The Federal Housing Administration extended through December 31 COVID-19 policies for verifying self-employment and rental income.
Details were provided in Mortgagee Letter 2020-40 and impact both FHA forward mortgages and reverse mortgages. The policies, first announced in July in Mortgagee Letter 2020-24, were due to expire on November 30.
Because of COVID-19, Mortgagees are experiencing an additional layer of challenge as they attempt to determine income stability for self-employed borrowers and for borrowers who rely on receipt of rental income.
“In recognition of these and other challenges that Mortgagees are experiencing during these unprecedented times, FHA is temporarily updating its income requirements for self-employed borrowers and borrowers who rely on the receipt of rental income to qualify for an FHA-insured mortgage,” says ML 2020-40.