Articles Published in: 2012

July 17, 2012

FHA Loans For Site-Built Homes?

A reader asks, “I have learned a great deal from just this information listed on this website. However one question remains, are FHA loans eligible for site built homes? I see a listing for HUD homes, and refinancing, but are ground up homes eligible for FHA backed loans?” According to FHA loan rules, FHA mortgages are available from participating lenders for “proposed construction, under construction or existing construction less than one year old”. There are established FHA procedures and guidelines for these loans including:

July 16, 2012

FHA Loans and Military Service

By Joe Wallace

A reader asks, “Can you still use the FHA while being stationed overseas and still active duty?” This is a fairly complex issue and the answer is dependent on circumstances. If an active duty military borrower wishes to purchase a home with an FHA mortgage loan while still stationed overseas, there are several questions to be answered, including how the borrower intends to execute the FHA loan application. Eligible borrowers who are able to fill out the application themselves may be able to clear this initial hurdle, but those who rely on a power of attorney should know the FHA rules on loan applications in these situations: In general the FHA rules state, “The initial mortgage loan application may not be executed by using a power of attorney, except in | more...

July 13, 2012

HUD Charges Minnesota Condo Association and Management Company With Fair Housing Act Violations

By Joe Wallace

In spite of federal laws, conventional, VA, and FHA loan applicants sometimes experience discrimination when house hunting. While the most obvious types of discrimination involve bias against race, religion, sexual orientation, or national origin, there’s another type of discrimination that’s just as illegal and unfair–discrimination based on family status. According to a press release issued by the Department of Housing and Urban Development, a Minnesota condominium association and its management company, Gassen Company, Inc., have been charged by HUD with violating the Fair Housing Act, “by discriminating against families with children under the age of 18”. The press release says, “According to HUD

July 12, 2012

FHA Loans: Can My Loan Costs Be Considered Part of the Down Payment?

By Joe Wallace

FHA home loans require a minimum down payment. The amount of an individual borrower’s down payment varies for several reasons. One reason is that the borrower must pay a percentage of the overall loan amount. Rather than requiring X amount of dollars as a standardized down payment, the borrower pays this percentage based on how much financing he or she qualifies for. For “new purchase” FHA home loans, the FHA has set a maximum Loan-To-Value ratio of 96.5%. “Loan-To-Value” simply means the amount of the FHA guaranteed home loan compared to the value of the home. 96.5%, being the maximum FHA loan available for a new purchase, means the FHA requires a 3.5% down payment of the loan amount. From the FHA loan rules found in HUD 4155.1 Chapter Two: | more...

July 11, 2012

FHA Loan Reader Question: Appraisals and “Comparables”

By Joe Wallace

A reader asks, “I am interested in purchasing a log cabin home with 44 acres and I am being told by a lender that FHA requires the comparables must be within a 12 month sale time frame. As you know log cabin homes are not sold that often. Do the comparables have to be within a 12 month time frame like I am being told?” “Comparables” refers to a benchmark FHA appraisers use to help arrive at the fair market value of the appraised property. The appraiser compares the property to be purchased with an FHA home loan to similar homes in the same market to see what current market values might be for those properties. In Issue 30 of the official FHA Appraiser Roster Newsletter, comparables are discussed as | more...

July 10, 2012

FHA Loan Reader Question: Eligibility For Another FHA Mortgage

By Joe Wallace

A reader asks, “If my brother and I purchased a home with FHA loan, can I still qualify for a FHA loan if I purchase a home on my own. What would the down payment be?” FHA loan down payment rules state the borrower must put down a minimum of 3.5%. On the other part of this reader question, there’s additional information needed. Is the reader a primary borrower? A non-occupying co-borrower? FHA loan rules vary depending on a variety of factors. For example, a non-occupying co-borrower might be technically eligible to apply for another FHA home loan, but FHA occupancy requirements for single-family purchases wouldn’t permit the primary borrower to do the same. Why? FHA home loans require the borrower to certify he or she will occupy the home | more...

July 10, 2012

FHA Announces Disaster Assistance For Minnesota Storm Victims

By Joe Wallace

The FHA and HUD have announced disaster relief for victims of severe storms and flooding in parts of Minnesota. According to an FHA press release dated July 9, 2012, “Last week, President Obama issued a disaster declaration for Aitkin, Carlton, Cook, Crow Wing, Dakota, Goodhue, Kandiyohi, Lake, Meeker, Pine, Rice, Saint Louis, and Sibley Counties. The declaration also includes Fond du Lac, Grand Portage and Mille Lacs Indian Reservations. The President

July 9, 2012

FHA Loan Reader Question: Condo Approval

By Joe Wallace

A reader asks, “I own one of the eight units in a condominium building. Where can I find the procedures to qualify the building for FHA approval ? Several of the owners want to sell their units and having FHA financing available for the potential buyers would be a great help.” In 2009, FHA loan rules for condo approval were changed. According to FHA Mortgagee Letter 2009-19, the the Housing and Economic Recovery Act (HERA) of 2008 fave the FHA the ability to modify approval procedures for condo projects: “FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD

July 6, 2012

FHA Announces Disaster Relief For Tropical Storm Debbie Victims

By Joe Wallace

A press release found on the FHA official site announces federal disaster assistance for victims of Tropical Storm Debbie in the state of Florida. According to HUDNo.12-110, President Obama has issued disaster declarations in several counties including Baker, Bradford, Clay, Columbia, Franklin, Hernando, Highlands, Pasco, Pinellas, Suwannee, and Wakulla. The President

July 5, 2012

FHA 203(b) Home Loans: How Do They Work?

By Joe Wallace

If you’re a first time home buyer interested in getting an FHA loan, there are several options you can choose from when you’re ready to commit to buying a home. Home loan experts recommend preparing for any new home purchase at least a year in advance so you have time to save money for the costs of the loan you need to pay up front, examine your credit score, and reduce any unnecessary open lines of credit. Once you’re ready to start house hunting, you have options that include getting pre-qualified for an FHA loan amount, or finding a suitable home and applying for the loan once you’ve made your choice. FHA loans work because participating lenders offer mortgage loans to qualified borrowers. The FHA itself does not lend the | more...