FHA Management
View the "Processing FHA 203b Loans" Quick Reference Guide
View the "Processing FHA 203(k) Purchase Loans" Quick Reference Guide
View the "Processing FHA 203(k) Refinance Loans" Quick Reference Guide
View the "Processing FHA 203(k) Loans in Encompass" Guide (Encompass 17.3 and later)
View the "Processing FHA 203(k) Loans in Encompass" Guide (Encompass 17.2 and earlier)
The FHA Management form provides a convenient, central location for recording FHA-related information and accessing other forms used to complete FHA loans. Use the FHA-integration features on the Tracking tab to electronically request, retrieve, and manage information from the FHA Connection website database.
Before you open the FHA Management form, complete the Borrower Summary and the 1003 Loan Application. As you begin working on the FHA Management form, complete any fields that are not already populated from the Borrower Summary and the 1003, and then use the FHA-integration features on the tracking tab to retrieve information from the FHA Connection website database. Click the links on the title bar on the upper-right to access information from related forms such as the 1003, GFE, and REGZ.
Use the Basic Info tab to record information about the borrower, subject property, and loan, as well as additional FHA-related information for the loan. Most fields in the Borrower Information, Property Information, and Loan Information sections should already be completed based on entries in the Borrower Summary and 1003. Complete any missing information in these sections, and then complete the FHA Information section.
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Enter the FHA Case #.
Note: When the number is recorded on the Basic Information tab, it is copied to the Tracking tab, and vice versa.
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Select the SOA (Section of Act) that applies to the loan.
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Type or select entries for the loan-related dates, if not already entered.
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Enter the CHUMs ID numbers for the AUS/Manual and the Underwriter responsible for reviewing the appraisal.
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Enter the Investor Name and Investor Loan Number. Click the Find icon to apply the information from a predefined investor template.
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Complete the information for the Lender and Sponsor/Agent. Click the Address Book icon to select from your business contacts.
At the top of the tab, a Purpose of Loan option should already be selected based on information entered in the 1003. The remaining entries on the tab will change, depending on the Purpose of Loan option selected. To complete the entries, use the appropriate procedure below.
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In the Mortgage Calculation section, enter the Appraised Value, if not already entered.
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Click the Lock icon for the LTV Factor to enter the LTV factor manually.
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Enter the Unpaid Principal Balance (on the existing mortgage).
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Enter the amount for Borrower paid repairs, if applicable.
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Enter the MIP Refund amount for any previously paid mortgage insurance premium that will be refunded to the borrower at the close of the loan.
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Enter a Base Loan Amount, if not already entered.
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Select the Round to Nearest $50 checkbox, if applicable.
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Click the Edit icon for UFMIP to open the MIP/PMI/Guarantee Fee Calculation window. You can then clicking the Get MI button to import mortgage insurance data from FHA MI tables. For detailed information about using the calculator, refer to Calculating Mortgage Insurance Premiums and Payments.
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In the Ratio section, enter the required Top Ratio and Bottom Ratio, if not already entered.
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Click the Income and Expenses button to view the income and expenses information.
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In the EEM section, click Calculate Mortgage to calculate Energy Efficient Mortgage ratios and add the information to the Remarks section. Type additional notes, remarks, and comments as required.
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Alternatively click the Lock icon to open the Energy Eff. Improvements field for manual entry or to clear and lock the field. If you change the value in the Energy Eff. Improvements field (ID 1721), delete the ratio information and click Calculate Mortgage again.
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In the Mortgage Calculation section, click the Calendar icon to select a Purchase Date or manually enter the a date in MM/DD/YYYY format.
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Enter a Base Loan Amount, if not already entered.
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Select the Round to Nearest $50 checkbox, if applicable.
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Click the Edit icon for UFMIP to open the MIP/PMI/Guarantee Fee Calculation window. You can then clicking the Get MI button to import mortgage insurance data from FHA MI tables. For detailed information about using the calculator, refer to Calculating Mortgage Insurance Premiums and Payments.
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In the Ratio section, enter the required Top Ratio and Bottom Ratio, if not already entered.
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Click the Income and Expenses button to view the income and expenses information.
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In the EEM section, click Calculate Mortgage to calculate Energy Efficient Mortgage ratios and add the information to the Remarks section. Type additional notes, remarks, and comments as required.
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Alternatively click the Lock icon to open the Energy Eff. Improvements field for manual entry or to clear and lock the field. If you change the value in the Energy Eff. Improvements field (ID 1721), delete the ratio information and click Calculate Mortgage again.
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In the Mortgage Calculation section, enter the Appraised Value, Purchase Price, and the Base Loan Amount, if not already entered.
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Enter the amount for Repairs or Improvements, if applicable.
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Select the Round to Nearest $50 checkbox, if applicable.
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To import mortgage insurance data from the FHA MI tables, click the Edit icon next to the UF/MIP entry. When the MIP/PMI/Guarantee Fee calculator opens, click the Get MI button. For detailed information about using the calculator, refer to Calculating Mortgage Insurance Premiums and Payments.
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In the Ratio section, enter the required Top Ratio and Bottom Ratio, if not already entered.
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Click the Income and Expense button to view the income and expense information on the 1003 Page 2.
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In the EEM section, click Calculate Mortgage to calculate Energy Efficient Mortgage ratios and add the information to the Remarks section. Type additional notes, remarks, and comments as required.
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Alternately click the Lock icon to open the Energy Eff. Improvements field for manual entry, or to clear and lock the field. If you change the value in the Energy Eff. Improvements field (ID 1721), delete the ratio information and click Calculate Mortgage again.
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In the Seller contribution section, enter the total amount contributed by the seller, if not already entered.
Use the FHA 203k tab to record purchase and refinance data for entry on the FHA 203k Calculator on the FHA Connection website. Some fields are free-entry fields. Other fields are calculated based on those entries. Some of the calculated fields can be edited by clicking the Lock icon and editing the entry.
203k Limited Program - Select the 203(k) Limited Program checkbox at the top of the form to indicate that the loan is for a 203(k) Limited Program. Different fields display on the tab depending on whether the checkbox is selected or cleared.
Enter data for a 203(k) purchase loan
Step 1: Establishing Financeable Repair and Improvement Costs, Fees and Reserves
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In section A, type the amounts for different categories of repair and improvement costs, and fee totals.
When the 203(k) Limited Program checkbox is selected, the data entry fields for lines A2, A3, and A7 in Step 1 are cleared and are not editable.
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In line B, type the amount of the reserves allotted to cover the cost of repair overruns.
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In line C, type the amount total value of the mortgage payments placed in escrow during the rehabilitation.
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In line D, edit the origination fee, as needed, and then type the percent value for the discount points that apply to the repair and improvements costs for 1A.
Step 2: Establishing Value
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In line B, type any seller concession as an inducement to purchase in excess of 6% of the sales price.
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In line C, edit the amount as needed.
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In line D, type the value of the subject property in its current condition, with no improvements.
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In line F, type the estimated value of the subject property after planned improvements.
Step 3: Calculating Maximum Mortgage
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Edit lines A, B, and D as needed.
- In line C, enter any credits for removing lead-based paint. Credits entered in this field will reduce the calculated maximum mortgage amount (Step 3D) by the amount of the credit.
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In line E, type the Nationwide Mortgage limit. Refer to the HUD website for current values.
Step 4: Additions to Base Mortgage Amount
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In line A, type the amount of the Energy Efficient Improvements.
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In line C, type the actual costs of a solar of wind energy system.
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Line G is calculated as the lesser of (line 4B plus line 4E) or line 4F. Click the Edit icon to adjust the amount as needed.
Step 5: Calculating the LTV for Application of Annual MIP
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Encompass automatically calculates the MIP LTV and the Case LTV ratios.
The LTV in the Encompass header uses the value from the first field listed in the calculation portion of Step 3D (field ID MAX23K.X86) for property valuation.
Step 6: Establishing the Rehabilitation Escrow Account
- Line B is populated with the Energy Efficient Improvement Amount from line 4A, but can be edited as needed.
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In line D, enter the funds that the borrower is providing to the rehabilitation escrow account for contingency funds.
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In section F, enter the amounts related to the initial draw at close.
Entering data for a 203(k) refinance loan
Step 1: Establishing Financeable Repair and Improvement Costs, Fees and Reserves
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In section A, type the amounts for different categories of repair and improvement costs, and fee totals.
When the 203(k) Limited Program checkbox is selected, the data entry fields for lines A2, A3, and A7 in Step 1 are cleared and are not editable.
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In line B, type the amount of the reserves allotted to cover the cost of repair overruns.
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In line C, type the total amount of the mortgage payments placed in escrow during the rehabilitation.
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In section D, edit the origination fee, as needed, and then type the percent value for the Discount Points that apply to the repair and improvements costs for 1A.
Step 2: Establishing Value
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In line A, click the Edit icon to open a pop-up window and enter the relevant itemized entries listed below. The sum of the itemized entries are populated at the bottom of the window and on line 2A on the FHA 203k tab in the Total Existing Debt for 203(k) field:
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Unpaid Principal Balance (First Lien) – Unpaid principal balance of the first mortgage as of the month prior to mortgage disbursement.
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Unpaid Principal Balance (Purchase Junior Lien) – Unpaid principal balance of any purchase money junior mortgage as of the month prior to mortgage disbursement.
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Unpaid Principal Balance of any junior liens > 12 months – Unpaid principal balance of any junior liens over 12 months old as of the date of mortgage disbursement. If the balance or any portion of an equity line of credit in excess of $1,000 was advanced within the past 12 months and was for purposes other than repairs and rehabilitation of the property, that portion above and beyond $1,000 of the line of credit is not eligible for inclusion in the new mortgage
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Interest due on the existing mortgage(s)
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Mortgage insurance premium (MIP) due on the existing mortgage(s)
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Any prepayment penalties assessed
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Late charges
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Escrow shortages
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In line C, enter the projected mortgage closing costs and prepaid items.
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In line E, enter the value of the subject property in its current condition prior to improvements.
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In line G, enter the estimated value of the subject property after planned improvements.
Step 3: Calculating Maximum Mortgage
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Click the Edit icons to adjust the amounts for lines A, B, C, and D as needed.
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In line E, type the Nationwide Mortgage limit.
Step 4: Additions to Base Mortgage Amount
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In line A, type the amount of the Energy Efficient Improvements.
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In line C, type the actual costs of a solar of wind energy system.
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Line G is calculated as the lesser of (line 4B plus line 4E) or line 4F. Click the Edit icon to adjust the amount as needed.
Step 5: Calculating the LTV for Application of Annual MIP
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Encompass automatically calculates the MIP LTV and the Case LTV ratios.
The LTV in the Encompass header uses the value from the first field listed in the calculation portion of Step 3D (field ID MAX23K.X86) for property valuation.
Step 6: Establishing the Rehabilitation Escrow Account
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Line B is populated with the Energy Efficient Improvement Amount from line 4A, but can be edited as needed.
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In line D, enter the funds that the borrower is providing to the rehabilitation escrow account for contingency funds.
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In section F, enter the amounts related to the in initial draw at close.
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From the dropdown list, select a description of how the net interest income on the 203(k) Rehabilitation Escrow Account will be handled.
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If you select Other from the dropdown list, enter a description of how the net interest income will be handled.
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Your selections here will be printed to the HUD-92700-A (203(k) Borrower’s Acknowledgment Statement) output form.
Use the Tracking tab to obtain information from the FHA Connection database, and to record and manage additional FHA-related loan information.
Use the appropriate button (Obtain, Check Holdings, or Validate) to request and retrieve information from the FHA Connection website database.
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Click the Obtain button.
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If prompted, enter your login credentials, and then click OK.
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On the Case Number Assignment window, complete the information for these required fields:
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ADP Code - ADP codes are listed in Appendix III of Handbook 4000.2. Click the icon to the right of the field to open an FHA website that lists commonly used codes.
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Program Identifier - Program Codes are listed in Appendix V of Handbook 4000.2. Use the code that best describes the FHA loan program.
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Field Office - Select the FHA field office in your area.
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Complete any additional information you want to enter, and then click Send Request.
Note: Select the Validate Address checkbox to validate the address at the same time that the case number is being assigned. Select the Validate Borrower checkbox to validate the borrower’s social security number.
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If required information is missing from the loan file, a list of the missing information displays.
Note: For loan fields that display on the list, double-click an entry to open a form with the field highlighted for easy entry.
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After entering the missing information, return to the FHA Management form and repeat the process for ordering the FHA Case Number.
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When the Import Results window displays, click Import Result Data.
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The Date, By, and Case Number fields are populated.
Note: If you receive a message asking you to check the holdings, wait 24 hours and then click the Check Holdings button to view the status of the request.
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If issues prevent the FHA from assigning an FHA Case number, you will receive an error message asking you to check the holdings at a later time. Wait 24 hours, and then use the Check Holdings button to view the status of the request.
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Click the Check Holdings button.
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If prompted, enter your login credentials, and then click OK.
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The View Case Assignment Status window displays one of two results:
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A message will describe whether the case has been approved or rejected.
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A list of outstanding issues will display if the case is still being reviewed. Click the Check Holdings button at a later time to check the updated status.
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Click the View Findings button to view the status of your request.
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If prompted, enter your login credentials, and then click OK.
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Click the Validate button.
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If prompted, enter your login credentials, and then click OK.
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If required information is missing from the loan file, a list of the missing information displays.
Note: For loan fields that display on the list, double-click an entry to open a form with the field highlighted for easy entry.
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After entering the missing information, return to the FHA Management form and repeat the process for validating the address.
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When the Import Results window displays, click Import Result Data.
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The Date, By, and message (field ID: 3063) fields are populated.
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To request authorization for refinance loans, click the Order button.
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If prompted, enter your login credentials, and then click OK.
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Select one of the following Refi Authorization Request options from the list, and then click Send Request.
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Select Query to request a new authorization.
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Select Update if you have changed the information for a previously authorized loan and need to re-authorize.
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If required information is missing from the loan file, a list of the missing information displays.
Note: For loan fields that display on the list, double-click an entry to open a form with the field highlighted for easy entry.
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After entering the missing information, return to the FHA Management form and repeat the process for ordering the Refi Authorization.
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When the Import Results window displays, click Import Result Data.
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The Date, By, and Old FHA Case # fields are populated.
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Click the Obtain button.
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If prompted, enter your login credentials, and then click OK.
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Select an Agency Identifier from the list, and then click Send Request.
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If required information is missing from the loan file, a list of the missing information displays.
Note: For loan fields that display on the list, double-click an entry to open a form with the field highlighted for easy entry.
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After entering the missing information, return to the FHA Management form and repeat the process for ordering the CAIVRS number.
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When the Import Results window displays, click Import Result Data.
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The Date, By, Borrower CAIVRS #, and Co-Borrower CAIVRS # fields are populated.
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Click the LDP Search or SAM Search button to search the government websites that list borrowers who are disqualified from receiving FHA loans.
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Follow the instructions on the website to search for the loan’s borrower and co-borrower.
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After completing the search, select the appropriate checkboxes for the borrower and co-borrower to indicate whether they were found in the LDP or SAM search as an individual who has been disqualified from receiving FHA loans.
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Enter the Date and type your Encompass user ID in the By field.
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Select a checkbox to indicate whether the FHA’s TOTAL Mortgage Scoreboard system returned an A/A (accept/approve) or Refer risk class for the loan.
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Enter the date and type your Encompass user ID in the By field.
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Click the Search button.
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If prompted, enter your login credentials, and then click OK.
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Enter your search criteria on the Condo PUD Lookup screen, and then click the Search button.
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Select a Condo or PUD from the list, and then click Select.
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Review the field values that display on the Import Results window, and then click Import Result Data to import the values into the loan file.
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The Date, By, and Condo/Pud ID fields are populated.
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Click the Appraiser Lookup button.
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If prompted, enter your login credentials, and then click OK.
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Enter your search criteria, and then click Search.
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Select an Appraiser from the list, and then click Select.
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Review the value that will be imported into the loan file, and then click Import Result Data.
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Type the Company Name for the appraisal company, or click the Address Book icon to select an appraisal company from your business contacts.
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Click the Log button to log the appraisal with the FHA and record the date and the Encompass user ID of the individual who clicked the Log button.
Note: Before mortgage insurance has been issued for a loan, you can click the Log button to add, change, or view the appraisal information. After the loan has been insured, you can only view the information.
The mortgage insurance information is entered after the loan closes.
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UFMIP Remittance - Enter the amounts, dates, and verification code associated with the UFMIP remittances, and type your Encompass use ID in the By field.
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Monthly Insurance Premium – Enter the amount and dates associated with the monthly mortgage insurance payments.
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Mortgage Insurance Application - Enter the dates associated with the mortgage insurance application, and type your Encompass use ID in the By field.
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Enter the date when the case binder for the loan is uploaded to the FHA Connection website.
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Type the Encompass user ID of the individual who uploaded the case binder to the FHA Connection website.