Articles Published in: April 2017

April 28, 2017

Fair Housing Month And HUD

Fair Housing Month ends this weekend. This month-long campaign to raise awareness of Fair Housing laws is an important one, which includes measures taken by the Department of Housing and Urban Development to help house hunters and apartment seekers alike to get fair consideration when applying to find or buy a home. Those measures in 2017 include a trying to raise awareness of certain persistent types of discrimination. According to the HUD official site, one version is particularly troublesome. “Every type of discrimination robs individuals and families of their right to choose where to live, but one form of discrimination HUD is particularly active in addressing is discrimination against families with children, known as familial status discrimination.” HUD states that every year, more than ten percent of all Fair Housing | more...

April 27, 2017

An FHA Loan For A Flipped Home?

By Joe Wallace

Is a flipped home eligible for an FHA mortgage? That’s what one reader wanted to know this week. “What are the rules for buying properties that have been ‘flipped’ meaning an investor/homeowner has purchased the property did some updates and are now attempting to sale the property.” “Are there any sort of timing requirements (i.e. a buyer cant buy before 6 months after seller has purchased property)? Also, is there any sort of maximum markup on the price the investor is attempting to sale for on the property?” FHA loan rules in HUD 4000.1 are clear on this issue. According to page 146 of HUD 4000.1, “A Property that is being resold 90 Days or fewer following the sellers date of acquisition is not eligible for an FHA-insured Mortgage.” There | more...

April 27, 2017

Mortgage Rate Trends: Moving Higher

By Joe Wallace

Since our last report, mortgage rate numbers went from an incursion into sub-four percent territory for the most competitive lenders back up to highs we haven’t seen in approximately two weeks. Domestic tax policy, overseas election drama, and other factors have played a part in the recent ups and downs, but what we’re seeing is short-term influences rather than indications of a possible long-term trend. At the moment it’s tough to say what the mid-to-long term direction of rates might be. We’re in an uncertain period and much of our reporting lately on mortgage rate movement has to do with these short term issues. At the time of this writing, 30-year fixed rate conventional mortgages are back to a range between the very bottom of the four percent range and | more...

Buying A Fixer-Upper With An FHA 203(k) Rehab Loan

April 26, 2017

FHA Loans For Additional Homes: A Reader Question

By Bruce Reichstein

Are FHA loans for multiple properties possible? That’s what’s on one reader’s mind recently. “So is there a maximum number of properties one can theoretically have under FHA guidelines?” “Say for example a person owns a home in one city with an FHA mortgage and then has to relocate to another city for job reasons. While in this city there family size increases by several individuals via marriage and or kids. Would that person be able to get a 3rd FHA? mortgage.” This reader question about FHA loans is in response to a blog post we did recently about the issue of applying for another FHA mortgage while currently paying on an existing FHA home loan. The gist of that post is that while FHA loan rules do not generally | more...

April 26, 2017

FHA Reverse Mortgages: An Appraisal Question

By Joe Wallace

A reader asked us a question in the comments section recently about FHA reverse mortgages and the appraisal process for them. “We have a detached garage with a 500 square foot “mother-in-law unit” on top. Will this structure be included in the appraisal in which the reverse mortgage is based on?” FHA loan rules for appraisals are found in HUD 4000.1. Before quoting the rules for appraising what the FHA loan rule book classifies as an “accessory dwelling unit” or ADU, it’s important to remember that state law, and certain building code requirements may also apply. FHA appraisals include determining whether an outbuilding is an ADU or not. The FHA definition of an ADU is as follows: “An Accessory Dwelling Unit (ADU) refers to a habitable living unit added to, | more...

April 25, 2017

Bad Credit FHA Loans? A Reader Question

By Joe Wallace

A reader got in touch about bad credit home loans in our comments section this week. “I am looking for companies/banks/ or mortgage companies that help people refinance during bankruptcy 13 and bad credit.” Does the FHA single family home loan program offer “bad credit” FHA mortgages? This reader comment/question shows that there are still some misconceptions about how the FHA loan program works. There’s no such thing as a “bad credit” FHA mortgage. Borrowers either qualify for the home loan or they don’t. But what are the actual standards for FHA loan approval? That’s complicated. There is a baseline minimum set of FICO scores that a borrower needs to have to even be considered under the FHA loan program. For maximum FHA financing with a required minimum down payment | more...

April 25, 2017

Mortgage Loan Interest Rate Trends: Higher

By Joe Wallace

Since our last report, we’ve seen rates climbing again, but the most recent uptick in numbers has a lot to do with global political headlines rather than domestic economic issues or market corrections. The election results in France have certain implications-one candidate favors a French version of Brexit and investors watching the results unfold have reacted in ways unfavorable to mortgage loan interest rates. At the time of this writing, we’re seeing upward movement in rates; 30-year fixed rate conventional mortgages are in a best execution range between 4.0 and 4.125%-remember last week we reported some aggressive lenders were offering best execution rates below the four percent line for the first time in a long while. FHA mortgage loan rates are reported at the time of this writing in a | more...

How much can I borrow with an FHA refinance loan?

April 24, 2017

Are You Ready For An FHA Mortgage?

By Joe Wallace

Are you ready to apply for an FHA mortgage in 2017? There are several areas that borrowers should spend plenty of time examining before filling out paperwork or online forms to apply or get pre-approved for a mortgage loan. Credit Reports If you do not know what your lender will see when she pulls your credit report, there’s a good chance you are not ready to fill out FHA loan paperwork. Why? Because if there are errors on your report, questions over certain accounts that may need to be disputed or contested, evidence of identity theft, those will all need to be dealt with before you apply for your loan. A lender can work with a borrower who has disputed accounts still pending (assuming the lender’s standards permit) but if | more...

April 24, 2017

FHA Loans and Alimony/Child Support

By Joe Wallace

A reader asked a question in our comments section about FHA loan rules for alimony and child support payments: “What is a voluntary payment agreement? I am divorced its a closed case and I actually pay a little more than what we agreed to in the official settlement agreement. Shes now trying to buy a house and will be dealing with the whole proving amount of alimony/child support and its very difficult to amend a closed case.” “If we have an agreement between ourselves for (x) dollars/month for (x) amount of time and have this notarized, would this constitute a voluntary payment agreement?” The reader is referencing an earlier blog post from 2013, which includes the following about how the lender may consider alimony and child support as part of | more...

April 21, 2017

Down Payment Assistance and FHA Loans

By Joe Wallace

A reader got in touch this week about a question related to down payment assistance for FHA mortgages. “I’m buying a home for 175,000. I’ve been cleared to close. Ive been approved for $30,000 down payment assistance which has covered all my down/closing fees.” “A day before closing the FHA is saying I still need to pay 3.5% of the purchase. Is it still required? I thought with FHA at least $1000 earnest money was enough. I had $30,000 already approved.” Answering this question is difficult for two reasons-we don’t know the specifics of the gift funds, and whether those funds were actually considered down payment assistance or contributions toward closing costs. There is a big difference between down payment assistance funds, and funds contributed to closing costs. FHA loan | more...