Articles Published in: March 2014

March 5, 2014

FHA Loan Reader Questions: Can I Get Cash Back On My FHA Home Loan?

A reader asks, “When you getting a FHA loan can you have some money in the bank for the hard days to come in case something happens in the future unexpectedly?” It seems as though the reader is asking if the borrower can apply for an FHA home loan in excess of the amount required for purchase and put that money in the bank for later use. FHA loan rules are clear for new purchase home loans–there is no cash back to the borrower permitted. FHA home loans for new purchases require a minimum cash investment of 3.5%, so the down payment issue would further complicate the issue if a “no cash out” policy weren’t in place. Borrowers are not only required to make a down payment for FHA home | more...

March 4, 2014

FHA Energy Efficient Mortgages

By Joe Wallace

There is an option for FHA new purchase home loans and refinancing loans called the Energy Efficient Mortgage (EEM). According to the FHA loan rules found in HUD 4155.1, “Under the EEM Program, a borrower can finance 100% of the cost of eligible energy efficient improvements into the mortgage, subject to certain dollar limitations, without an appraisal of the energy efficient improvements. For the EEM Program, the mortgage amount includes the cost of the energy efficient improvements, in addition to the usual mortgage amount normally permitted FHA maximum loan limit for the area may be exceeded by the cost of the energy efficient improvements energy efficient improvements must be cost effective in order to be included into the mortgage, and amount of the cost effective energy package is added to | more...

March 3, 2014

FHA Loan Waiting Periods Post-Bankruptcy: A Reader Question

By Joe Wallace

A reader asks, “In 2007 I applied for bankruptcy and got dismissed in 2008. The creditors didn’t accept my plan. In 2008 house got sold. I need to know the waiting period before applying for an FHA loan.” There are two types of bankruptcy mentioned by name in the FHA loan rules found in HUD 4155.1. One is Chapter 7, the other is Chapter 13. Since the reader didn’t mention which type of bankruptcy, we’ll quote both guidelines. For Chapter 7, HUD 4155.1 Chapter Four states: “A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA-insured mortgage if at least two years have elapsed since the date of the discharge of the bankruptcy. During this time, the borrower must have: –re-established good credit, or –chosen not | more...