Articles Published in: January 2011

January 20, 2011

FHA Loans and Non-Residential Use

An FHA insured home loan for a single family property has rules that govern the use of the home when it comes to what the FHA defines as "non-residential" purposes. FHA requirements say appraisers must evaluate a property on a square footage basis for homes that have a portion of that footage dedicated to business use. FHA rules say that any home, condo or multi-unit property must use no more than 25% of the square footage for business or non-residential use.

January 20, 2011

FHA Loans for Unique Properties

By Joe Wallace

House hunting has some unique challenges depending on the type of property a buyer wants. When an FHA loan applicant finds a home that isn't quite standard but still desirable, the buyer and seller alike may be a bit nervous when it's time to have the property looked over by an FHA assigned appraiser. Sometimes establishing fair market value isn't the reason for those nervous feelings; the buyer and/or seller might be worried the property won't get appraised at all because of those features.

January 19, 2011

What is the FHA Definition of a Manufactured Home?

By Joe Wallace

FHA home loans are available for mobile homes, manufactured homes and/or modular homes. How does the FHA define a manufactured home and how is it different than a new construction or existing construction suburban home? Much depends on the status of the manufactured home and how it is assembled. According to the FHA official site, a manufactured home differs from a new construction project in one very important way.

January 18, 2011

Title I Loan Facts

By Bruce Reichstein

There are many options available to FHA borrowers to make improvements on the property they bought with an FHA guaranteed loan. One option is the Title I program, which allows property owners to make "non luxury" improvements to a home, which may include construction of new structures in some cases. As with all other FHA loans and HUD programs, the FHA does not lend the money. It insures Title I loans the same way it does with FHA home loans; the borrower and a participating lender work together on the application and terms. Title I loans are for borrowers with single-family homes, multi-family properties, and manufactured homes.

January 18, 2011

FHA Loans: The Inspection

By Bruce Reichstein

FHA home inspections are an important part of the FHA loan process. The home inspection is not mandatory, but a home buyer should never assume that the FHA appraisal was able to spot potential problems with the home. The FHA appraiser comes to establish fair market value and to insure the property lives up to the FHA minimum property standards. The word "minimum" is the key in that phrase, which is why an FHA loan applicant should always hire a property inspector to look at the house before a commitment to buy is made.

January 17, 2011

FHA Warns of Deceptive Home Improvement Schemes

By Bruce Reichstein

The FHA and HUD issue loans to homeowners who want to initiate home improvement projects. Some FHA insured loans require the borrower to complete the work, submit a list of costs and get reimbursed for the amount of the improvements or upgrades. Others may allow energy-efficient upgrades or improvements as part of a construction loan or other FHA mortgage loan product. One of the home improvement programs is known as Title I, a program that allows "light" or "moderate" property rehab.

January 17, 2011

FHA Loans and Predatory Lending–Ask an Agent

By Bruce Reichstein

When a first time home buyer wants to apply for an FHA home loan, they have a lot of learning to do about the whole process. The marketplace is full of reputable lenders, but as with any industry there are some individuals and even whole companies with business practices designed to take advantage of the lack of knowledge a newcomer might have. That's one reason the FHA offers a collection of resources for house hunters which includes plenty of advice on how to avoid predatory lending.

January 14, 2011

FHA Appraisal Facts

By Bruce Reichstein

The appraisal process is one of the most important aspects of the FHA loan process. Once the buyer has applied for an FHA guaranteed loan and has established that he or she is a good credit risk, the next phase of the process--finding a suitable home and making an offer--is directly affected by the appraisal system. The rules say an FHA-approved appraiser must view the property to establish the fair market value of the home. But there are a number of issues that the buyer should know about--things that affect the process that have nothing to do with the appraisal itself.

January 14, 2011

FHA Condo Loans

By Joe Wallace

FHA loans come in many different types. Not all house hunters want the same thing from their FHA mortgages, and FHA planners have anticipated this by creating many different options for those who want to borrow money with an FHA-insured loan. Those options are not limited to the terms and conditions of the FHA loan itself. There are many different types of properties a potential home owner can include on the search for a new home. The typical suburban home is just one option. Some buyers want the house, the yard, and the driveway. But what about those who live in the city? The FHA offers guaranteed loans for condominium units as well as traditional houses. FHA condo loans are a bit more involved than a typical home purchase, but | more...

January 13, 2011

FHA Streamline and No Cash-Out Refinancing: Basic Rules

By Joe Wallace

FHA Refinancing loans are more popular than ever thanks to the need many homeowners have to lower interest rates and monthly payments. Non-cash out refinancing includes both Streamline and non-Streamline FHA loans. Each one has its own restrictions and requirements. As with all FHA refinancing loans, the FHA does not require the borrower to pay the current month's mortgage payment prior to closing the loan. The FHA adds, "nor will be the principal balance of the existing loan be reduced by the amount of that unpaid principal."