FHA issued Mortgagee Letter 2022-09, updating the effective income calculation with respect to a COVID-19 related economic event. Per the Mortgagee Letter, FHA updated the effective income calculation for borrowers who experienced a gap in employment and/or a reduction or loss of income due to a COVID-19 related economic event, where the borrower’s effective income is now stable. A COVID-19 Related Economic Event is defined as a temporary: (1) loss of employment, (2) reduction of income, and/or (3) reduction of hours worked during the Presidentially-Declared COVID-19 National Emergency. The following sections of the Single Family Housing Policy Handbook 4000.1 have been updated:
- Primary Employment (Sections II.A.4.c.iii and II.A.5.b.iii);
- Part-Time Employment (Sections II.A.4.c.iv and II.A.5.b.iv);
- Overtime, Bonus or Tip Income (Sections II.A.4.c.v and II.A.5.b.v);
- Employed by Family-Owned Business (Sections II.A.4.c.viii and II.A.5.b.viii);
- Commission Income (Sections II.A.4.c.ix and II.A.5.b.ix);
- Self-Employment Income (Sections II.A.4.c.x and II.A.5.b.x); and
- Additional Required Analysis of Stability of Employment Income (Sections II.A.4.c.xi and II.A.5.b.xi).
The provisions of this Mortgagee Letter are effective for all case numbers assigned on or after September 5, 2022 (however, mortgagees may begin using the policies immediately).
Click to view the FHA Mortgagee Letter 2022-09: https://www.tenaco.com/wp-content/uploads/2022/07/FHA-Mortgagee-Letter-2022-09-07-07-22.pdf
Click to view the FHA Info #2022-69: https://www.tenaco.com/wp-content/uploads/2022/07/FHA-Info-2022-69-07-07-22.pdf
