Articles Published in: November 2015

Can I buy a manufactured home with an FHA loan?

November 6, 2015

FHA Loan Rules, Non-Borrowing Spouses, and Judgments

A reader got in touch recently to ask if a financial judgment against a non-borrowing spouse could be a liability when applying for an FHA mortgage loan. The answer really depends on whether the borrower resides in a community property state, and whether community property laws in that state might have something to say about how a legally married couple applies for a major financial obligation such as a home loan. FHA loan rules have specific guidance for the lender in community property states when it comes to issues like debts, judgments or other financial issues affecting the non-borrowing spouse. These rules are found in HUD 4000.1 and state: “If the Borrower resides in a community property state or the Property being insured is located in a community property state, | more...

November 5, 2015

More On FHA EEM Stretch Ratios And Home Energy Scores

By Joe Wallace

Recently we reported on the FHA’s coming rule modification for the Energy Efficient Mortgage program. For loans in 2016 with FHA case numbers assigned on or after January 25, 2016, homes with qualifying energy ratios could be eligible for increased “stretch ratios” as described below (reprinted from the FHA official site): “FHAs existing EEH policy allows stretch ratios for homes that are built or retrofitted to the 2000 International Energy Conservation Code (IECC). For standard FHA loans, debt-to-income (DTI) ratios are limited to 31 percent (front-end) and 43 percent (back-end). Under FHA policy for the EEH mortgage, these DTI ratios can be increased to 33 percent and 45 percent respectively. To increase opportunities for homeowners to achieve and benefit from an energy efficient home, FHA is adding a new threshold | more...

November 4, 2015

HUD 4000.1 On “Flipping”

By Joe Wallace

Ever since the publication of the new FHA single family home loan rule book, HUD 4000.1, have been examining loan rules as published in the new guide. One important area of the FHA single family loan rulebook involves the guidelines for buying property with an FHA mortgage that is being sold after having been recently acquired by the seller. HUD 4000.1 states that, in order for a home to be eligible for an FHA mortgage, a certain amount of time must elapse between the sale of the home to the new owner and the subsequent sale of the property to another buyer–this time requirement is known as the HUD “anti-flipping” rule. It states: “Property Flipping is indicative of a practice whereby recently acquired Property is resold for a considerable profit | more...

November 4, 2015

Mortgage Rate Trends: Moving Higher For A Second Day In A Row

By Joe Wallace

Last week, mortgage rates moved higher on Thursday, then leveled out and didn’t lose any more ground on Friday. But Monday and Tuesday we’ve seen the rates move to their highest numbers in four weeks or so, pushing best execution rates for 30-year fixed rate conventional mortgages farther away from that 3.75% zone we saw last month. 30-year fixed rate conventional mortgages have moved recently into a range between 3.875% and 4.0%; if upward pressure continues we could see 4.0% (best execution) become far more prevalent. At the time of this writing, FHA mortgage rates are still at their 3.5% best execution comfort zone but this time around that might not last as long as the previous FHA mortgage loan rate comfort zone–we’re likely to see rates break out into | more...

November 3, 2015

FHA EEM “Stretch Ratios” For Existing Construction Loans

By Joe Wallace

In our last blog post we discussed a new partnership between the FHA/HUD and the Department of Energy which is allowing eligible borrowers to get access to increased “stretch ratios’ under FHA energy efficient mortgages in 2016. According to an FHA press release, “FHAs existing EEH policy allows stretch ratios for homes that are built or retrofitted to the 2000 International Energy Conservation Code (IECC). For standard FHA loans, debt-to-income (DTI) ratios are limited to 31 percent (front-end) and 43 percent (back-end).” How do these ratios “stretch”? According to the press release, “Under FHA policy for the EEH mortgage, these DTI ratios can be increased to 33 percent and 45 percentrespectively. To increase opportunities for homeowners to achieve and benefit from an energy efficient home, FHA is adding a new | more...

November 3, 2015

FHA Energy Efficient Mortgages: New Standards For 2016

By Joe Wallace

In 2016, FHA borrowers looking to add Energy Efficient Mortgage loans to their transaction will have some new standards to use related to the energy efficient improvements they wish to add. Thanks to a new partnership between the FHA, HUD, and the Department of Energy, certain ratios will be increased in 2016, according to a press release found at the FHA official site. “FHAs existing EEH policy allows stretch ratios for homes that are built or retrofitted to the 2000 International Energy Conservation Code (IECC). For standard FHA loans, debt-to-income (DTI) ratios are limited to 31 percent (front-end) and 43 percent (back-end).” “Under FHA policy for the EEH mortgage, these DTI ratios can be increased to 33 percent and 45 percent respectively. To increase opportunities for homeowners to achieve and | more...

November 2, 2015

FHA Mortgage Loans: Home Inspections And Appraisals

By Joe Wallace

We get many reader questions about the FHA appraisal process that include the phrase “FHA inspection”. But there is no such thing as an FHA “inspection”, there is only an appraisal designed to make sure the property to be purchased with an FHA loan meets minimum standards and establish the fair market value of that property. It’s a mistake to assume that a home that “passes” an FHA appraisal is free from problems or defects. The FHA appraisal is never intended to be a stamp of approval on the home or a guarantee of any kind. That is why the FHA and HUD urge borrowers to pay for the optional but extremely important home inspection as well as the appraisal. The home inspection is something the borrower must schedule and | more...

November 2, 2015

Mortgage Rate Trends: Moving Higher

By Joe Wallace

Thursday and Friday say mortgage rate moving higher, pushing close to four-week highs and some industry professionals and market watchers are sounding off about the higher rates potentially shifting into an upward momentum phase. Whether or not rates actually do that is dependent on a variety of factors that haven’t actually happened yet, so it’s unclear where rates could move during the week. Friday, 30-year fixed rate conventional mortgages moved into a best execution range between 3.875% and 4.0% depending on the lender. Some extremely well qualified borrowers who found lenders willing to offer lower rates may still have had access to something approaching 3.75% on Friday, but if upward pressure continues, it’s likely that best execution offering will disappear for the moment. FHA mortgage rates are still holding in | more...