-step overview of how it works:
Initial Submission: The borrower’s financial information is submitted to a mortgage underwriter.
Conditional Loan Approval: The underwriter reviews the file and issues a conditional loan approval, akin to a loan commitment without the property details.
Property Identification: Once the borrower finds a property, the real estate purchase contract is submitted to the same underwriter.
Property Underwriting: The property is underwritten, an appraisal is ordered and reviewed, and final approval is issued.
Clear to Close: Once all conditions are met, a clear to close is issued.
Benefits of TBD Underwriting
- Stronger Offers: A pre-approved borrower with conditional loan approval can make offers almost as strong as cash offers, which sellers find attractive.
- Speed: Once a property is identified, the closing process can be quicker because much of the underwriting has already been completed.
Down Payment Assistance (DPA) Programs
DPA programs are designed to help borrowers with the down payment and closing costs of purchasing a home. Here are some examples of the DPA programs you mentioned:
Forgivable DPA Program with EPM:
- Lender: Christian Sorenson at EPM
- Type: Forgivable
- DTI Limit: 48.99% for both front-end and back-end ratios
- Compensation: Borrower paid
- Features: Forgivable down payment assistance, making it a highly attractive option for borrowers who meet the criteria.
Non-Forgivable DPA Program with Cameron LeClair:
- Lender: Cameron LeClair
- Type: Non-Forgivable
- DTI Limit: 46.9% front-end, 56.9% back-end
- FICO Requirement: Minimum 680
- Compensation: Borrower paid
- Features: Requires higher credit scores, which may limit eligibility but offers substantial assistance.
Non-Forgivable DPA Program with Yvonne:
- Lender: Yvonne
- Type: Non-Forgivable
- DTI Limit: 46.9% front-end, 56.9% back-end
- FICO Requirement: Minimum 600
- Compensation: Lender paid
- Features: Lower credit score requirement, making it accessible to more borrowers, but the assistance is non-forgivable.
Summary of Preferred Lenders and Programs
EPM (Christian Sorenson):
- Program: Forgivable DPA
- DTI: 48.99/48.99
- Compensation: Borrower paid
- Pros: Forgive assistance, attractive to borrowers.
The Lender Wholesale Mortgage Lender
- Program: Non-Forgivable DPA
- DTI: 46.9/56.9
- FICO Requirement: 680
- Compensation: Borrower paid
- Pros: Higher DTI limit but stringent credit requirements.
Foundation Wholesale Mortgage
- Non-Forgivable DPA
- DTI: 46.9/56.9
- FICO Requirement: 600
- Compensation: Lender paid
- Pros: Accessible with lower credit score, though non-forgivable.
TBD underwriting combined with down payment assistance programs can significantly benefit homebuyers, particularly those with less-than-perfect credit or those who need financial assistance for the down payment. Buyers can strengthen their offers by leveraging these programs and potentially expediting homebuying. Understanding the nuances of each DPA program and lender requirements will help you select the best option.
https://gustancho.com/fully-underwritten-tbd-mortgage-approval/
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Fully Underwritten TBD Mortgage Approval As Pre-Approvals
Fully Underwritten TBD Mortgage Approval are full approvals for borrower on manual underwrites and tougher mortgages without the property