Articles Published in: February 2015

February 4, 2015

FHA Loan Rules On Giving Personal Property To The Buyer

Sometimes when a borrower purchases a home, the seller will offer to to throw in some types of personal property as part of the deal. Knowing that the FHA has strict rules on something known as “inducements to purchase”, does the FHA allow or deny sellers to offer personal property to sweeten the real estate deal? An inducement to purchase is when the seller offers to pay certain expenses on behalf of the borrower that exceed six percent of the sales price or appraised value (whichever one is lower). But offering property isn’t the same as paying in the eyes of some–does that mean the property is exempt from inducements to purchase regulations? The answer to this question can be found in HUD 4155.1, Chapter Two, Section A. That part | more...

February 4, 2015

FHA Loan Reader Questions: Help With an Existing FHA Mortgage

By Joe Wallace

We get many questions about FHA home loans. Some of them come in the form of detailed queries about specifics of a certain FHA loan program, others come as more general questions about the nature or scope of FHA home loans. Here’s one of the more generalized questions that came in recently. A reader asks: “What about help with a current FHA loan? Remodification?” It’s not clear what the reader is getting at with this question, but assuming the reader wants assistance with an existing FHA loan in order to get into a lower monthly payment, the good news is that there is definitely assistance available in the form of FHA Streamline Refinancing. FHA Streamline refinance loans are for borrowers with existing FHA mortgages who want a lower interest rate, | more...

February 3, 2015

FHA Loan Rules For Non-Occupying Co-Borrowers

By Joe Wallace

The FHA single family home loan program has an occupancy requirement which states that the borrower must intend to live in the home to be purchased with the FHA loan as his or her main residence. But there are also provisions for FHA loans that feature more than one borrower–a “non-occupying co-borrower” who signs the mortgage loan paperwork but does not move in along with the primary borrower and occupant of the home. FHA loan rules say that there is a limit on loans like these in certain cases–in general the borrower will be required to make a 25% down payment on the property as the FHA loan maximum mortgage amount is limited to 75% of the loan-to-value amount. According to HUD 4155.1, FHA loans say specifically: “When there are | more...

February 3, 2015

Preparing For Your FHA Cash Out Refinance Loan

By Joe Wallace

If you are considering refinancing a home loan using the FHA Cash Out Refinance Loan option, there are a few things to keep in mind about your FHA refinance loan options when you’re planning, budgeting, and saving for the loan. The first thing to remember is that you can refinance an FHA or non-FHA home loan with a Cash Out Refinance loan. FHA loan rules permit this and you don’t have to use the same lender you applied for the original home loan with; shopping around for the most advantageous refinance loan interest rates and terms is always a good idea. That means if your current lender is not a participating FHA lender, you can shop around to find one that does participate in the FHA loan program and is | more...

February 2, 2015

HUD/FHA Alters HECM Foreclosure Options

By Joe Wallace

The FHA and HUD have issued a press release announcing new options to avoid foreclosure on HECM homes in cases where the “last surviving borrower” dies but a non-borrowing surviving spouse still occupies the home. According to HUDNo.15-010, the FHA has issued a new policy, “under its Home Equity Conversion Mortgage (HECM) Program giving FHA-approved lenders the option to delay calling HECMs with eligible ‘non-borrowing spouses’ due and payable.” According to the press release, a delay would postpone foreclosure, “normally triggered by the death of the last surviving borrower. FHA’s new guidance will allow reverse mortgage lenders to assign eligible HECMs to HUD upon the death of the last surviving borrowing spouse, thereby allowing eligible surviving spouses the opportunity to remain in the home despite their non-borrowing status.” Last year, | more...

February 2, 2015

A Reader Question: FHA Loan Rules Post-Chapter 13 Bankruptcy

By Joe Wallace

A reader asks, “Please help me understand the preceding statement. First it states the borrower must have at least one year of on time payments to the trustee in a chapter 13. Then it states the borrower must be 2 years post discharge of chapter 13. My wife and I filed chapter 13 in May of 2014, when can we ask the courts approval to enter into a new mortgage. Might we be eligable as of 5/2015, or as the statement suggests, 2 years post discharge?” This question is in reference to material in one of our blog posts, FHA Loans Following Chapter 13 Bankruptcy. It is true that the FHA requires borrowers to have at least a full year of on-time payments under the Chapter 13 arrangement, and the | more...