Articles Published in: 2015

September 9, 2015

HUD 4000.1 Frequently Asked Questions: EEM

On September 14, 2015, the new FHA Single Family Home Loan policy handbook goes into effect. There are changes to existing policy, clarifications of existing policy, and other useful information for lenders and borrowers alike. We’re examining some frequently asked questions about FHA loan rules–the answers to which will be official FHA policy when the new handbook launches on the 14th. One area that has a variety of questions concerns the FHA’s Energy Efficient Mortgage (EEM) program. Can a borrower finance energy efficient repairs without taking out an FHA EEM? What are the borrower’s options as described in HUD 4000.1? According to the FHA/HUD official site: “The borrower can finance the cost of eligible energy-related weatherization improvements in conjunction with: –Section 203(b) purchase or no cash-out refinance –Section 203(h) Mortgage | more...

September 8, 2015

FHA Mortgage Loan Interest Rate Trends: Higher After Holiday Weekend

By Joe Wallace

Last week mortgage loan rates attempted some downward momentum, but it wasn’t anything close to being a decisive move lower. There is a great deal of anticipation at the moment–all eyes are on the Fed who are due for another meeting where the fate of U.S. interest rates could be decided–will there be a rate hike announced in September? Will the Fed hold off on raising interest rates until December? Those questions seem to be holding mortgage rates in a sideways-to-slightly-higher situation in the short term. After the three-day weekend, mortgage loan rates edged slightly higher, putting 30-year fixed rate conventional mortgages more squarely in 4.0% best execution territory, up from the previous range between 3.875% and 4.0%. So far, FHA mortgage loan rates are holding steady, best execution, at | more...

What happens to my FHA loan in a natural disaster?

September 8, 2015

What Can Hurt My Chances For FHA Loan Approval?

By Joe Wallace

There has been a lot written about how FHA home loans work, and what it takes to get approved for an FHA mortgage. Knowing what the lender expects from your loan application is one thing, but knowing what could hurt your chances for loan approval can be just as important. FICO scores are obviously one of the main initial concerns for the lender–you may find lenders who want FICO scores of 620 or higher. But those credit ratings aren’t the only thing that affects that first impression factor. Coming to the FHA loan process with any late payments on your credit history in the last 12 months is not recommended–anything less than a solid record of on-time payment on all financial obligations for the previous 12 months can hurt your | more...

September 8, 2015

HUD 4000.1 Single Family Home Loan Rules: Frequently Asked Questions

By Joe Wallace

A new policy guide for FHA single-family home loans goes into effect on September 14, 2015. It’s called HUD 4000.1 and will have all the FHA home loan policy guidance contained within it, with some new revisions, updates, and other material borrowers and lenders should know about. In order to help ease the transition to the new rules (where applicable) the FHA and HUD official site includes a Frequently Asked Questions (FAQ) section about the new rules. Some of those questions are specifically for the lender, others include guidelines that affect borrowers and lenders alike. Some of the “new” material in HUD 4000.1 is a restatement or re-emphasis of existing policy, other portions may be slightly modified or changed in more substantial ways, depending. Here’s one portion of the FAQ | more...

September 7, 2015

Happy Labor Day 2015!

By Joe Wallace

Happy Labor Day! We pause from our usual posts about FHA home loans to observe the holiday. Markets are closed today and reopen tomorrow, and our coverage of FHA loan news and mortgage rate news will resume on Tuesday. Have a safe and fun holiday!

September 5, 2015

FHA Mortgage Loan Interest Rate Trends: Moving Lower

By Joe Wallace

It was a volatile week for mortgage loan rates in general. Many were looking to Friday as a big day for potential rate movement thanks to an anticipated jobs report. But when the Employment Situation report was released, it didn’t do much to rates as investors didn’t react to the data in ways that could have pushed the rates significantly higher or lower. And so we saw rates inching back down on Friday, with 30-year fixed rate conventional mortgages hovering between 4.0% and 3.875%, best execution. Rates had been closer to 4.0% for much of the week until Friday, though some lenders may have offered the low end of the current range depending on borrower qualifications. In all this week’s volatility and upward movement, FHA mortgage loan rates are still | more...

September 4, 2015

Selling The Home You Purchased With An FHA Mortgage

By Joe Wallace

We get many questions about appraisals, valuation and related issues. Many of the questions that come to us in the comments section come from home buyers, but a few come from those who want to sell the house they purchased with an FHA mortgage loan. One recent question in that area came from a reader who wanted to know what the best way to repair cracks in a basement wall might be, and whether or not the home should be put up for sale before the repair process was completed. The only way we can respond to questions like that is to say that it’s outside the scope of what we write about on this blog, but those looking for answers to questions in cases like these won’t be satisfied | more...

September 4, 2015

FHA Loan Rules For Lenders: HUD 4000.1

By Joe Wallace

We’ve been reporting on a series of rule updates, amendments, and modifications to FHA single-family home loan policy scheduled to take effect on September 14, 2015. The new FHA Single Family Housing Handbook, also known as HUD 4000.1, contains all the rules and requirements for the FHA single family home loan program. The FHA/HUD official site has a Frequently Asked Questions list that addresses questions about a variety of aspects related to HUD 4000.1. Some of those questions involve FHA policy that pertains to borrowers, some pertain strictly to the lender. For example, lenders may wonder what the FHA policy is with regard to becoming or remaining a participating FHA lender. The FAQ section addresses that specific issue with a list of guidelines that include the following under a section | more...

When Is An FHA Loan Better Than A Conventional Loan?

September 3, 2015

FHA Refinance Loans: When Is A New Appraisal and/or Credit Check Required?

By Joe Wallace

Borrowers who want to refinance may wonder which FHA refinance loans offer no credit check or new appraisal. Are such loans possible? The answer may depend on your lender and other factors, but let’s see what options are open: For starters, non-FHA loans refinanced under the FHA single family home loan program will always require a new appraisal and credit check. This is because the only refinance option for non-FHA mortgages (aside from reverse mortgages offered under the FHA program, which also require new appraisals and credit documentation) is the cash-out refinance option or the no-cash-out equivalent. Which leaves only FHA-to-FHA Interest Rate Reduction Refinance loans (IRRRLs) with a possible option to apply with no credit check or appraisal. But there’s a caveat with these loans–the FHA loan program does | more...

September 3, 2015

Common Questions About Policies In The New Single Family Housing Handbook, HUD 4000.1

By Joe Wallace

The FHA will launch the new FHA Single Family Home Loan Handbook, HUD 4000.1, on September 14th. There will be certain updates, changes, alterations and revisions of some FHA loan policy in the handbook, and the FHA/HUD have anticipated some frequently asked questions about existing or new policies contained in that handbook. In the days leading up to the launch, we’re covering some of those FAQ topics here. Some may apply to borrowers, some apply to lenders, and there are a variety of topics that may be relevant to both. One frequently asked question topic of concern to lenders is the question of how much, if any, work associated with an FHA loan can be contracted out to third parties. FHA loan rules that take effect on September 14, 2015 | more...