Articles Published in: 2015

September 21, 2015

FHA Loan Appraisal Questions

There are many readers who ask us appraisal-related questions in the comments section here; some are general questions, while others get quite specific. Here’s an example of one of the more specific FHA appraisal questions we’ve been asked recently: “If a bedroom has two windows with keyed burglar bars do both have to be replaced with quick release burglar bars?”. The FHA has recently issued HUD 4000.1, which is a comprehensive policy guidebook for FHA single family loans including references to FHA appraisal standards. Those references do include a mention of bars on windows: “The Appraiser must report when the Property has security bars on bedroom windows or doors.” Note that this reference says nothing about replacement or removal, however state or local building code might. So what all borrowers | more...

September 21, 2015

FHA Mortgage Rate Trends: Lower On Friday

By Joe Wallace

FHA mortgage rates continued a move lower on Friday–a move that started on Thursday following the Fed announcement stating that there would not be a hike in interest rates for now. The Friday momentum–if it carries into Monday–could result in rates dropping to a best execution 3.75% best execution for 30-year fixed rate conventional mortgages. That would also likely mean a drop in the FHA best execution rates, too. Those rates have held out in their best execution comfort zone of 3.75% up to now, so we’ll be watching what rates do and where they stand at the end of the business day. Industry professionals last week were advising borrowers to consider locking in a mortgage loan interest rate prior to Thursday’s Fed announcement, but now the advice is taking | more...

September 19, 2015

All About HUD 4000.1, The New Single Family Policy Handbook

By Joe Wallace

In the weeks leading up to the launch of the new FHA Single Family Home Loan policy handbook, HUD 4000.1, we’ve discussed some of the contents of the handbook in detail, but some may wonder what exactly HUD 4000.1 is and how it affects them. HUD 4000.1 consolidates and updates FHA loan policy for single-family into a single reference. It supersedes many prior FHA loan mortgagee letters, which are issued occasionally by the FHA/HUD to announce, revise, or clarify FHA loan policy. According to the FHA official site, HUD 4000.1, “The Federal Housing Administrations (FHA) Single Family Housing Policy Handbook (SF Handbook; HUD Handbook 4000.1) is a consolidated, consistent, and comprehensive source of FHA Single Family Housing policy.” What does that mean? According to the FHA/HUD, the new handbook has | more...

September 18, 2015

HUD Announces 2015 Relief For Victims Of Hurricane Sandy

By Joe Wallace

You read that correctly–the Department of Housing and Urban Development has announced further relief for victims of Hurricane Sandy. It’s been quite some time since we ran any Sandy-related news, but a recent decision by HUD gives these home owners some much-needed assistance. Many FHA borrowers were affected by that hurricane, and according to a press release issued by the FHA/HUD official site, “The U.S. Department of Housing and Urban Development today decided that HUD will not force thousands of New York and New Jersey homeowners to repay federal disaster recovery funds following a decision by the Federal Emergency Management Agency (FEMA) to increase flood insurance claim payments to families it initially underpaid following Hurricane Sandy.” According to HUDNo.15-144, federal law gives the Department of Housing and Urban Development the | more...

September 18, 2015

Mortgage Rate Trends: Lower After Fed Announcement

By Joe Wallace

The much anticipated Fed announcement came and went, and when rates were not raised, mortgage loan interest rates made a good recovery from the previous sideways-to-upward movement they were making. While Fed policy discussed yesterday does not directly dictate the rates offered by mortgage lenders, there is a definite influence there, and investor reaction to Fed policy also plays a role in pressuring rates higher or lower. So yesterday’s “no rate hike for now” announcement came as a welcome move, and by the end of the day we saw best execution rates for 30-year fixed rate conventional mortgages back in a range between 3.875% and 4.0%. That puts those numbers back in territory we haven’t seen since last week, but as many sources report, we’re still watching mortgage loan rates | more...

September 17, 2015

FHA Loan Credit Requirements Versus Lender Credit Requirements

By Joe Wallace

We get many questions about the difference between FHA loan minimum FICO score and credit requirements and the lender requirements for same. Here’s one of the latest examples: “Seems like there is a lot of contradiction between what is on the FHA site and what the FHA Reps. are answering the consumers the questions. Why have FHA guidelines if the lenders dont have to follow them and can overrule them with their own? I have a credit score of 580 and a one time 30 day late mortgage payment in the past 12 months…” There were other details in the reader question, but the information above was the most pertinent. And the answer to the first part of the question is fairly simple. FHA loan FICO score requirements and other | more...

September 17, 2015

Mortgage Loan Interest Rate Trends: Holding Steady Ahead Of Big Fed Announcement

By Joe Wallace

Thursday is a very important day for mortgage rates, thanks to the much anticipated Fed announcement later today that could bring news of an interest rate hike…or not. That announcement, at the time of this writing, has not happened so we await the news from the Fed and will write a post about the announcement and its effect on the mortgage loan interest rate environment–look for that update on Friday morning. On Wednesday mortgage loan rates held steady, which was not the case on Tuesday as nervous investors made choices in the markets that directly affect mortgage loan rates that sent those rates higher. But for now, at the time of this writing, 30-year fixed rate conventional mortgage loan interest rates held steady (best execution) at or near 4.0%. FHA | more...

September 16, 2015

FHA Rehab Loans: The Rules For 203(k)

By Joe Wallace

In a recent blog post we discussed the basics of the FHA 203(k) Rehab loan. This is a type of FHA loan that allows borrowers to repair a property being purchased with an FHA mortgage or to repair an existing home that was purchased previously. According to the FHA official site, the home to be rehabbed with an FHA 203(k) must be at least one year old. “A portion of the loan proceeds is used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit | more...

September 16, 2015

Mortgage Rate Trends: Moving Higher Ahead Of Fed

By Joe Wallace

You may notice us posting more this week about FHA loan interest rate trends; that’s because this is a major week for mortgage loan rates since the Fed announcement due Thursday on a possible interest rate hike is a major news item. Yesterday we reported that it is very likely that rates might go into a holding pattern ahead of the Fed, but as anxiety builds, investor behavior is putting upward pressure on the markets that directly affect mortgage rates. On Tuesday rates moved higher, pushing many lenders aggressively offering sub-four percent rates on 30-year fixed rate conventional mortgages (best execution) back into the 4.0% zone. Some borrowers may have noticed the difference in closing costs rather than an actual rate move depending on the lender. FHA mortgage loan rates | more...

September 16, 2015

FHA Loan Questions: Can Only One Spouse Be Obligated On The FHA Loan?

By Joe Wallace

We get lots of questions about FHA loans where spouses may or may not wish to apply for the loan together. Here’s one such recent question where the couple only wants to have one spouse apply for the mortgage: “Can my wife be the only person on the mortgage? If so do you only use her income to qualify or can you use both incomes. I have a judgment on my credit, but I have more income then she does and that would give us more of a mortgage to work with.” Unfortunately the answer to this question depends greatly on whether or not the couple reside in a state where community property laws apply. Community property laws, which vary from state to state where applicable, have a great deal | more...