Back to top

Lender Alerts

Lender Alerts

Sun West Logo

Payment History Requirement on FHA Cash-Out
Refinances in Disaster Area

Dear Licensed Partner,

Sun West is providing clarification on payment history requirements for FHA Cash Out refinances for borrowers who are in forbearance agreement with their lender due to a Major Disaster.

As per HUD Handbook 4000.1, all Cash Out refinance transactions must meet the following Payment History Requirements:

  • Borrower must have made all mortgage payments for all the properties as agreed for last 12 months or since the Borrower obtained the mortgages, whichever is less.
  • Additionally, the payments for all mortgages for the subject property must be current at the time of funding.

If borrower had “late” payment during the disaster relief period, Sun West will not consider it as late payments. Sun West will analyze the borrower's payment history for the period before and after the forbearance period in order to meet the Payment History Requirements for the previous 12 months.

To ensure the above requirement from HUD handbook 4000.1 is met, Sun West requires the mortgage to be current at the time of closing. The deferred mortgage interest cannot be financed into the loan and must be paid prior to or at closing with the borrower’s own funds.

For additional questions not answered by the guideline, please email Sun West's underwriting scenario desk at for more information.

If you have any questions, please contact your Client Relations Manager at (855) OK-SUNWEST or (855) 657-8693.


Sun West Mortgage Company, Inc.

18000 Studebaker Road, Suite 200
Cerritos, CA 90703
Phone: (800) 453-7884

SW-1: Our No Overlays Program

This information is provided to licensed brokers/lenders only and may not be copied or distributed to customers or potential customers. All loans are subject to approval. Certain restrictions may apply. Listed pricing is a morning indication only. Program rates, prices, guidelines, fees, costs, terms and conditions are subject to change without notice.

Equal Housing Opportunity