Wholesale ALERT – Updates for FHA and USDA, IRS Extension in CA
IRS Extension in California
Due to the impact of the series of natural disasters, the Internal Revenue Service (IRS) has issued an additional extension for the filing of 2022 tax returns until November 16, 2023. This extension is available for residents of all California counties EXCEPT Lassen, Modoc, and Shasta counties.
Borrowers utilizing the IRS extension must provide the following documentation:
· Evidence their Primary Residence is located in one of the impacted California counties
· Evidence of an existing extension filed with the IRS
Important Note: Freddie Mac will NOT honor this extension. As a result, the use of a tax filing extension for the 2022 tax year is NOT permitted for Freddie Mac loans with a Note Date on or after November 1, 2023. Please refer to Freddie Mac Selling Guide Section 5302.4 (b)(i) for complete details.
FHA
Arc Home will align with the update announced in FHA Mortgagee Letter 2023-17 for the topic noted below, effective immediately. This revision will be incorporated in the FHA Single Family Housing Policy Handbook 4000.1 (available HERE on the HUD website) at a later date.
· Accessory Dwelling Unit (ADU) Rental Income: Expanded guidelines to allow rental income from an Accessory Dwelling Unit (ADU) as Effective Income for the purposes of qualifying. The subject property must be a 1-unit residence with a single ADU. Refer to Mortgagee Letter 2023-17 for complete requirements and eligibility details of this improvement.
USDA – Guarantees Now Available
Guarantee Commitments for USDA loans are now available!
Files in Process: Arc Home loan guarantee requests that received Conditional Commitments (Form RD 3555-18/18E) “subject to the availability of commitment authority” will be obligated in the USDA financial system over the next 3-4 business days. An updated Conditional Commitment will be electronically generated to remove the “contingent upon” language, which signals the request has been successfully obligated by USDA. Note: Closing transactions are not eligible for submission to USDA until the loan is successfully obligated.
Loan Closing: Once the USDA loan has closed (including loans that were closed prior to the obligation of funds by the Agency), Arc Home will submit a request for the Loan Note Guarantee.