What Does an FHA Underwriter Do?

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  • Written By: Kristie Lorette
  • Edited By: O. Wallace
  • Last Modified Date: 19 November 2019
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An underwriter is an employee at a mortgage company that decides whether to approve or deny the mortgage loan that the applicant is seeking. FHA stands for the Federal Housing Authority, which is a government agency that falls under the U.S. Department of Housing and Urban Development (HUD). An FHA underwriter uses the underwriting guidelines that are determined by HUD for FHA-insured loans to assess whether or not to provide the mortgage to the applicant.

When an applicant applies for an FHA loan, it is through a traditional mortgage lender, such as a bank, that offers FHA mortgage programs. FHA mortgages are government backed or insured mortgages, which means that if the borrower defaults on the mortgage, FHA still pays the lender a percentage of the mortgage balance.

The purpose of FHA is to encourage homeownership, but it still has its own set of criteria and guidelines that applicants must meet in order to obtain an FHA mortgage. A loan officer works with the applicant to collect all of the information that must go into the mortgage file before it goes to the FHA underwriter for a decision.


Putting the file together includes collecting and verifying the mortgage application. The loan officer will also collect the applicant’s bank statements, paystubs, order the title work on the property and the appraisal of the property as well. As all of these forms come in, the loan officer reviews them for accuracy, in preparation to send the file to the FHA underwriter.

Once the file is complete, the FHA underwriter reviews each piece of information in the file. The underwriter is verifying that the information on the applicant meets the guidelines that are set by FHA and HUD for the applicant to get the loan. The FHA underwriter may deny or approve the file based on the information in the file.

The FHA underwriter also has the option to approve the file, but with contingencies. For example, sometimes the mortgage file goes to the underwriter to approve the applicant before a property has been chosen. The FHA underwriter can choose to approve the file, contingent on the fact that the appraisal and title work comes back at the correct value and is clear. This means that when the title work and the appraisal are done, the file goes back to the FHA underwriter for them to clear these contingencies so that the file can go to closing.


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