FHA Loan Documents Needed for Application, Underwriting and Closing

The 2024 FHA Loan Handbook

Do you plan to use an FHA loan to buy a house? If so, you should be prepared to provide, review, and sign a wide variety of documents. These documents are needed to complete the FHA loan application, underwriting and closing process — and they’re all important.

In this guide, we’ll review some of the items you’ll have to provide when applying for an FHA-insured mortgage loan, as well as the documents you’ll have to sign at closing.

Documents for FHA Loan Application and Underwriting

According to the Department of Housing and Urban Development (HUD), the government agency that manages this program: “The mortgage loan application package must contain all documentation that supports the lender’s decision to approve the loan.”

This includes a wide variety of documents relating to the borrower’s financial situation, as well as those pertaining to the property being purchased.

Commonly requested FHA documents include the following:

  • Amendatory Clause: This document is unique to FHA-insured home loans, though there is a similar version for VA loans. This clause gives the home buyer / borrower a way to back out of the deal (without sacrificing deposit money) if the home appraises below the agreed-upon sales price. The amendatory clause must be signed by both the buyer and seller, as well as their real estate agents.
  • Application: All borrowers who will assume responsibility for the mortgage debt must complete and sign a “Uniform Residential Loan Application” (URLA), also known as Fannie Mae Form 1003. This document is used for FHA and conventional mortgage loans alike. You can find an example online by Googling it.
  • Appraisal Report: HUD requires a home appraisal for all homes being purchased with an FHA-insured mortgage loan. It is the appraiser’s job to ensure the home meets minimum property requirements for this program, and also to determine the market value of the property. He or she will provide this information in the Uniform Residential Appraisal Report (URAR), also known as Fannie Mae Form 1004.
  • Assets: In addition to the banking documents mentioned below, you might have to submit a list of other assets including mutual funds, IRA / 401k, real estate, etc.
  • Bank Statements: Lenders review bank statements to ensure that you have the funds needed to cover your closing costs and down payments, at a minimum. They also use them to verify the source of your down payments funds, and to assess your recurring debts and expenses. Bank statements show money going in and out. 
  • Credit Reports: Mortgage companies request credit reports and scores from the credit-reporting bureaus and/or the score provider (such as FICO). This information shows how you have borrowed and repaid money in the past. It also helps the lender verify outstanding loans and other debts. Lenders request these documents directly from the three credit reporting bureaus—Experian, TransUnion and Equifax.
  • Debts. When applying for an FHA loan, you might have to provide a list of your current debts, such as credit cards, personal or student loans, car loan, etc. Lenders use such documents to analyze your debt-to-income ratio, and to make sure you’re not taking on too much debt with the addition of a home loan.
  • Form HUD-92900-A: In addition to the standard application form mentioned above, borrowers seeking an FHA loan must also complete and sign HUD Form 92900-A. It’s an addendum to the Uniform Residential Loan Application. With this document, the borrower confirms their understanding of the loan process, their obligation to repay, and the consequences of default.
  • Gift Letters: If you receive money from a friend, family member, or other approved donor to help cover your FHA loan down payment, you’ll need to obtain a gift letter from the donor. The donor must affirm that they do not expect repayment, sign the document, and provide their contact info.
  • Pay Stubs: Another important document for FHA loans, pay stubs help mortgage lenders verify your employment status as well as your current earnings. They’ll typically request the two most recent pay stubs, or enough to cover a 30-day period. But this requirement can vary from one FHA lender to the next.
  • Real Estate Certification: This document must be signed by both the buyer and the seller, as well as their real estate agents. All parties involved in the transaction must certify that the terms and conditions of the sales contract are true to the best of their knowledge.
  • Residences: Lenders often request a list of residential addresses for the last two years, and sometimes longer.
  • Sales Contract: Also known as the “purchase agreement,” you’ll have to provide this document after coming to an agreement with the seller. It must be signed by both parties. As per HUD’s guidelines, the mortgage company must include this document within the FHA loan application package.
  • Self-Employment. Home buyers who are self-employed often have to provide additional documents when applying for an FHA loan. This might include a profit-and-loss (P&L) statement, business tax returns, and sometimes a letter from a CPA. These documents are needed for underwriting and risk-assessment purposes.
  • SSN Verification: Lenders are required to obtain proof of the borrower’s Social Security Number. According to the official HUD guidelines for FHA loans: “All borrowers, including U.S. citizens, must have a valid Social Security Number (SSN) and must provide evidence of that SSN to the lender.” In most cases, a photocopy of the borrower’s Social Security card will suffice.
  • Tax Returns. Lenders typically want to see federal income tax returns for the last couple of years. They use these documents for income verification, an important part of the mortgage underwriting and approval process.
  • Verification of Employment: The Department of Housing and Urban Development requires FHA lenders to obtain verification of employment. This can be accomplished with a simple document that includes the employer’s name, address, and phone number.
  • W-2 Statements. You can expect to provide w-2 statements for the last two years. As with tax returns, these documents are used for income verification purposes.

Real estate transactions and FHA loan procedures can vary due to a number of factors. So there’s a chance you might have to provide additional documents to complete the FHA loan application and underwriting process. Additionally, some of the items listed above might not apply to your situation.

Documents You Might Have to Sign at Closing

During the closing process, you’ll review and sign a variety of documents related to (A) your mortgage loan and (B) the legal transfer of the home. In fact, it might be the most documents you’ve ever signed in one place at one time. So be prepared for that.

Depending on the specifics of your FHA loan and home purchase, you might have to sign some or all of the following documents at closing:

  • Closing Disclosure (CD): This document provides a summary of the final terms of the mortgage loan, including loan terms, projected monthly payments, and closing costs. You should receive it a few days before the closing, to review. Your lender is required to give you this disclosure at least three business days before you close, so you have time to review it and ask questions.
  • Promissory Note: This document states that the borrower is indebted to the lender and promises to pay their mortgage back in full (including the principal and interest rate) by a specified date. Promissory notes describe exactly what you’re agreeing to and provide you with details regarding your loan. It might also outline any penalties associated with prepaying your FHA loan
  • Mortgage Deed or Trust Deed: This document transfers ownership of the property to the buyer and serves as security for the loan. In some states, a Trust Deed is used instead of a Mortgage Deed. This document can also give the lender a claim or lien against the property, allowing them to take possession of the property through foreclosure if the homeowner fails to make mortgage payments as agreed upon.
  • Title Insurance Policy: This policy protects the buyer and lender from any issues with the property’s title, such as liens or ownership disputes, that may arise after the purchase.
  • Property Deed: This document officially transfers ownership of the property from the seller to the buyer. It establishes you (the buyer) as the rightful owner of the property. It’s common for both the buyer and seller to sign this document at closing.
  • Affidavits and Declarations: These documents may include statements affirming the buyer’s understanding of the terms of the loan and their financial situation.

Best Practices for Home Buyers

Be sure to ask questions about any documents you don’t understand, prior to signing them. You shouldn’t feel rushed or pressured during this process. There’s a lot at stake, both financially and legally, so you need to understand what you’re signing and what it means.

Here are some additional tips to help ensure a smooth loan transaction:

  • Stay organized: Keep all your documents in one central location, either physically or digitally. This will make it easier to track what you have and what you still need.
  • Start early: Refer to your lender’s checklist. Begin assembling things like tax returns, bank statements, and pay stubs as soon as possible. Don’t wait for last-minute requests.
  • Keep copies: Make copies of all documents before submitting them to your lender. This way, you have a backup in case anything gets lost or misplaced.
  • Choose digital: Opt for e-signatures and online document submission when possible. This can help streamline the process and avoid mailing delays.
  • Be honest: Provide truthful information on all documents. Lying or omitting information can lead to serious consequences, including loan denial or legal issues.
  • Keep in touch: Stay informed about the status of your loan application and any additional documents required. Regular communication with your lender can help keep the process on track.
  • Protect personal information: Be cautious about sharing personal information and documents. Only provide sensitive information to reputable and trusted sources, such as your lender or real estate agent.

If you found this article helpful, you’ll love our FHA loan handbook. We wrote it specifically for home buyers and borrowers. It’s factual, objective, up-to-date, and reader-friendly. And you can download a copy today, in PDF format.