Step Four: Processing

We will order your appraisal and make sure the file is ready to submit to the underwriter. This involves reviewing signed documentation, the financial assessment, and looking at the preliminary title report. This can take 3-5 business days to complete. Once that is done the loan is submitted to an underwriter.

Underwriting takes 1-5 days. Sometimes files are clean and have little more to do and others, based on appraisal data, home repair requirements, credit, or title issues can require more due diligence and review.

The underwriter will provide an initial decision that is often an approval with conditions. Typically these conditions are always objective and simply follow the HUD Guidelines for HECM loans. Conditions may be repairs to the home, additional inspections required, or anything else that ensures that the loan meets FHA guidelines and compliance standards.

FHA guidelines

If you have a trust, a Trust Attorney will review your trust and your loan will be charged $250.

Your home must be maintained to meet HUD standards. As part of the loan origination process, we order an inspection of your home and the inspector will deliver a report indicating if repairs are required. If so, a portion of your loan may be set aside to pay for those repairs. It will then be your responsibility to hire a contractor to do the repairs. Once the repairs are completed, the contractor will sign a lien release form. Then the completed repairs are inspected. At that point, the Servicer will disburse the funds from the set-aside to pay the contractor and return any remaining funds to your loan proceeds.

You have one year from the closing date of the loan to complete the repairs. If repairs are not completed, loan payments will be suspended until they are completed or the Servicer may request approval from HUD to deem your loan is in default, allowing for foreclosure.

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