Articles Published in: December 2017

December 6, 2017

FHA Loan Rules For Income Verification: Part-Time Employment Income

Is it possible to be approved for an FHA home loan using part-time employment income? There are indeed FHA loan rules for this type of income and instructions to the lender for how it is to be reviewed. HUD 4000.1, the FHA home loan handbook, states that all verifiable income must meet certain FHA minimum requirements including the ability to verify two years of employment (not necessarily with the same employer). One area some borrowers may be concerned with in this area is part-time income. Does the FHA allow a lender to verify and count as income the earnings from a part-time job? The rules for this are found on page 200 of HUD 4000.1, which begins by defining what the FHA considers part-time income: “Part-Time Employment refers to employment | more...

December 5, 2017

FHA Loan Questions: Credit, Bank Statements, and Overdrafts

By Bruce Reichstein

Here is a variation on a common question about FHA home loan requirements: “How many months of bank statements are required to show the underwriters in relevance to the month we are closing on the house? Also if there are NSF/overdrafts on our account three to six months prior to our closing month, will that hurt our chances of getting the loan?” To answer these questions properly we need to do some detective work in the FHA loan rule book. Let’s start with the age of the documents needed for a home loan. The rules that govern FHA home loans says all documents must be, in general, no older than 120 days. The lender’s standards may apply in such cases-will the lender require more bank statements in order to review | more...

December 5, 2017

FHA Loans And Charge-Off Accounts

By Joe Wallace

Do you ever wonder about applying for an FHA Loan while having charge-off accounts in your credit history? Is it possible to get approved for an FHA home loan even though you have some negative credit information in your background? This is a question many ask, and the answer can be complicated depending on how old that negative credit data is, and whether or not it indicates an overall pattern of credit behavior. When you fill out an FHA loan application, your loan officer will need to examine your credit history, FICO scores, and other areas to determine your credit worthiness. Some borrowers come to the loan process with outstanding credit, others may have old issues or even currently disputed items on their credit reports that make them worry about | more...

December 4, 2017

FHA Home Loan Rules For Salary, Hourly, Part-Time Income

By Joe Wallace

Not every home loan applicant has the same type of employment, compensation, or schedule of compensation. That’s why FHA home loan rules in HUD 4000.1, the FHA single family home loan handbook, include different instructions to the lender for a diverse range of income sources. FHA Loan Rules For “Primary Income” HUD 4000.1 has sections for hourly income, salary, and part-time income. The section that includes these guidelines states that the lender is responsible for examining earnings from the home loan applicant’s “primary employment” and defines it as follows: “Primary Employment is the Borrowers principal employment, unless the income falls within a specific category identified below. Primary employment is generally full-time employment and may be either salaried or hourly.” “Current Pay” Versus “Projected Pay” According to HUD 4000.1, FHA loan | more...

December 1, 2017

Can I Get an FHA Home Loan For a Commercial Property?

By Joe Wallace

Can I get an FHA home loan for a commercial property? The answer to this question is more complicated than a simple yes or no-much depends on what local zoning laws will allow, and how “residential” the property is. FHA home loans are not just for typical suburban homes. There are a wide variety of house hunters, all looking for different types of properties to suit their needs, and there are plenty of options available aside from the suburban home. A two bedroom home in the suburbs may not be right for borrowers looking for a new home close to work in the city, or for those interested in a different type of residence than a standard house. FHA insured mortgages are available for condos, duplexes and manufactured homes. FHA | more...