Articles Published in: 2017

Refinancing a Second Home With An FHA Mortgage Loan

August 29, 2017

What Happens To FHA Loans Not Endorsed Prior To A Natural Disaster?

In our previous blog post, we examined FHA loan rules for properties that were in the process of being purchased (but had not closed the deal) before a natural disaster struck. What happens when an FHA home loan is not endorsed by the lender prior to the disaster? The answer may first depend on whether or not the location of the home is in a federal disaster area or not. The following information applies only to homes located in a federally declared major disaster area-according to HUD 4000.1, the FHA loan handbook: “All Properties with pending Mortgages or endorsements in Presidentially-Declared Major Disaster Areas (PDMDA) must have a damage inspection report that identifies and quantifies any dwelling damage. The damage inspection report must be completed by an FHA Roster Appraiser | more...

August 29, 2017

What Happens To My FHA Loan In A Natural Disaster?

By Bruce Reichstein

What happens to my FHA loan in a natural disaster? If you have already closed on your FHA mortgage, you’ll need to get in touch with your lender to determine what next steps are, but what about those who were in the process of purchasing property but did not close the loan before the disaster struck? FHA loan rules anticipate this problem and have specific instructions to the lender for handling what to do if a borrower’s purchase winds up in a federally declared disaster area. According to the FHA loan handbook, HUD 4000.1, “All Properties with pending Mortgages or endorsements in Presidentially-Declared Major Disaster Areas (PDMDA) must have a damage inspection report that identifies and quantifies any dwelling damage. The damage inspection report must be completed by an FHA | more...

August 28, 2017

HUD Issues Announcement On HECM Loan Policy Changes

By Joe Wallace

The Department of Housing and Urban Development has issued a mortgagee letter detailing changes to the FHA loan HECM program (also known as FHA Reverse Mortgage program) effective for all case numbers assigned on or after September 19, 2017. According to Mortgagee Letter 2017-11, the changes affect how participating lenders proceed in cases where there has been a loan default for “unpaid property charges” and the sale of property secured by an FHA HECM that has been declared due and payable. According to the FHA/HUD official site, for cases where unpaid property charges cause a HECM loan to go into default, new guidance to lenders includes the following: “If a Borrower is unable or unwilling to repay the Mortgagee for any Mortgagee funds advanced to pay property charges, the Mortgagee | more...

August 28, 2017

White House Announces Federal Disaster Assistance For Texas

By Bruce Reichstein

On Friday, August 26, 2017, the White House announced federal aid for Texas to help affected counties in the state recover from Hurricane Harvey. According to Whitehouse.gov, the President “declared that a major disaster exists in the State of Texas and ordered Federal aid to supplement State and local recovery efforts in the areas affected by Hurricane Harvey beginning on August 23, 2017, and continuing.” A complete list of affected counties named as federal disaster areas is not available at the time of this writing, and conditions may be such that more counties are listed in the coming days or weeks. But for all affected areas, the FHA and HUD have disaster relief measures that can help home owners trying to recover from the effects of the hurricane including high | more...

August 25, 2017

What If My Home Was Damaged In A Natural Disaster?

By Joe Wallace

What if my home was damaged in a natural disaster? This is an important question. The answers, depending on circumstances, may affect FHA borrowers and non-FHA borrowers alike. The FHA and HUD official site discusses a variety of remedies for those who have experienced a natural disaster. Some of the most important advice? Contact your lender, your insurance agent, and FEMA as soon as possible after the disaster to make arrangements regarding FHA loan forbearance, foreclosure avoidance, and federal assistance. For borrowers with conventional mortgages, different options and requirements may apply. It is not safe to assume that any of the above is automatic-in most cases help must be applied for, especially where FEMA is concerned. Borrowers should also not allow themselves to be pressured into quick insurance settlements. You | more...

August 24, 2017

Do Section 8 Housing Vouchers Count For FHA Loans?

By Bruce Reichstein

There are many different types of income that can be used to qualify for an FHA home loan. While there is no minimum or maximum income requirement to qualify for an FHA mortgage, the borrower’s debt-to-income ratio, stability and duration of income, and other factors will be scrutinized as part of the loan application process. Some income is simple to verify. Other types of income have have additional requirements. That is true of certain public assistance including Section 8 Housing Choice vouchers and income received from government-run public assistance programs. In these cases the duration of the payments will be an important factor. Using Section 8 Housing Choice Vouchers As Income The FHA loan handbook, HUD 4000.1, states on page 210 that a lender is responsible for verifying the nature | more...

August 24, 2017

Can I Get An FHA Loan After A Short Sale?

By Joe Wallace

Can I get an FHA loan after a short sale? This is a question we handle frequently, and the answer depends on circumstances as well as guidelines found in HUD 4000.1, the FHA loan handbook. HUD 4000.1 starts off by defining what it considers to be a “short sale”, also known as pre-foreclosure sales. According to the handbook, these terms refer to “the sales of real estate that generate proceeds that are less than the amount owed on the Property and the lien holders agree to release their liens and forgive the deficiency balance on the real estate.” So we see that a short sale is something that can affect your credit, and as we’ll see, the ability to purchase a home in the near future after the sale. FHA | more...

August 23, 2017

Can I Get An FHA Home Loan After Foreclosure?

By Bruce Reichstein

Can I get an FHA loan after foreclosure? This is a question that comes up quite often. The answer depends on a variety of factors including the date that the foreclosed property was transferred out of the borrower’s name. The FHA loan handbook, HUD 4000.1, states that the FHA minimum requirements for getting a new loan following a foreclosure include a waiting period. This period, often called a “seasoning period” or “seasoning requirement” is normally three years. From HUD 4000.1: “A Borrower is generally not eligible for a new FHA-insured Mortgage if the Borrower had a foreclosure or a Deed-In-Lieu of foreclosure in the three-year period prior to the date of case number assignment.” The next line in that section is a crucial one: “This three-year period begins on the | more...

August 23, 2017

Can I Get An FHA Loan After Bankruptcy?

By Joe Wallace

Can I get an FHA loan after bankruptcy? That question is a common one, and the answer depends as much on the borrower as it does on the rules of the FHA single family loan program. In general, those who experience bankruptcy will be required to wait out a “seasoning period” described in HUD 4000.1 (the FHA loan handbook). Depending on what type of bankruptcy you filed, borrowers may also be required to get court permission before attempting to proceed with a new home loan. Mandatory FHA Loan Seasoning Periods Following Bankruptcy Bankruptcy rules may vary depending on the type, but in general a borrower’s minimum waiting period will be 12 months from the time the bankruptcy is discharged. The waiting period does NOT begin from the filing date. FHA | more...

August 22, 2017

Who Can Apply For An FHA Mortgage?

By Bruce Reichstein

Who can apply for an FHA mortgage? The answers to this question-and yes, there are several parts-may surprise you. One aspect of the answer involves whether or not the applicant is of legal age, and another has to do with credit scores. Who is eligible to apply for an FHA mortgage? FHA Loans Are For Legal Adults According to HUD 4000.1, the FHA loan handbook, “The Borrower must be old enough to enter into a mortgage Note that can be legally enforced in the state, or other jurisdiction, where the Property is located (‘State Law’). There is no maximum age limit for a Borrower”. FHA Loans Are For Those With Social Security Numbers HUD 4000.1 requires all applicants to provide Social Security Numbers to the lender. However, there is no | more...