Articles Published in: 2018

March 5, 2018

FHA Streamline Refinance Loan Rules: Credit, Occupancy

FHA Streamline refinance loan rules for credit, occupancy, and more are found in HUD 4000.1, the FHA loan handbook. FHA Streamline refinancing is for borrowers who have existing FHA mortgages and want to apply to refinance into a lower mortgage rate, a lower monthly payment, or into a fixed rate FHA mortgage out of an adjustable rate FHA loan. FHA Streamline Refinance loans have no FHA-required credit check or appraisal. Your participating lender may require one anyway, but you’ll need to discuss those issues with a loan officer. The rules in HUD 4000.1 begin by stating what kinds of property can be refinanced with an FHA Streamline loan. “Streamline Refinances may be used for Principal Residences, HUD-approved Secondary Residences, or non-owner occupied Properties.” The lender is required to verify occupancy | more...

March 2, 2018

FHA Foreclosure Relief For 2017 Disaster Victims

By Bruce Reichstein

In late February 2018, the FHA announced additional foreclosure relief measures for victims in federally declared disaster areas in 2017. According to the FHA official site, the new measures are intended to be an expanded version of “mortgage relief to FHA-insured homeowners who live or work in areas impacted by Hurricanes Harvey, Irma and Maria as well as California wildfires and subsequent flooding and mudslides.” The FHA has ordered participating FHA lenders to offer “additional options to eligible disaster victims in Texas, Louisiana, Georgia, Florida, South Carolina, California, Puerto Rico and the U.S. Virgin Islands, allowing them to remain in their homes while reducing losses that would otherwise negatively impact FHA’s Mutual Mortgage Insurance Fund” according to the press release. At the heart of these new measures is something called | more...

March 1, 2018

FHA Home Loan Fact And Fiction

By Joe Wallace

FHA home loan fact and fiction; do you know what’s true and what’s not about your FHA home loan options? There are plenty of misconceptions about getting an FHA home loan including the all-time number one-the idea that FHA loans are ONLY for first-time home buyers. That is definitely NOT true. FHA loans are for any financially qualified borrower regardless of their previous home ownership status. FHA home loan fictions also include the idea that you can only purchase a typical suburban home with an FHA mortgage; this is also not true as FHA loans can be approved for mobile homes, condo units, mixed-use property that is primarily residential, town homes, and multi-unit homes. The truth about FHA home loans is that borrowers are allowed to buy “real property” with | more...

March 1, 2018

FHA Appraisal Rules And Model Building Codes

By Bruce Reichstein

When it comes to FHA appraisal rules, it’s easy to forget that the appraisal requirements and minimum property standards set by the FHA are not the only regulations which must be followed. State law, and local building codes also apply. The FHA/HUD official site includes instructions to participating lenders and appraisers about model building codes and how FHA mortgage appraisal rules work together in the FHA loan transaction process. According to FHA.gov, “The Minimum Property Standards (MPS) establish certain minimum standards for buildings constructed under HUD housing programs. This includes new single family homes, multi-family housing and health care type facilities”. At one time there were a variety of minimum property standards for different types of properties. But since the era of the 1980s, the Department of Housing and Urban | more...

February 28, 2018

Know Your FHA Loan Options

By Joe Wallace

Do you know your FHA home loan options? There are many things you can do with an FHA mortgage and buying a new home is just one of them. You can use an FHA home loan to buy, refinance, rehab, or upgrade a principal residence, with lower down payments and protections for the borrower when paying off early. FHA New Home Loans Did you know you can use an FHA mortgage to buy an existing home or have one built for you from the ground up? Buying an existing property is one of the most common uses of an FHA mortgage, but you can apply for an FHA One-Time Close Construction Loan (also known as an FHA Construction-To-Permanent loan) using an approved builder to have a house built brand new. | more...

Rent Or Buy? Arguments For Purchasing A Home With An FHA Mortgage

February 27, 2018

FHA Home Loan Down Payment Rules You Should Know

By Joe Wallace

FHA home loan down payment rules you should know include the minimum amount down, acceptable sources of down payment funds, and how other closing costs and associated expenses related to your down payment requirements. Do you know how your chosen FHA lender will calculate your down payment? Knowing before you apply can help plan and save for this and other required closing costs. FHA Loan Down Payments: A Minimum Required Investment FHA loan rules in HUD 4000.1 refer to the down payment as a minimum required investment (also referred to as an MRI for short), not to be confused with the borrower’s Total Required Investment, described in HUD 4000.1 as: “Total Required Investment refers to the amount the Borrower must contribute to the transaction including the Borrower’s downpayment and the | more...

February 26, 2018

FHA Loans, Credit Reports, And Loan Approval

By Bruce Reichstein

What do you need to know about FHA loans, credit reports, and loan approval? To begin, your credit reports have a big part to play in the lender’s decision to approve your mortgage application. What do you need to know about this approval process and what the lender is looking for? Home Loans Require More Than Good Credit Scores FHA loans, like any other major line of credit, require the lender to determine that the applicant is a good risk for the loan. Your FICO scores may be well within the range the lender needs to approve your loan with maximum financing (that score may vary depending on the lender) but what ELSE does your credit report say? For example, are you carrying the maximum or close to the maximum | more...

February 23, 2018

FHA Announces Foreclosure Avoidance Help For Federal Disaster Areas

By Joe Wallace

The FHA has announced extended foreclosure relief measures for those in qualifying federal disaster areas. According to a press release on the FHA official site, new guidance for participating FHA lenders will apply for those affected by a wide range of natural disasters including: Louisiana (Hurricane Harvey) DR-4345 Texas (Hurricane Harvey) DR-4332 Florida (Hurricane Irma) DR-4337 Georgia (Hurricane Irma) DR-4338 Puerto Rico (Hurricane Irma) DR-4336 South Carolina (Hurricane Irma) DR-4346 Virgin Islands (Hurricane Irma) DR-4335 Puerto Rico (Hurricane Maria) DR-4339 Virgin Islands (Hurricane Maria) DR-4340 California (Wildfires) DR-4344 or California (Wildfires, Flooding, Mud Flows, Debris Flows) FEMA-DR-4353 There is a lengthy description of some of the new program changes (which we will cover in another blog post) but one of the most important developments included in the FHA announcement has | more...

February 22, 2018

FHA Loan Credit Requirements And Your Credit Scores

By Joe Wallace

FHA loan credit requirements state that the lender must pull your credit information and credit scores to review a borrower’s credit worthiness. But if you are applying for an FHA loan you likely have three credit scores the lender must contend with. Borrowers often want to know how the lender views these three scores-they can be different from one another depending on circumstances-and which of multiple credit scores is actually used to process your home loan. The rules for FHA credit score requirements are found in HUD 4000.1, the FHA loan handbook. Credit scores must come directly from the three credit reporting agencies and cannot be submitted or transmitted to the borrower or another third party then submitted to the lender. Your credit scores must come from the source. FHA | more...

February 21, 2018

FHA Mortgage Loans: Credit History Counts

By Joe Wallace

When it comes to FHA mortgage loans, or any major line of credit, your credit history counts. Some might focus on the FICO score, but the numbers you get off your credit report are not the only credit qualifications needed to successfully apply for an FHA mortgage. Credit Report Data: The Big Three Many people use the phrase “Big Three” to refer to the three credit reporting agencies themselves; Equifax, Experian, and TransUnion. But here, we’re referring to the Big Three on your credit report itself. Your credit score, credit history, and the amount of credit you carry. The Big Three credit factors all count towards your potential loan approval or denial. Why? The lender is required to establish that you are a good credit risk for the loan. Your | more...