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Loan Prospector Updated to Reflect Recent FHA ChangesApril 15, 2009

To support changes recently announced by the Federal Housing Administration (FHA), we have updated Loan Prospector® to:

Updates to Align With Revised 2009 FHA Loan Limits

The U.S. Department of Housing and Urban Development (HUD) announced the revised FHA loan limits, based on the American Recovery and Reinvestment Act of 2009 (ARRA), in their February 24 Mortgagee Letter 2009-07. Under ARRA, the revised FHA loan limits for 2009 will be set at the higher of the loan limits established for 2008 under the Economic Stimulus Act of 2008 (ESA) or those established for 2009 under the Housing and Economic Recovery Act of 2008 (HERA).

FHA's floor and ceiling loan limits for 2009, based on the limits set forth in ARRA, will remain at $271,050 for a 1-unit single-family mortgage, but the loan limit ceiling in high-cost areas has increased from $625,500 to $729,750. The revised loan limits described in the February 24 Mortgagee Letter 2009-07 are effective for those loans that have credit approval on or after January 1, 2009.

Assessing Revised FHA Loan Limits With Loan Prospector

On February 25, we updated Loan Prospector to reflect the revised FHA loan limits set forth in ARRA. As a result, effective as of February 25, all new submissions and resubmissions of FHA loans through Loan Prospector, regardless of the FHA Case Number issue date, are assessed using the revised maximum loan amount, based on the county name entered. Check the FHA mortgage limits to ensure a county is within the metropolitan areas. In addition, Loan Prospector returns the following existing feedback message for all FHA loans assessed through Loan Prospector:

Message Code Feedback Message Purpose
LPN-BN The Maximum Mortgage Limit for ~PropCounty~ County, ~PropState~ is $~MaxMrtgLmt~. Indicates maximum FHA mortgage loan limit for a property.
PUR-FH Loan Amount Exceeds Maximum Mortgage Limit eligibility Indicates loan amount exceeds the loan limits.

We recommend resubmitting the loans that were in your pipeline after January 1, 2009, prior to delivering the loans to FHA Connection; pipeline loans will be assessed using the new 2009 loan limits. These limits are effective for those loans for which credit is approved in calendar year 2009, and will remain in effect until December 31, 2009.

Assessing Cash-Out Refinance Loans with Revised FHA Loan Limits

On April 1, we updated Loan Prospector to reflect the decrease of the maximum LTV/TLTV/HTLTV ratios from 95 percent to 85 percent for FHA loan limits on cash-out refinance loans, as announced in the March 12 Mortgagee Letter 2009-08.

As a result, all new submissions and resubmissions of FHA loans through Loan Prospector, regardless of the FHA Case Number issue date, are assessed using the lower LTV/TLTV/HTLTV maximums for cash-out refinance loans. Loan Prospector will return the following existing message if the maximum LTV/TLTV/HTLTV is exceeded:

Message Code Feedback Message Purpose
PUR-25 LTV/TLTV exceeds product limits. Indicates that the LTV/TLTV/HTLTV exceeds 85 percent.

If the FHA Case Number entered in Loan Prospector was issued on or before April 1, 2009, then you can disregard this purchase restriction feedback message and deliver the data to FHA Connection for assessment. For more details on FHA's revised refinance transactions, please refer to HUD's March 12 Mortgagee Letter 2009-08.

Please note the FHA Case Number must be entered on or before the last submission or FHA will not accept the loan. Keep in mind Loan Prospector is unable to determine the issue date based on the input FHA Case Number, so the above informational feedback message is provided to assist you with data validation.

Ensure FHA Case Number Data Integrity

When entering FHA Case Numbers in Loan Prospector, please make sure the case numbers are:

  • 10 digits numeric, do not include hyphens
  • Match the case number data in the HUD database

If the FHA Case Number you enter in Loan Prospector is incorrect, you will receive the following feedback message:

Message Code Feedback Message Purpose
DTE-HB Invalid FHA Case Number Indicates the data entered could not be validated by the FHA TOTAL scorecard. Please review for accuracy, update, and resubmit the loan.

The FHA Case Number field is not a required field for first submissions and may be left blank until you have an issued FHA Case Number; do not enter dummy data (i.e., 1234567890) in this field. If a loan is a pre-qualification, please leave the field blank, as the FHA Case Number is not issued in FHA Connection until a property is selected.

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