Articles Published in: 2011

September 6, 2011

How To Buy a HUD Home Part Two

In our last blog post we discussed HUD homes and who can buy them. A HUD home is a one-to-four unit residential property which was originally purchased with an FHA mortgage. The loan went into default and foreclosure, and became the property of the Department of Housing and Urban Development. To cut its’ losses, HUD offers these homes for sale at a discount. According to the FHA official site, “HUD Homes are sold ‘as-is,’ without warranty. That means that HUD will not pay to correct any problems. But even if a HUD Home needs fixing up – and not all of them do – it can be a real bargain…” FHA adds, “HUD’s asking price on the home will reflect the fact that the buyer will have to invest money | more...

September 6, 2011

How To Buy A HUD Home

By Joe Wallace

A HUD home, also known as a HUD REO property, is described by the FHA as “a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.” HUD homes are good deals because they are offered at a discount and are sold as-is. That means there is no insurance on the property and borrowers are strongly encouraged to get a home inspection prior to committing to the sale. In some cases a HUD home may not require repairs, but in others these homes make great fixer-upper projects. Best of all, according to the FHA official site, “Anyone can purchase a HUD Home as long | more...

September 5, 2011

HUD Announces $10 Million Dollar Initiative To Fight Mortgage Scams

By Joe Wallace

In recent months there have been many headlines about con artists targeting FHA and conventional borrowers in trouble on their home loans. A recent press release from the Department of Housing and Urban Development announced a new program to fight scammers. HUD has pledged more than $10 million in housing counseling grants for HUD-approved agencies. “The funding announced today is specifically earmarked to provide counseling assistance relating to mortgage modification, avoiding potential mortgage scams, and assisting victims of scams,” according to Department of Housing and Urban Development Secretary Shaun Donovan. “It is crucial that we support these agencies in helping struggling families do whatever is possible to avoid foreclosure without being victimized by so called mortgage ‘rescue’ companies.” The grand money will be awarded to 139 local housing counseling agencies | more...

September 2, 2011

FHA Loans And Minimum Employment History

By Joe Wallace

After getting a reader question about minimum employment history for FHA home loans, it seemed like a good idea to revisit the topic. FHA requirements require the loan applicant to provide least a two-year work history for the lender to review. But that two-year requirement is not used to set a minimum standard for the length of employment. The FHA official site says,

September 1, 2011

FHA Updates Rules for HECM Loan Counseling

By Joe Wallace

FHA Home Equity Conversion Mortgages, also known as HECM loans, are for qualified borrowers 62 or older who want to apply for a loan on their home using the equity in the home to secure the mortgage. This type of loan features cash out to the borrower and is not paid back until the borrower dies or sells the property. FHA HECM loans are unique because they offer money to the borrower as a monthly installment, a line of credit or other arrangements as permitted by FHA rules. The FHA requires applicants to get HECM-specific loan counseling before they can commit to the mortgage due to the terms and conditions of the mortgage loan. Some of those terms and conditions require the borrower to meet all loan obligations (including staying | more...

September 1, 2011

FHA Announces Help for New York and North Carolina Storm Victims

By Joe Wallace

With Hurricane Irene now a memory, the job of cleaning up and recovering still challenges many communities. President Obama has declared parts of New York and North Carolina as federal disaster areas, and the FHA has announced help for those in those areas. We’ve run quite a number of these announcements in 2011, and regular readers likely notice a pattern; FHA assistance for federal disaster areas includes FHA loan foreclosure moratoriums, forbearance and other assistance, it also includes FHA loan help in the form of the FHA 203(k) rehab loan. The FHA 203(k) is one of the most important types of help FHA/HUD offers to those in the disaster areas because it offers a long-term solution in addition to assistance with short-term issues. Storm victims need temporary shelter, food, clothing | more...

August 31, 2011

FHA Assistance For Iowa Storm Victims

By Joe Wallace

Hurricane Irene and its aftermath have dominated headlines in the last part of August 2011, and while recovery efforts continue other communities are also getting assistance for non-hurricane related issues. The most recent press release from the FHA and Department of Housing and Urban Development announced FHA help for Hurricane Irene victims in Puerto Rico, but in Iowa, help is also on the way for those who experienced storm and flood damage from weather problems in July. According to HUD press release 11-176, “HUD will speed federal disaster assistance to the State of Iowa and provide support to homeowners and low-income renters forced from their homes following severe storms, straight-line winds, and flooding during the period of July 9-14, 2011.” On August 30, 2011, President Obama declared federal disaster areas | more...

August 30, 2011

Shopping Around for an FHA Home Loan

By Joe Wallace

If you are a first-time house hunter interested in buying a home with an FHA-insured mortgage, there are several things you should know about the FHA home loan process. It’s easy to assume that because a lender is FHA-approved, they offer the same services, rates and other features as any lender participating in the FHA loan program. But is that a safe assumption to make? Borrowers should know before applying for an FHA home loan that the FHA loan program is voluntary–the government does not require lenders to participate. That means a lender is free to withdraw from the program and stop offering new FHA home loans. Banks that do participate must comply with FHA regulations, the Fair Housing Act, and other rules. So while borrowers can safely expect an | more...

August 30, 2011

Emergency Homeowners’ Loan Program Extended

By Joe Wallace

Qualified FHA borrowers at risk of foreclosure on FHA mortgages could find help from the Department of Housing and Urban Development. According to a press release from FHA/HUD, FHA borrowers in 27 states and Puerto Rico have another chance to apply for funding from the Emergency Homehowners’ Loan Program. In a release dated August 29, 2011, it was announced, “The U.S. Department of Housing and Urban Development and NeighborWorks America today reopened the application process for the Emergency Homeowners

August 29, 2011

FHA Loan Resources For Those Affected By Recent Hurricanes and Other Natural Disasters

By Joe Wallace

2011 has brought one of the worst summers on record for homeowners–hurricanes, floods, and other disasters have given FHA borrowers plenty to worry about when it comes to their property. The FHA has a lot of resources that can help. Borrowers who need assistance in the wake of disasters can find a wealth of information, application forms and counseling online. In federally-declared disaster areas such as the 2011 sites in Kentucky, New Hampshire, Wyoming and many others, the FHA has issued foreclosure moratoriums and other actions designed to help borrowers in need of mortgage relief. Call 1-888-297-8685 to find out what options may be available to you in your location. The FHA offers rehab loans for those affected by disasters. The FHA 203(k) rehabilitation loan is available from FHA-approved lenders | more...