Articles Published in: 2018

February 20, 2018

Should I Refinance With An FHA Mortgage?

Should I refinance with an FHA mortgage? There are many reasons why you might want to consider refinancing, especially if you are looking for a more competitive interest rate or need to move into a fixed rate loan instead of continuing with an adjustable rate mortgage. I Want To Get A Different Interest Rate Typically, on paper FHA mortgage loans do offer more competitive interest rate and it is possible for borrowers to get access to better rates with an FHA loan. But there is a very important factor here to consider-your credit history and FICO score may dictate your access to the most competitive rates. If you have excellent credit, your chances of a more competitive rate are better. If you have lower FICO scores or represent an increased | more...

February 20, 2018

HUD Announces Resolution In California Fair Housing Case

By Joe Wallace

The Department of Housing and Urban Development has announced the resolution of a California Fair Housing Act discrimination case. According to a press release at the HUD official site, the agency has reached an agreement with the Housing Authority of the County of Contra Costa (HACCC) and the Vallejo Housing Authority (VHA), “resolving allegations that they violated the Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act when they allegedly denied a request by a resident with disabilities to extend her search time to find suitable housing that would accept her Housing Choice Voucher”. Fair Housing Act laws make it illegal to discriminate against those buying or renting a home by “denying or limiting housing to persons with disabilities, or discriminating in | more...

February 19, 2018

Happy Presidents’ Day 2018

By Bruce Reichstein

Happy Presidents’ Day 2018! Today banks and markets are closed, and we pause from our usual schedule of writing posts and answering questions about FHA home loans to observe the holiday. We return with our regular content schedule tomorrow. Thank you very much for reading!

February 16, 2018

FHA 203(k) Rehab Mortgages: Who Does The Rehab Work?

By Joe Wallace

When it comes to FHA 203(k) rehab loans, many borrowers want to know who does the work? Can the borrower hire a contractor, is the borrower required to do the work themselves? What are the rules? The guidelines for the FHA 203(k) rehab loan program are found in HUD 4000.1, which states that certain standards are in place when trying to select the contractors to do the labor. For starters, this type of loan requires that the borrower use the services of a 203(k) loan consultant. “The Mortgagee must select an FHA-approved 203(k) Consultant from the FHA 203(k) Consultant Roster in FHAC. The Mortgagee must not use the services of a Consultant who has demonstrated previous poor performance based on reviews performed by the Mortgagee. The Consultant must inspect the | more...

February 15, 2018

Should I Refinance My Home Loan With An FHA Mortgage?

By Bruce Reichstein

Should I refinance my home with an FHA mortgage? There are several reasons why it’s good to consider your FHA options when it’s time to start planning a refi loan. I Want To Refinance To Get A Lower Interest Rate If you pay attention to online mortgage loan interest rate reports, you’ll see that in general FHA mortgage loan rates are lower than their conventional counterparts. The interest rate issue can be hard for some to understand because they see these rates compared side-by-side and assume those numbers are at or near what they will be offered if they applied at that moment. But interest rates are negotiated between the borrower and lender for FHA refinance loans, and a borrower’s credit plays a large part in determining what interest rates | more...

February 15, 2018

The Truth About FHA Appraisals

By Joe Wallace

There are some borrowers who don’t know the truth about FHA appraisals. They mistake the appraisal process for something it is not and make the wrong assumptions about the home they are purchasing based on the outcome of the FHA appraisal. This has the potential to create major problems down the line, because relying on the appraisal alone (instead of paying for the optional but critically important home inspection) doesn’t give the borrower all the information she or he needs to make an informed decision about purchasing a property. There’s an old maxim about appraisals; basically that they are a tool for the lender, not the borrower. The FHA appraisal process is not intended to be a stamp of approval on the home implying that it is fully defect-free. Borrowers | more...

February 14, 2018

FHA Appraisal Rules When Switching Lenders

By Bruce Reichstein

Do you know what the FHA loan appraisal rules are for switching lenders? It’s true that not all borrowers will experience a situation where a change in lenders is needed, but a borrower is free to do so under FHA loan rules. In such cases an appraisal transfer may be required, and in others the new lender may wish to order a second appraisal. Is the new lender allowed to do so? According to HUD 4000.1, the FHA loan handbook, the lender is prevented from ordering a second appraisal (new lender or not) just to get a different result from the process. But there are circumstances where the new appraisal might be necessary and permitted. HUD 4000.1 states that for the original lender, “A second appraisal may only be ordered | more...

February 14, 2018

Can I Get A Second FHA Appraisal If I Don’t Agree With The First One?

By Joe Wallace

A common question some newcomers to the home buying process ask; “Can I get a second FHA appraisal if I don’t agree with the first one?” FHA loan rules anticipate situations like these. Some borrowers or sellers don’t share the opinion of the appraiser for a variety of reasons; some may simply wish to have the home appraised again to see if the results are more advantageous. But FHA loan rules don’t allow a second appraisal simply for the purpose of getting a different result. HUD 4000.1, the FHA loan handbook, instructs the lender on how she may proceed with a second FHA appraisal request. For example, page 128 of HUD 4000.1 states clearly, “The Mortgagee is prohibited from ordering an additional appraisal to achieve an increase in value for | more...

February 13, 2018

What Can Affect An FHA Appraisal Or Inspection?

By Bruce Reichstein

What can affect an FHA appraisal or an FHA-required inspection? There are many factors that might influence the outcome of these procedures. For example, borrowers who are having a home custom-built using an FHA One-Time Close construction loan will learn about appraisal requirements that include noting the proximity of the project to gas stations, power lines, and other safety-related issues. The rules that instruct the lender and appraiser in these areas can be found in the FHA loan handbook, HUD 4000.1. Airport hazards, slush pits, and operating oil wells are just some areas the appraiser will note where applicable. For projects classified as New Construction under FHA loan rules, the appraiser must note the general environmental conditions of the area of the construction project and adjacent areas. According to HUD | more...

February 13, 2018

Am I Eligible For An FHA Mortgage?

By Joe Wallace

Am I eligible for an FHA mortgage? That is a very common question, but many borrowers have a specific reason for asking-they want to know if a certain credit problem or work/life situation might disqualify them from an FHA loan. I Have A Recent Bankruptcy Borrowers with bankruptcy issues will have to discuss their situation with a participating lender, but in general at the very minimum you will be required by FHA guidelines to wait a full year (called a “seasoning period”) before applying for a new loan. In some cases you may be required to wait longer, and lender standards apply above and beyond the FHA loan rules. Getting a loan post-bankruptcy requires the applicant to have good credit habits post-bankruptcy, and in some cases you may need the | more...