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Articles Published in: February 2012

February 7, 2012

Can Repair Costs Be Added to the FHA Loan Amount?

By Joe Wallace

The FHA has strict rules about how a loan may be calculated. There’s the minimum cash investment required of the borrower, there are FHA loan limits, and there are rules covering what kinds of incentives a seller may provide in the form of interest rate buydowns and other financial contributions. Did you know that in some cases, the cost of home repairs on a sale property can be included in the sale price of the home for FHA loan purposes? According to Chapter Two of HUD4155.1, “Repairs and improvements may be added to the sales price before calculating the mortgage amount when…the repairs and improvements are required by the appraiser as essential for property eligibility”. These costs must be paid by the borrower, and

 

February 3, 2012

Reader Question: Can I Get an FHA Debt Consolidation Loan?

By Joe Wallace

A reader asks, “Is it possible to get an FHA loan and consolidate my house and credit card?” According to FHA loan rules, new purchase FHA loan amounts are limited to the statutory loan limit for the area, or “a percentage of the lesser of the appraised value, or sales price.” This would preclude getting cash back on the deal unless the borrower was owed a refund of some kind–FHA loans also require at least a 3.5% minimum down payment. The borrower must provide funds to close the deal. But FHA refinancing loans do feature a cash-out refinancing loan option. FHA rules do technically permit FHA cash-out refinancing for debt consolidation, but advises lenders, “Cash out refinancing for debt consolidation represents considerable risk, especially if the borrowers have not had | more...

 

February 2, 2012

FHA Loan Rules: Minimum Cash Investment

By Joe Wallace

Some FHA loan terms and jargon can be confusing for the first-time borrower. For example, some readers want to know what the FHA means by “minimum cash investment”. This phrase is basically another way of stating the term, “down payment” and refers to how much money down the borrower will pay. According to FHA loan rules as stated in HUD 4155.1 Chapter Two; “The maximum mortgage amount that FHA will insure on a purchase is calculated by multiplying the appropriate loan-to-value (LTV) factor by the lesser of the property

 

February 1, 2012

FHA Announces New Fair Housing Rules

By Joe Wallace

Nearly 30 percent of same-sex couples were treated differently when trying to buy or rent a home. That figure was published in a 2007 report by Michigan’s Fair Housing Centers. FHA and HUD have announced new regulations designed to end that sort of discrimination and much more. According to HUDNo.12-014, new regulations have been implemented to “ensure that HUD’s core housing programs are open to all eligible persons, regardless of sexual orientation or gender identity” according to the press release.