Articles Published in: March 2018

March 29, 2018

What You Should Know About FHA Home Loan Appraisals

What you should know about FHA home loan appraisals includes understanding the difference between one and a home inspection. You should also know that the appraisal serves as a tool for the lender to establish the fair market value of the home compared to similar ones like it in the area. The FHA appraisal is affected by state and local laws, building code, and more. FHA Appraisal Requirements For Safety And Habitability FHA loan rules for the appraisal process in HUD 4000.1 state, “As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUD’s Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). Minimum Property Requirements refer to general requirements that all homes insured by FHA be safe, | more...

March 28, 2018

More FHA Home Loan Options For New And Returning Borrowers

By Bruce Reichstein

In our last blog post we discussed some basic FHA home loan options for those who want to buy or refinance a home. More FHA loan options for new and returning borrowers alike include FHA fixed-rate and adjustable rate financing, FHA condo loans, and more. FHA Home Loan Interest Rate Options FHA home loan interest rate options are not the same at all participating lenders. Depending on both your own personal financial qualifications and lender requirements, it may be possible to apply for a fixed rate 15-year or 30-year mortgage, or for an FHA Adjustable Rate Mortgage (ARM) in the same terms. All FHA loans are generally required to amortize within the terms of the loan agreement and FHA loan rules. At the time of this writing, HUD 4000.1 states, | more...

March 23, 2018

FHA Home Loans For Houses, Condos, And Townhouses Part Two

By Bruce Reichstein

In our last blog post we began examining FHA loan rules and how they differ whether you are buying a suburban house, a condo unit or townhouse, etc. When you buy a typical suburban home, the credit check/appraisal/downpayment issues are the same as for condo units and townhouses. But when you buy a home such as a condo or townhouse, you’re required to pay more attention to common areas and agree to your share of the maintenance/upkeep of the property in general. FHA loan rules recognize these issues and addresses some (not all) of them in the FHA loan handbook to avoid confusion about what the borrower is required to do and cases where FHA loans are not allowed because of restrictions on the borrower’s ability to sell the home. | more...

March 21, 2018

FHA Home Loans For Houses, Condos, And Townhouses Part One

By Bruce Reichstein

What should you know about FHA home loans for houses, condos, and townhouses? There are plenty of issues to keep in mind including down payment requirements, appraisal rules, and special options. FHA Loan Rules For Houses The FHA loan handbook, HUD 4000.1, addresses home loans for new houses depending on their classification as existing construction, new construction, or proposed/under construction. Borrowers who want to buy an existing construction home will be looking at property that has had at least one owner. Existing construction FHA loans require an appraisal and the borrower is required to make a minimum down payment of 3.5% of the adjusted value of the property unless the transaction requires more due to credit issues, identity-of-interest problems, etc. New construction loans (such as the FHA One Time Close | more...

March 20, 2018

Property Flipping And FHA Home Loan Rules

By Joe Wallace

What do you need to know about property flipping and FHA home loan rules? The first thing to know is that flipping is addressed in the FHA loan handbook, HUD 4000.1 and there are measures in place to discourage the practice. That said, the rules which prevent flipping usually apply to the buyer’s side of the transaction. FHA loan rules don’t forbid a borrower from selling the home purchased with an FHA mortgage at any time. But the rules do have something to say about FHA mortgage approval for “flipped” homes. How FHA Defines Flipping Not all homes that are purchased and end up back in the housing market fairly quickly will meet the FHA definition of a flipped house. HUD 4000.1 defines flipping on page 145, stating: “Property Flipping | more...

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

March 19, 2018

What You Need To Know About Identity Of Interest Transactions

By Joe Wallace

What do you need to know about FHA loan down payment rules and identity of interest transactions? We’ve been covering this topic more recently due to some reader questions about how it all works; we’ve noticed some confusion about the rules in this area and who those rules apply to. FHA identity of interest transaction rules are specifically for borrowers who have a family or business relationship with the seller. In such cases, the general rule is that a 15% down payment is required. The confusion comes in over who this applies to. FHA Loan Rules For Down Payments When The Seller Is A Family Member Or Business Associate Because identity of interest transactions require a higher down payment, naturally borrowers want to know if there are exceptions and how | more...

March 16, 2018

How Much Is My FHA Home Loan Down Payment?

By Bruce Reichstein

How much is my FHA home loan down payment? That is a very important question to ask, since borrowers will need to save up for the down payment, or use approved sources for it. There is no specific dollar amount specified for your FHA home loan down payment, since the down payment is calculated using the adjusted value of the property following an FHA appraisal. Borrowers hoping for a specific dollar amount should estimate the amount of a possible down payment using a figure that is reasonably contained within the house hunter’s price range. This dollar amount will be an estimate only since the true value of the home for down payment purposes won’t be available until after the appraisal process is complete. FHA loan rules specify that for most | more...

Home Buying, FHA Loans, And Mortgage Trends

March 15, 2018

What You Can Buy With An FHA Mortgage

By Joe Wallace

Do you know what you can buy with an FHA mortgage? The answer may surprise you if there’s an assumption that only typical suburban houses are available for purchase with an FHA loan. Know your options long before you start the planning stages of your new loan-you will be glad you did. What You Can Buy With An FHA Home Loan In essence, the FHA loan program is strictly designed for home buying, for properties with as many as four living units. You cannot use an FHA loan as a personal loan, to purchase a home without (or that will not be affixed to) a permanent foundation. You can use an FHA loan to buy a home, but not a vacation home or other property that will not serve as | more...

March 15, 2018

HUD Announces Additional Hurricane Recovery Efforts In Houston

By Bruce Reichstein

The Department of Housing and Urban Development has announced a Fair Housing agreement with the City Of Houston designed to enhance hurricane recovery efforts there. According to a press release at the FHA/HUD official site, HUD and the city reached, “a joint agreement designed to expand housing choice and mobility for lower income residents, including those experiencing homelessness and victims of Hurricane Harvey.” The agreement includes a new requirement for the City of Houston to adopt “multifamily priorities and a policy for objectively evaluating federally supported affordable housing developments in all areas of Houston; to seek to invest additional funds in homeless assistance programs, and; to encourage more landlord participation in Houston’s housing voucher program”. “Today, we announce a positive agreement that works to expand housing options for lower income | more...

March 14, 2018

Who Can Apply For FHA Cash-Out Refinancing? What You Need To Know

By Joe Wallace

Who can apply for FHA cash-out refinancing? Believe it or not, the FHA loan handbook, (HUD 4000.1) has guidelines in this area you should know. Some home owners purchase their homes and choose to refinance. But others might inherit their property and decide at that time to explore their cash-out refi loan options. What does the FHA have to offer? FHA Cash-Out Refinance Rules-The Basics FHA cash-out refi loans have an ownership and occupancy requirement; not just anyone can apply for an FHA cash-out refinance loan. HUD 4000.1 instructs the lender: “Nonprofit agencies, state and local government agencies and Instrumentalities of Government are not eligible for cash-out refinances. Income from a non-occupant co- Borrower may not be used to qualify for a cash-out refinance.” That seems basic enough, but this | more...