Articles Published in: November 2017

FHA One-Time Close Construction Mortgage Basics

November 22, 2017

How Do You Get A One-Time Close FHA Construction Loan?

How do you get an FHA construction loan? If you want to have a new home built from the ground up (as opposed to buying an “existing construction” home that already exists), an FHA new construction loan is possible. The FHA One-Time Close / Single-Close construction loan makes it much easier with a single application and closing for the entire project. Other types of construction loans feature TWO closing dates and a more complex process. FHA One-Time Close mortgages simplify the construction loan by wrapping the entire loan process up with a single application and loan approval. Not all FHA lenders offer construction loans, so you’ll need to shop around to find the right lender for your needs. There are two basic types of FHA construction loans-a “traditional” construction loan, | more...

November 22, 2017

What Are The Property Requirements For An FHA Home Loan?

By Joe Wallace

What are the property requirements for an FHA home loan? There are some basic minimum standards listed in HUD 4000.1 that can help future FHA loan applicants understand the basics, but it’s important to remember that local building code, health standards for water and sewage, and other regulations may also apply. General FHA Loan Requirements For Homes To Be Purchased With An FHA Mortgage HUD 4000.1 states that it is the lender’s responsibility to make sure “each living unit” has the following features as required in HUD 4000.1: -a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses; -sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, | more...

November 21, 2017

What Kinds Of Property Can I Buy Or Refinance With An FHA Loan?

By Bruce Reichstein

What kinds of property can I buy or refinance with an FHA loan? This is a question we’ve been examining lately, starting with the FHA requirement for homes to be used as the primary residence for at least one person obligated on the mortgage note. But there are other requirements borrowers need to know when looking for a home to buy with an FHA mortgage. Eligible Property Types For FHA Single-Family Loans HUD 4000.1 explains, “FHA’s Single Family programs are limited to one-to four-family Properties that are owner-occupied Principal Residences. FHA insures Mortgages on Real Property secured by: -detached or semi-detached dwellings -Manufactured Housing -townhouses or row houses -individual units within FHA-approved Condominium Projects” The occupancy requirements are identical for all property types. The actual date of occupancy may vary | more...

November 21, 2017

What Are The FHA Loan Rules For Occupancy?

By Joe Wallace

What are the FHA loan rules for occupancy? This is a question many borrowers are curious about, especially those who are interested in becoming landlords and earning rental income from their property. Does the FHA single family home loan program allow a borrower to rent out the property purchased with an FHA mortgage? FHA Loans Are Specifically For Owner/Occupiers HUD 4000.1, the FHA loan handbook, states clearly that at least one person obligated on the FHA mortgage is required to use the property as their primary residence: “At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year.” Furthermore, the FHA clearly defines what it considers to be a “principal residence”. On page 140 of | more...

November 20, 2017

What Do I Need To Qualify For An FHA 203(h) Rehab Loan For Disaster Victims?

By Bruce Reichstein

What do I need to qualify for an FHA 203(h) rehab loan for disaster victims? Those in the hardest-hit areas may require complete replacement of a home damaged or destroyed by Hurricane Harvey, Hurricane Irma, Hurricane Maria, or California fires. But what are the basic requirements of the FHA 203(h) rehab loan? FHA 203(h) Rehab Loans Are For Those In Federally Declared Disaster Areas The basic requirement for an FHA 203(h) rehab loan is that the applicant’s property is located in a federally declared disaster area. According to HUD 40001., “The previous residence (owned or rented) must have been located in a (federally declared disaster area) and destroyed or damaged to such an extent that reconstruction or replacement is necessary. A list of the specified affected counties and cities and | more...

November 20, 2017

HUD To Provide $5 Billion For Hurricane Harvey Recovery In Texas

By Joe Wallace

The Department of Housing and Urban Development (HUD) has announced a multi-billion dollar pledge to help Texas recover from Hurricane Harvey. According to a press release on the HUD official site, the funds will “support the repair of damaged homes, businesses and critical infrastructure in the State.” According to the press release, the funds are possible via the Continuing Appropriations Act, 2018 and the Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017. This “appropriated $7.4 billion in CDBG-DR funding for major disasters declared in calendar year 2017. To distribute these funds, the Act requires HUD to direct the funds to the areas most impacted by qualifying disasters.” The press release adds that HUD will announce additional grants “to other jurisdictions as more data become available on the unmet needs | more...

November 17, 2017

How Much Is My FHA Home Loan Down Payment?

By Bruce Reichstein

What is my FHA home loan down payment? It’s an important question to ask as early as possible in the home loan planning process. You will need to save up for an FHA loan down payment and there are a few variables that will factor in when it comes time to calculate that down payment. Do you know what they are? FHA Home Loan Down Payments Are Not A Fixed Amount The dollar amount of the required FHA loan down payment is not standardized for all home loans. Borrowers should know that the down payment is calculated based on several factors including the adjusted value of the property, credit scores, and lender standards. FHA Home Loan Down Payments Have A Minimum Requirement The lowest down payment a borrower is legally | more...

November 17, 2017

HUD Charges Kansas Property Owners With Fair Housing Violations

By Joe Wallace

The Department of Housing and Urban Development (HUD) is charging a Kansas landlord with Fair Housing Act violations after allegations of sexual harassment. According to a press release on the HUD official site, the agency “announced today it is charging the owner and landlord of several rental properties in Wichita, Kansas, and his wife, who co-owned one of the properties, with housing discrimination after the landlord allegedly sexually harassed two female tenants at his properties. HUD’s charge further alleges that he also made discriminatory statements based on one of the women’s race”. The Fair Housing Act prohibits a wide range of discriminatory practices in housing including sexual harassment. According to the HUD official site, it is a violation of Fair Housing laws to “discriminate against individuals on the basis of | more...

November 16, 2017

Do FHA Loan Requirements Change Each Year?

By Bruce Reichstein

Do FHA loan requirements change each year? This area can be a bit confusing because some aspects of the FHA loan program have changed in recent years, and some things are updated on a yearly basis. But the basic structure of the FHA loan program including FICO score minimums, appraisal rules, and occupancy requirements? These do not change from year to year. Do FHA Loan Rules Are In HUD 4000.1 Change Annually? HUD 4000.1 is the FHA Single Family Home Loan Handbook. It contains all the basic rules and requirements for FHA home loans. It lists the FICO score requirements, loan repayment history rules, debt-to-income ratio guidelines and other issues that affect FHA loan approval. These requirements do not change from year to year, but are subject to revision based | more...

November 16, 2017

What Should I Know About FHA Loan Requirements?

By Joe Wallace

What should I know about FHA loan requirements? The first thing to keep in mind is that no single factor determines your ability to borrow. Your FICO score is an important part of the loan approval process, but it’s not the only thing you will need to pay attention to in the 12 months leading up to your loan application. FHA Loan Approval Requirements FHA loan standards include a review of your FICO scores to determine whether you are eligible for maximum financing with a 3.5% minimum down payment. Those with FICO scores at 580 or higher are technically eligible for maximum financing. However, this is the FHA loan program minimum standard and your lender may have higher FICO score requirements. FICO scores affect your down payment, interest rate offerings, | more...