Articles Published in: 2016

November 17, 2016

FHA Loan Limits In 2017: The FHA Search Tool

At the time of this writing, FHA loan limits for 2017 have not been published yet, but borrowers who need to know mortgage loan limits can look them up at the FHA official site. No matter whether you’re looking for loan limit information for the current year or for 2017, there is some important information to keep in mind. First, FHA loan limits in general are not uniform across the country. Loan limits vary depending on whether the market you’re buying in is considered a high-cost area or a market where costs are below national averages. When you are using the search tool on the FHA Mortgage Limits page on the FHA official site, you can look up the limits by state, county, or “Metropolitan Statistical Area”. Looking up multiple | more...

FHA One-Time Close Construction Loans In 2019

November 17, 2016

FHA Loan Rules: Deed-In-Lieu Of Foreclosure

By Joe Wallace

What are the FHA loan requirements for getting a new FHA loan after a deed-in-lieu of foreclosure? One reader got in touch with us recently to ask: “I completed a deed in lieu about three months ago. According to the government guidelines, how long do I have to wait before I can refinance or purchase a home?” The rules that govern FHA deed-in-lieu of foreclosure policy are found in HUD 4000.1, which state: “A Borrower is generally not eligible for a new FHA-insured Mortgage if the Borrower had a foreclosure or a DIL of foreclosure in the three-year period prior to the date of case number assignment. This three-year period begins on the date of the DIL or the date that the Borrower transferred ownership of the Property to the | more...

November 16, 2016

FHA Reverse Mortgage Counseling

By Joe Wallace

We addressed FHA reverse mortgages in a recent blog post, discussing several aspects of these home equity conversion mortgages. One thing that makes the FHA reverse mortgage program unique from FHA refinance loan options is that these types of loans (also known as FHA HECM loans) are only for qualified borrowers age 62 or older who own or almost own their homes outright. The FHA official site describes HECM loans as follows: “If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, you may participate in FHA’s Home Equity Conversion Mortgage (HECM) program. The HECM is FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity. You | more...

November 16, 2016

Mortgage Loan Interest Rate Trends: Sharply Higher

By Joe Wallace

Since the election, mortgage rates have been on the move, and this week has seen a sharp increase in rates that we haven’t experienced in some time. In fact, rates are the highest they’ve been all year. It’s unclear at this point whether this is a short term reaction to current events, or if this indicates a longer-term trend. 30-year fixed rate conventional mortgages did something they haven’t done in a very long time-they broke into the four percent range, with a best execution 4.0% for the most well-qualified borrowers. Rates have flirted with the bottom end of the four percent range in the recent past, but managed to stay below four percent for a very respectable length of time. FHA mortgage loan interest rates are now at a best-execution | more...

November 15, 2016

FHA Refinance Loans and HECM Reverse Mortgages

By Joe Wallace

There are two types of FHA loans borrowers should know about when considering their refinance loan options. One is a traditional cash-out or no cash-out refinance loan, and the other is a reverse mortgage, also known as an FHA HECM loan. HECM stands for Home Equity Conversion Mortgage. The standard refinance loan and FHA HECM options are very different and serve different needs, but depending on the borrower it may be good to be familiar with both. Typical FHA refinance loans involve situations where the borrower typically has an existing mortgage and applies for a new loan that pays off the original mortgage, creating a brand new monthly payment, loan term, etc. Depending on the terms of the loan cash back may or may not happen, but for cash-out refinancing | more...

FHA Loans And Natural Disasters: What You Should Know

November 15, 2016

FHA Loans And Debt: A Student Loan Question

By Joe Wallace

A reader asks, “I am a mother who is on a fixed income of $1600.00 a month in ft laud. my son is going to be the co borrower who lives and works in LA. Makes a good salary. We already got pre-qualified up to 300k, our credit score is above 680…question is my son has student loan of 33k and is in forbearance until next year. Will this be a problem with (an) FHA loan?” FHA loan rules in HUD 4000.1 instruct the lender on how to view debt, debt ratios, and the kinds of debt known as “deferred obligations” which may not affect the borrower’s debt to income ratio in the short term, but can do so after a home loan has closed. Sometimes, FHA loan approval may | more...

November 14, 2016

What Kind Or Refinance Loan Do You Need?

By Joe Wallace

Buying a home is sometimes only the first step in a larger financial journey-if you purchase a home with a conventional, VA, FHA or other type of mortgage loan, you might not be thinking about refinancing. But it’s an option that can be helpful in a variety of ways, especially if you understand how FHA refinance loans work. Choosing the right refinance loan is an important part of the process. Existing FHA mortgages have a refinance option that allows the borrower to get into a lower interest rate/monthly payment. This option is called the FHA Streamline Refinance mortgage and has no FHA-required appraisal or credit check. Depending on lender standards you may need one or both regardless, but the lender is free under FHA loan rules NOT to require them. | more...

November 14, 2016

HUD Announces Fair Housing Act Charges, Settlements

By Joe Wallace

The Department of Housing and Urban Development has announced a new Fair Housing Act case in Florida, and settlements of similar cases in two other states. According to a press release at the HUD official site, ” The U.S. Department of Housing and Urban Development (HUD) announced today that it is charging landlords in South Florida with discrimination against tenants with disabilities. Meanwhile, HUD is announcing separate agreements with landlords in Nevada and Massachusetts resolving similar charges.” According to the press release HUDNo.16-169, “HUD charged the owner of Hillcrest East Building No. 22, a multifamily development in Hollywood, Florida; the properties management company, Rhodes Management; and a previous president of the homeowners association with housing discrimination for failing to make reasonable accommodations, publishing discriminatory notices and statements, and attempting to | more...

November 11, 2016

Mortgage Rate Trends: Sharply Higher Post-Election

By Joe Wallace

Mortgage loan interest rates are not tied to election results. However, investor reaction to major events that have economic implications-and the 2016 Presidential election is definitely one of those-can and often does result in changes in mortgage loan rates. We won’t speculate or editorialize on the outcome of the 2016 election, that’s beyond the scope of this report. However, in the wake of election night, we have seen markets react sharply to both the results and the aftermath. On election night alone, the Dow fell dramatically after hours, with recovery the next day. This is a common knee-jerk reaction in the marketplace under such circumstances. What’s important for borrowers to know? At the moment we are in an upward trend for mortgage loan interest rates. Investor reaction to the election | more...

November 10, 2016

FHA Condo Loans: Owner/Occupancy Requirements

By Bruce Reichstein

FHA loans include the option to fill out a loan application for condo loans. Borrowers can apply to purchase a condo unit as long as the condo project is either on the FHA approved list or is added to that list. Recently we reported on the FHA’s change in rules for occupancy requirements for approval of condo projects. According to an FHA mortgagee letter, “In accordance with the passage of the Housing Opportunity Through Modernization Act of 2016 (HOTMA), the Federal Housing Administration (FHA) is required to provide guidance on the percentage of owner occupied units required to obtain condominium project approval.” To be put on the approved FHA condo loan list, the project must meet specific requirements including an owner/occupier ratio. That ratio is addressed in that mortgagee letter | more...