Articles Published in: June 2011

June 30, 2011

FHA Refinancing And Ownership Issues

Real estate can be a confusing business for those not used to dealing with the daily ins and outs of the industry. But a first-time FHA borrower isn’t the only one likely to have some initial trouble navigating the rules and regulations covering real estate transactions, FHA loan requirements and other issues. A first-time applicant for refinancing also has plenty of questions about the process. One of the most frequently asked questions about refinancing involves an important ownership issue. Suppose a borrower purchased a home with an FHA insured loan, and either had the loan assumed, added someone to the title, or otherwise brought another person into property ownership without having them named on the original FHA loan? Can someone apply for an FHA refinancing loan if they own the | more...

June 29, 2011

FHA Loans And Appraisal Repair Requirements

By Joe Wallace

When a home is appraised by an FHA appraiser, there may be

June 29, 2011

FHA Condo Loan Rules

By Joe Wallace

In previous blog posts, we’ve discussed the different types of FHA loans available and the various types of properties that can be purchased with an FHA insured home loan. Those properties include typical suburban houses, manufactured homes, multi-family units and condominiums. FHA condominium loans are more complex than other loans because the FHA has requirements when it comes to these loans. Borrowers can’t purchase just any condominium unit–it has to be on the FHA’s list of approved condominium projects in order to be considered for an FHA mortgage. That’s one reason why the FHA publishes a searchable list of approved condo projects on its website at https://entp.hud.gov/idapp/html/condlook.cfm. What does it take for a condominium project to be approved by the FHA so a borrower can apply for a loan to | more...

June 28, 2011

The Different Types of FHA Home Loans

By Joe Wallace

There are many different types of FHA insured home loans to choose from. Buying a home or refinancing one isn’t a one-size-fits-all process, and FHA guaranteed loans come in a variety of types to accommodate the various needs different house hunters or current home owners bring to the lender. The two most basic types of FHA home loans are new purchase loans and refinancing loans. New purchase FHA loans, by name alone, may seem to indicate that these loans are intended only for new construction houses, but new purchase simply refers to the type of transaction (a “new to you” home purchase), not the age or condition of the property itself. FHA refinancing is, as the name implies, a home loan intended to pay off an old home loan and | more...

June 27, 2011

FHA Loan Limits For Some Counties Could Decrease in October, 2011

By Joe Wallace

The FHA has made an important announcement that could affect the loan limit on new FHA mortgages in some areas on or after October 1, 2011. According to FHA.gov, “Barring Congressional action, Federal Housing Administration (FHA) loan limits will revert back to loan limits determined under the Housing and Economic Recovery Act (HERA) for loans insured by FHA on or after October 1, 2011. As a result, FHA loan limits would likely decline in 669 of the 3,334 counties or county equivalents that are eligible for FHA insurance.” During the housing crisis of 2008, the FHA temporarily increased FHA loan limits. According to the FHA announcement, “The Economic Stimulus Act (ESA) enacted in February 2008 stipulated that FHA loan limits be set temporarily at 125 percent of the median house | more...

June 27, 2011

FHA Loans, Credit, and Bankruptcy

By Joe Wallace

We’ve had a lot of recent questions about how bankruptcy and related issues can affect a borrower’s chances to be approved for an FHA home loan. The good news is that filing for bankruptcy does not automatically disqualify a borrower from getting an FHA insured loan. Just like any other loan applicant, the FHA and lender examine several factors when deciding to approve an FHA loan. A borrower must be able to show stable income and a record of dependable payments regardless of a bankruptcy filing, so a borrower’s habits and track record in the wake of a Chapter 7 or Chapter 13 bankruptcy proceeding is just as important as a “typical” FHA loan applicant’s. How does a bankruptcy affect a borrower’s eligibility for an FHA mortgage? The short answer | more...

June 23, 2011

FHA Loan Down Payments

By Joe Wallace

The down payment issue is one that brings many would-be conventional borrowers to an FHA lender. After seeing what some conventional loans require for a down payment, the FHA minimum 3.5% is a definite advantage to a first-time home buyer. But when a borrower is doing research on FHA loans versus conventional equivalents, sometimes the details can be a bit confusing. One area some have trouble understanding (at first) is the difference between the required 3.5% FHA loan down payment for a typical home purchase and the $100 down payment required on some HUD home purchases. A HUD home purchase is not the same as taking out an FHA mortgage in the usual way. HUD homes are properties owned by the Department of Housing and Urban Development–homes that have been | more...

June 23, 2011

What is the FHA 203(b) Loan Program?

By Joe Wallace

If you’re new to FHA home loans, it’s easy to get confused by the different types of FHA insured mortgages available. There are FHA 203(b) loans, the FHA 203(k) and a host of others. Some borrowers are ready, after seeing the alphabet soup of different programs a borrower could apply for, to throw up their hands and just ask for “the FHA loan everybody applies for when they want a new home.” That loan is known as the FHA 203(b), the single-family mortgage insurance program most commonly used all over America. According to the FHA official site, the FHA 203(b) “may be used to purchase or refinance a new or existing one-to-four family home in both urban and rural areas including manufactured homes on permanent foundations. Typically, lenders offer terms | more...

June 22, 2011

FHA Announces Help For Montana, Vermont Storm Victims

By Joe Wallace

2011 has been a bad year for storms and floods. In the past several months, Illinois, Minnesota, Missouri and many other states have been hit with tornadoes and flooding. Some areas get minor damage, while others are declared Presidential disaster areas. Recently the President also had to make a disaster declaration for parts of Montana and Vermont as storms and flooding there forced people from their homes. HUD Secretary Shaun Donovan has also made some announcements of his own, stating that HUD will rush federal disaster assistance to these areas to support home owners and low-income renters there. FHA borrowers affected by these storms should know help is on the way. According to recent press releases from HUD, Secretary Donovan says,

June 22, 2011

Why Choose an FHA Home Loan?

By Joe Wallace

According to the official site at HUD.gov, the FHA loan program has been running since 1934. Designed to help Americans purchase affordable home loans, the FHA insured mortgage loan program features low down payment requirements, low closing costs and more forgiving credit requirements than conventional loans. Many people turn to the FHA loan program because they may not be able to qualify for loans with good interest rates or terms as favorable as those offered by the FHA. Some go directly to the FHA because they don’t feel their credit is good enough to qualify for a conventional mortgage. In many cases, an FHA loan is the best way to realize the dream of home ownership. But how does the FHA make that happen? The FHA mortgage low down payment | more...