Articles Published in: February 2015

February 28, 2015

FHA Loans and Co-Signers: A Reader Question

A reader asks, “My husband and I are trying to assume this fha loan. My debt to income ratio is too high. My mother in law will gladly co sign for us.” “My husband will not be on the loan, just me. Is it possible for my mother in law to co sign with just me on the loan? I’ve called (LENDER NAME DELETED) (whom own the loan) I have gotten two different answers. One lady said yes and now the other today is saying no. I’m waiting on (LENDER NAME DELETED) to call back. I thought as long as it was blood, marriage, or law related they could “ Co-signers and non-occupying co-borrowers are permitted on FHA loans. Depending on the circumstances a non-occupying co-borrower or co-signer situation may | more...

February 27, 2015

FHA Loan Questions: Will The Government Grant Me A Mortgage?

By Joe Wallace

A reader asks, “My question is about getting a mortgage. I have paid off my Chapter 13 BK just recently. As part of that I did short sales on 3 properties back in 2010 & 2011. My credit score is at 690 at this point and we are in good financial shape.” “We have $90,000 in our savings account, $380,000 in liquid assets like 401K, owned property, etc. Our monthly income is over $6000, and my wife makes over $66,000 yearly. Will the government or anyone grant us a mortgage?” In general terms, this reader’s situation sounds like he or she would not have difficulty finding a lender willing to at least consider the circumstances and review FHA home loan options. Getting a new FHA mortgage loan after a serious | more...

February 27, 2015

FHA Loan Debt To Income Ratios

By Joe Wallace

A reader asks, “Hi. My wife and I are planning to buy a house. My wife has a stable job for six years as registered nurse and I is currently a homemaker. Both of us has credit score of 720+ and we never missed a single payment in our credit cards and personal loans. What is our chance to be approved if our debt to income ratio is 49%? Can we qualify for a “no-conforming loan”? (Loan amount is $225,000, please note that mortgage interest, principal, taxes, insurance, HOA fee are already included in the DTI.” According to the FHA official site, many FHA loans are underwritten via an automated system. Here’s a quote from an FHA mortgagee letter from 2013 which announced changes to when and how a lender | more...

February 26, 2015

FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I am working with a home that was built in 1946. The crawl space clearance under the home is suppose to be by FHA standards 18 inches. This home only has 12 to 15 inches. It is not possible to get the dirt out from under this house to meet the requirement. Is there a chance they would waiver this requirement and if so who would I need to contact?” A HUD publication for single family home appraisers mentions the following in relation to the reader’s question: “A minimum distance of 18 inches from the ground to bottom of the joists is highly recommended but not mandated.” The appraiser will enter the crawl space (at a minimum entry of the head and shoulders) to observe conditions except | more...

February 26, 2015

FHA Loan Rules For FICO Scores: A Reader Question

By Joe Wallace

A reader asks, “I have an existing FHA insured house in Dallas TX. Two years ago i moved to GA for Job an rented sonce. I am moving again to Houston TX And looking forward to buy a house. I am a professional Engineer and make a Decent salary. But unfortunately have 570 credit score. My wife has a score of 650 but she has no job. Please advise what is the best option to get approved” Let’s see what the FHA loan rulebook says about this situation. According to HUD 4155.1 Chapter Four Section A, all co-borrowers, co-signers and other parties named on the loan would have both income and credit histories examined by the lender: “When determining the creditworthiness of borrowers, coborrowers, or cosigners, the underwriter considers their | more...

February 26, 2015

FHA Mortgage Rate News: Improvements As Rates Recover

By Joe Wallace

FHA mortgage loan rates had been pushed earlier out of a comfort zone that, best execution, had them at or near 3.25% depending on the lender. After February 14, it seems that mortgage rates in general had entered a time of upward pressure, and FHA loans moved out of their long-held comfort zone and into range of best execution rates between 3.25% and 3.5%. In the last couple of days, mortgage rates have taken a stronger move for the better, with 30-year fixed rate mortgages creeping back from the best execution cliff of 4.0%–rates didn’t actually climb quite that high for 30-year conventional fixed loans, but they approached 3.875% bests execution, which is as close to the 4.0% zone as we’ve seen in some time. But with mortgage rates in | more...

February 25, 2015

FHA Loan Rules: Income Limits, Loan Limits

By Joe Wallace

A reader asks, “Can a 68 year old retired person qualify for an fha loan and what is the dollar limit?” FHA loan rules do not specify an age limit or an income limit. FHA home loans are for any qualified borrower who meets the FHA loan program minimum FICO score standards as well as (possibly higher) lender FICO score standards. There’s no minimum or maximum income requirement–instead, the borrower’s debt-to-income ratio is examined to see if she or he can afford the new loan. This means that a borrower who seems to have a low income but can afford both existing monthly payments and the proposed new FHA home loan may be eligible for loan approval as long as they otherwise qualify with FICO scores, good loan repayment history, | more...

February 25, 2015

FHA Loans For Mobile Home Lots? A Reader Question

By Joe Wallace

A reader asks, “I never tried to get a loan for my mobile home, I’m currently $250 away from owning it. I went into a land contract with the lady who owns it now, well she didn’t tell me that the people who own the land want all 3 trailers moved off their land by summer, no specific date. Now the I moved into this trailer 04/2014, I’ve dealt with nothing but repairs out of my pocket…I’m a low income, unable to work 30 year old mother, I own a vehicle straight out, and my credit score is 580, is there a type of loan to help me pay to move my trailer, and buy land?” Let’s see what the FHA official site, FHA.gov, has to say about this reader | more...

February 24, 2015

FHA/HUD Issues More Guidance On Equal Access Rules

By Joe Wallace

We’ve seen a number of headlines recently on the FHA and HUD’s position on Equal Access laws. Now there is additional guidance coming on the heels of what’s already been released. On Monday, February 23 2015 the FHA and HUD issued a new press release announcing further clarification of its Equal Access rules which prohibit discrimination based on sexual identity, gender identity and related factors. According to HUDNo.15-023, “The U.S. Department of Housing and Urban Development (HUD) issued guidance to better serve LGBT Americans seeking to obtain a home loan and transgender individuals seeking access to homeless shelters. These two sets of guidance will help clarify the Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Rule (Equal Access Rule), which was published in 2012. | more...

February 23, 2015

What Is The FHA 203b Loan? A Reader Question

By Joe Wallace

A reader asks, “We are looking to purchase a HUD house that needs a lot of work– sewer system, plumbing, ceilings repaired. The electrical seems to be ok. Would an FHA 203b loan be available in addition to the traditional FHA loan? If the 203b is available, how does it work in terms of repayment?” The FHA/HUD official site says this about the FHA 203b loan: “What is the purpose of this program? To provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. What are the eligibility requirements? The borrower must meet standard FHA credit qualifications. The borrower is eligible | more...