The following replaces announcement 12-04 New FHA overlays for 2-4 Unit Properties and 12-12 Additional FHA Overlays for 2-4 Unit Properties in their entirety. This is effective immediately for both active pipeline and new submissions.

The following FHA overlays only apply to 2-4 unit properties in Illinois, and 3-4 unit properties in New York and New Jersey.

  • At least one full calendar year must have elapsed between the Seller’s acquisition date the execution of the Sales Contract. This does not apply if the Seller is a government agency, a bank, or a bank subsidiary.
  • The subject property must not be in foreclosure, as defined by the listing of a Lis Pendens (or equivalent) in the title binder.
  • The “2-4 Unit Identity-of-Interest Certification” must be executed at closing by the Buyer and Seller attesting that there is no IOI relationship.
  • Maximum DTI 45.00%; and
  • If LTV >90%, then no gifts or grants are permitted.

The following FHA overlays apply to all 2-4 unit properties regardless of geographic area.

  • All 2-4 unit properties subject to a Short Sale Agreement must have been listed on the MLS for at least 30 days prior to the execution of the Sales Contract. If the property is designated on the MLS as an “Exclusive Listing” (meaning that only the Listing Agent has the right to show the house to buyers), the property is ineligible.