Articles Published in: August 2014

August 6, 2014

FHA Loan Reader Questions: FICO Scores, Loan Amounts

A reader asks, “I have a FICO of 610/608/586. Is there a chance of getting approved for a loan? How much if so? And where would I begin?” FHA loan rules specify that borrowers with FICO scores above 500 are eligible to apply for an FHA mortgage loan. However, lender standards are often higher than FHA minimums so you would need to check with the individual lender to see whether such scores are acceptable. The FHA cannot force a lender to offer FHA mortgage loans or refinance loans to those who don’t meet the financial institutions minimum FICO score guidelines. Borrowers who ask “how much?” are asking a common question, but the answer depends on the sale price of the home and the appraised value of that property. FHA loans | more...

August 5, 2014

FHA Loan Minimum Property Requirements For Mobile Homes: A Reader Question

By Joe Wallace

A reader asks, “I am applying for refinance on my double wide home and have had an appraisal done and have made all upgrades they have requested. Now they are asking me to have an engineer to come out to inspect the footings that were put in and have a certified engineer sign off on them. I have looked at the requirements and do not see where this is required.” “Can you give me any advice on this? The footings (pillars) were put in according to the manufactures specifications and were inspected at the time of the installation of the double wide.” What FHA loan applicants need to know in situations like these is that FHA minimum property requirements are not necessarily the only rules that apply. The answer to | more...

August 4, 2014

FHA Loan Lender Standards: A Reader Question

By Joe Wallace

A reader asks, “I was discharged from Chapter 7 in 2010, and the sheriff sale on my home was June 27, 2012. The mortgage company is telling me that the only way to do a conventional loan after two years from the sheriff sale, is to put 15% down. Is this correct?” We can’t comment on conventional loans–that’s outside the scope of our writing here, which covers FHA loans. However, the question is still valid when applied to an FHA loan application–what’s the right answer? Unfortunately, there is no single answer because in cases like these, lender standards may apply. The FHA loan program has minimums including a minimum down payment requirement of 3.5%. But in cases like these lender standards may require the borrower to have a longer waiting | more...

What you should know about FHA 203(h) Loans For Disaster Victims

August 1, 2014

Types of FHA Home Loans

By Joe Wallace

There are a wide variety of options when it comes to the FHA loan program. Did you know you can buy or refinance a home using an FHA mortgage? You don’t have to have an existing FHA mortgage in order to refinance into an FHA mortgage, and for qualifying borrowers aged 62 or older the Home Equity Conversion Mortgage loan offered under the FHA loan program can also be an option. For new purchase FHA home loans, borrowers have the option under the FHA single-family loan program to purchase a suburban home, a townhome, condo, duplex or other home classified as real property (no houseboats or motor homes). FHA loans for new purchases require a minimum 3.5% down payment. This is non-negotiable, though borrowers are free to make a larger | more...

August 1, 2014

FHA Loan Income Requirements: A Reader Question

By Joe Wallace

A reader asks, “I am applying for an FHA loan, I left a permanent position of 3 years to do contract work which I have done for over a year now. I am currently on my 2nd assignment which still has another 6 months minimum left on it, with a possibility of an extension – I am a W-2 contractor (not 1099.) Would I be disqualified since I only have a one-year history as a contractor vs being a permanent employee?” Let’s examine what the FHA loan rules printed in HUD 4155.1 say about income and employment verification. To star with, let’s look at the FHA instructions to the lender for analyzing employment: “When analyzing the probability of continued employment, the lender must examine • the borrower’s past employment record | more...