Articles Published in: July 2013

July 3, 2013

FHA Loan Reader Questions: FHA Rules on “Flipping”

A reader asks, “Hello, can you help us with a couple of questions please. What does the FHA consider as a “Flip-it” property? How many days does this involve from an original sale of a property?” “Flipping” is defined by the FHA as the sale of a home purchased with an FHA loan within 90 days of the original sale. Under normal circumstances the FHA has anti-flipping rules in place that forbid this practice with homes purchased with an FHA-insured mortgage. But the FHA issued a waiver to these rules back in January 2010. It has since been extended more than once and the current waiver of FHA anti-flipping rules doesn’t expire until 2014. According to a November 2012 edition of The Federal Register, “FHA is extending the availability of | more...

July 2, 2013

FHA Loans and the Cash Needed At Closing Time

By Joe Wallace

When it’s time for you to close your FHA home loan, you’ll be required to pay cash up front for certain items not to be included in the loan amount. These items include Up Front Mortgage Insurance Premiums or UFMIP, and the down payment. But there’s also an issue related to any “per diem interest” that might occur if the loan did not close on the original date agreed upon. When it comes to that per diem interest, borrowers should know the FHA loan rules (spelled out in HUD 4155.1) governing the money paid at closing time. Chapter Five of HUD 4155.1 states: “The lender must use a minimum of 15 days of per diem interest when estimating prepaid items on the Good Faith Estimate (GFE). To reduce the burden | more...

July 1, 2013

FHA Loan Reader Questions: FHA Loan Rates for First Time Home Buyers

By Joe Wallace

A reader asks, “What is the current interest rate for a first time home buyer and what is the income level to qualify?” The short answer to the first part of this reader question is that there is no specific interest rate set for “first time home buyers” when it comes to FHA home loans. The interest rate on an FHA mortgage is negotiated between the borrower and the lender. While some institutions may have a first-time home buyer program, the FHA does not set the rates on FHA loans nor does it regulate them beyond general requirements to be typical for the housing market the loan is offered in. FHA loan interest rates can change depending on the nature of the markets that affect mortgage rates. Rates can change | more...