FHA loans can be tricky to understand as there are so many different parameters to the program. For example, many people think that because of the name “FHA loan” that the FHA provides the funds for the loan. In reality, they do not provide any funds; they simply guarantee the loan. This means that the bank that does provide the funds for your loan is guaranteed to be backed up should you default on your loan in the future. As you can see, there are two entities involved here – the FHA and the funding bank. But just because the FHA does not fund your loan, does not mean that they do not have a say in how it goes down. If your loan profile does not meet their requirements, you will not get the loan. The date in which the FHA “accepts” your loan is called the endorsement date.
When is the FHA Endorsement Date?
The endorsement date for your FHA loan is not the date that you close on the loan, as many people mistakenly think. Instead, it is the date that the FHA accepts your loan. The actual date that this occurs depends on the lender you use and the method they use to send your loan for endorsement. In general, every lender has 60 days to send the required documents to the FHA in order to endorse your loan, but the length of time it takes is dependent on the number of files received and the lender sending the files. The endorsement date may become important if you plan on using the FHA streamline program, as it will determine the amount of future MIP that you pay should you refinance.
The FHA Endorsement Date does not Hold you Back from Refinancing
The endorsement date is strictly used to help determine the amount of MIP you will pay on your new loan should you decide to refinance. It does not determine when you can use the streamline refinance program, which many people use that want to lower their payment. The FHA streamline program only requires that you hold your loan for at least 6 months, making each of those payments on time. If you have a late payment during that time, you may have to wait until you have 3 consecutive months with no late payments and only one late payment in the months prior to that time, up to 12 months. For example, if your closing date was at the end of April and your first payment was due June 1st, you are eligible to streamline refinance on December 1st. Your endorsement date might not have occurred until late June or even early July, but as long as you made those 6 consecutive payments and they were on time, the endorsement date would not matter.
Finding out the Endorsement Date
If you need to know the endorsement date for your FHA loan, there is a simple process to find out what it is either on your own or through your loan officer. If you want to find out yourself, call 800-697-6967 and provide your FHA case number, which you can find on your closing documents. The representative can then look up your endorsement date for you. If you want to go through your loan officer, you simply provide the same information to him and he will find out the date for you. This will help you price out your refinance accordingly in order to ensure that you are able to afford the new loan with the appropriate MIP rates.
The FHA endorsement date does not have any effect on your ability to get approved for an FHA refinance, but it does determine your MIP rates. Older loans might have lower MIP rates because of the rates they originally paid that are being grandfathered in. You can talk to your loan officer to find out exactly how your original loan would affect your new MIP rates to see if it is worth it for you to refinance into a new FHA loan.