Articles Published in: 2018

February 2, 2018

How Do Student Loans Affect My FHA Home Loan Application?

How do student loans affect my FHA home loan application? Some applicants worry about the amount of student loan debt they carry; after all the lender is required to determine the borrower’s debt-to-income ratio as a means to judge whether the loan is affordable or not. The debt ratio must be calculated using existing monthly debt, including student loans that are in forbearance. The fact that the loans are not being paid on at application time isn’t as critical as the idea that the loans may become a monthly obligation in the future, affecting the borrower’s ability to pay the mortgage loan. What do FHA loan rules say about student loans, and those student loans that are in deferment or forbearance? We use those two terms interchangeably here, defined as | more...

FHA One Time Close Construction Loan Option

February 1, 2018

FHA One-Time Close Construction Loan Rules For Maximum Mortgage, Down Payment

By Bruce Reichstein

FHA One-Time Close / Single-Close Construction Loan rules for maximum mortgage amounts and down payments are found in the FHA loan handbook, HUD 4000.1. The FHA One-Time Close mortgage, also known as a construction-to-permanent loan, lets borrowers apply for a loan to have a home built for them using only a single application, loan approval, and closing date. HUD 4000.1 describes it as follows: “A Construction to Permanent Mortgage combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close / Single-Close Construction Loan Maximum Loan Amount Rules Maximum mortgage amounts for FHA One Time Close loans are determined “by using the | more...

February 1, 2018

Things You Should Know About FHA Home Loans

By Joe Wallace

There are many things you should know about FHA loans before you start the application process; myths and half-understood features of this home loan program still confuse some applicants going into the process. What follows should help you better understand the basics of the FHA home loan program. FHA Loans Are Not Just For First-Time Home Buyers There is no restriction on FHA loans for those who have purchased a home before. There are no separate terms, qualifications, or other rules for those who have purchased before. All FHA loan applicants who are financially qualified are welcome to apply. FHA Loans Are Available For Condos, Mobile Homes, and Mixed-Use Properties Suburban homes are just one of the types of property you can buy with an FHA mortgage. You can purchase | more...

January 30, 2018

Who Can Legally Sign My FHA Home Loan Documents?

By Bruce Reichstein

Who can legally sign my FHA home loan documents? That may seem like an obvious question to some, but there are circumstances where the borrower themselves may be unable to sign the paperwork to complete the loan transaction. What options do borrowers have in these situations when applying for an FHA mortgage, refinance loan, or reverse mortgage? FHA Loan Rules For Signatures: The Basics The rules covering a borrower’s legally binding signature on loan documents used to process FHA home loans can be found in HUD 4000.1, which begins by stating: “All Borrowers must sign and date the initial and final Fannie Mae Form 1003/Freddie Mac Form 65, Uniform Residential Loan Application (URLA). All Borrowers must sign and date page two of the initial form HUD-92900-A, HUD/VA Addendum to Uniform | more...

January 29, 2018

What You Need To Know About FHA Home Loan Appraisals

By Joe Wallace

What you need to know about FHA home loan appraisals includes the difference between an appraisal and an inspection, and what the appraiser looks for when spotting defective conditions and why. The most important thing to know overall about an FHA home loan appraisal is that the appraisal is not a tool for the borrower to use to determine whether the house is suitable; the appraisal is a tool for the lender to establish the fair market value of the home. Do not rely on the appraisal to tell you the home is in acceptable condition, it was not designed to do this no matter how it may seem from the appraisal report. The borrower-arranged home inspection is the best way to “test drive” a home to see if it | more...

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

January 29, 2018

FHA One-Time Close Construction Loans: Down Payments and Interest Rates

By Bruce Reichstein

FHA One-Time Close / Single-Close construction loans have different requirements for down payments and interest rate issues can be more complex; many borrowers are interested in this home loan but aren’t clear on the finer points. Today we examine how down payment issues and interest rate rules apply to the FHA One-Time Close construction loan. The FHA loan handbook, HUD 4000.1 describes the One-Time Close loan, also known as an FHA construction-to-permanent mortgage, as a loan that “…combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close Construction Loan Down Payment Rules HUD 4000.1 allows for some unique down payment sources | more...

January 26, 2018

HUD Announces Major Review Of Manufactured Housing Rules

By Joe Wallace

The Department of Housing and Urban Development has issued a press release announcing a major review of manufactured housing rules. According to the HUD official site, the agency is in the public comment period prior to “a top-to-bottom review of its manufactured housing rules as part of a broader effort to identify regulations that may be ineffective, overly burdensome, or excessively costly given the critical need for affordable housing.” For the next 30 days, the agency says it will accept public comments “to identify existing or planned manufactured housing regulatory actions to assess their actual and potential compliance costs and whether those costs are justified against the backdrop of the nation’s shortage of affordable housing”. General changes in manufactured housing regulations may not seem to have anything to do with | more...

January 25, 2018

FHA Loan Options For New Construction Homes: FHA One-Time Close Mortgages And More

By Bruce Reichstein

FHA loan options for buying new construction homes include the FHA One-Time Close / Single-Close Construction Mortgage, which allows a borrower to apply once and have a single closing date for a house built from the ground up. FHA One-Time Close mortgages differ from other construction loans because this type of construction loan eliminates the two-step construction loan application process where the borrower applies once for the costs of construction, and has a closing date for that loan, then applies a second time for the mortgage on the property itself. It’s definitely an advantage to have a single application and closing date. But what are the other options to compare this type of loan to? It’s good to know what you can get from multiple options-making an informed choice to | more...

January 25, 2018

FHA Loan Options For Buying A Home

By Joe Wallace

FHA loan options for buying a home include choices on the housing type you need, the type of home loan you need, and sometimes even the circumstances of the purchase, in the case of people who are buying homes in federally declared disaster areas. Do you know what your new purchase FHA home loan options are? FHA Loans Available For Many Types Of Homes FHA home loans can be used to purchase property that will be owner-occupied residences, but the home can have as many as four living units. That means the borrower has the option to rent out unused living units if she chooses. Owner occupancy is a condition of loan approval, so you can’t use an FHA loan to purchase an investment property (one you intend to rent | more...

January 24, 2018

FHA Loan Rules: Late Or Missed Housing Payments

By Joe Wallace

Many readers contact us asking about the FHA loan rules for late or missed housing payments. These questions aren’t usually along the lines of “what happens if I am late making my FHA mortgage loan payment”, but rather how a participating FHA lender will view late or missed housing payments when it comes time to approve or deny the mortgage loan application. FHA loan rules governing the lender’s loan approval process are found in the FHA Single Family Loan Handbook, HUD 4000.1. These instructions to the lender aren’t the only rules that may affect your transaction; lender standards and state/federal laws will also apply. But the basic guidelines for the FHA home loan approval process give the lender specific instructions for FHA loan minimum requirements, and that will be the | more...