Articles Published in: June 2019

June 30, 2019

Five FHA Loan Tips About Condo Loans

Some borrowers, especially first-time home buyers, are surprised to learn that FHA loan options include loans to purchase condo units in FHA-approved condo projects. 5. FHA Condo Loans Are For Condos On The FHA Approved List Whether the condo you want to buy a unit in is already on the approved list, or needs to be added to it, the FHA condo loan is available to financially-qualified borrowers who have never owned a home before or are coming back to apply for a new home loan after purchasing in the past. Borrowers who need to have a condo project added to the FHA list will be required to work with a participating FHA lenders who can apply to have the condo project added to it. But there is one important | more...

June 28, 2019

FHA Home Loan Rules For Refinance Loans

By Bruce Reichstein

When headlines about home loan interest rates start appearing with the terms “new lows” or “lowest in months”, the minds of many home owners turn to refinancing. It’s very tempting to explore refinance loan options when rates begin falling; saving more money over the lifetime of the refinance loan is appealing and some borrowers feel they didn’t shop around aggressively enough for a better interest rate the first time around. When you are getting ready to refinance, what do you need to keep in mind in terms of FHA refi loan rules? Here are some areas to ponder. Basic Refinance Loan Transactions FHA refi loans come in a few basic types according to the FHA Lender’s Handbook, HUD 4000.1: Cash-out refinances: designed to pull equity out of the Property. No | more...

June 27, 2019

You Are Not Ready For An FHA Home Loan If…

By Joe Wallace

How do you know you are truly ready for a home loan? There are many things to consider, including your finances, credit, and employment history. But there are other factors, too. You Are Not Ready For An FHA Mortgage If You Don’t Know How Much You Can Afford To Pay Each Month Do you know how much you can afford in a monthly mortgage payment? Don’t forget that calculating your payment isn’t as simple as doing the math on the sale price of the home compared to the length of the mortgage plus interest. You will also have to figure in property taxes, any applicable homeowners or condo owners association fees, mortgage insurance premiums, and other factors. Do not overlook these expenses when doing the mortgage math! You Are Not | more...

June 26, 2019

Who Can Apply For An FHA Reverse Mortgage?

By Bruce Reichstein

Borrowers who want to pull cash out of their home, converting value into cash back, have two basic options with an FHA-guaranteed loan. One of those options is the FHA Reverse Mortgage, also known as a Home Equity Conversion Mortgage. This is for borrowers who either own the home or are very close to paying off the mortgage loan on the property. FHA HECM mortgages allow for cash back with no monthly payments required since the loan is paid off when the borrower dies, or sells the property. Does this sound like an option you would like to explore? There is one very important caveat with FHA Reverse Mortgages-they are not available to borrowers under the qualifying age, which is 62 or older. That is why your lender may try | more...

June 25, 2019

HUD Brings Fair Housing Act Charges Against Minnesota Landlords

By Joe Wallace

Housing discrimination can affect potential borrowers and renters at any stage in the house-hunting or home seeking process. Discrimination in rental housing can negatively affect the attempt to find and buy a home in cases where the victim needs to rent a unit while still looking for a house to purchase with a mortgage loan. Housing discrimination of any kind whether in renting or buying is prohibited by federal law. The Department of Housing and Urban Development recently announced charges against Minneapolis landlords in a Fair Housing Act case involving a rental unit denied to tenants over reasonable accommodation issues. The HUD official site published a press release alleging that the owners “refused to allow a single mother to live with an assistance animal, a cat, for her oldest daughter, | more...

What Credit Score Is Needed For An FHA Mortgage?

June 24, 2019

Five Tips For FHA One-Time Close Mortgages

By Joe Wallace

One-Time Close Construction Loans May Take Longer To Close Than A Purchase Loan For Existing Construction You should discuss the amount of time your FHA OTC loan might take with the seller of the land if you are purchasing land and building the home. Timelines may be very important depending on circumstances. Find out how long the loan may take to close in your area and discuss this with the seller to see if the time frame is acceptable. Contractors For One-Time Close Construction Loans / Single-Close Construction Loans FHA construction loans include certain lender requirements that can vary depending on the lender. Borrowers should anticipate having to hire an outside contractor rather than trying to do the work personally. The builder and borrower will have to work together to | more...

June 24, 2019

FHA Appraisal Standards: What You Need To Know

By Bruce Reichstein

A recent press release by HUD applauds new lead paint hazard requirements issued by the Environmental Protection Agency. Those standards include a more strict requirement for lead levels in certain homes and “child-occupied facilities”. According to a press release on the HUD official site, “Since the 1970s, the United States has made tremendous progress in lowering children’s blood lead levels. In 2001, EPA set standards for lead in dust for floors and windowsills in housing, however since that time, the best available science has evolved to indicate human health effects at lower blood lead levels than previously analyzed.” The new rules don’t necessarily affect FHA appraisal guidelines with specific changes-FHA loan rules address lead paint issues, generally requiring abatement of lead-based paint in homes older than 1978 where there is | more...

June 23, 2019

Can I Buy Investment Real Estate With An FHA Mortgage?

By Joe Wallace

This is a question on the minds of many and the issue definitely has some nuances. The FHA lender’s handbook HUD 4000.1 states “Investment Properties are not eligible for FHA insurance.” But what is the FHA definition of an investment property and how flexible are these guidelines? To understand what constitutes an investment property, we have to examine what the FHA considers as an acceptable purchase and what is considered an investment property. FHA mortgages are intended for owner-occupiers. At least one borrower obligated on the mortgage must live in the home as the principal residence. FHA loan rules require this to happen “within a reasonable time” after the loan closes and that time is often considered 60 days unless other arrangements are made. FHA loan rules do permit, if | more...

June 21, 2019

FHA Home Loan Mortgage Rates

By Joe Wallace

Just as we headed into 2019, the FHA and HUD announced higher FHA loan guaranty limits for the new year, giving most counties a boost in the dollar amount the FHA would back for an FHA mortgage loan. Now, as we read headlines from reputable sources including Marketwatch, about home loan interest rates, it seems like now is a very good time to be a first-time home buyer or a repeat borrower looking to purchase or refinance residential property with an FHA mortgage. One recent Marketwatch article about home loan interest rates includes the blurb. “Rates for home loans were mixed, but stayed near recent lows, even as bond market moves suggest another big step down lies ahead. “ That is according to Andrea Riquier’s June 20th article titled, “Mortgage | more...

June 20, 2019

FHA Construction Loan Facts

By Bruce Reichstein

Some borrowers, including some first-time home buyers, don’t want to buy someone else’s house. They prefer a home built to suit; real estate built from the ground up using borrower-approved plans. This kind of home loan is available as an FHA mortgage from participating FHA lenders. It is called an FHA One-Time Close construction loan and it is an excellent alternative to buying an existing construction house. What do you need to know about FHA One-Time Close Construction Loans? For starters, these loans do not have a different down payment requirement than other FHA mortgages-the same low down payment options exist for borrowers with qualifying FICO scores. Your lowest possible down payment on a home built using an FHA construction loan is the same 3.5% as other FHA mortgage options. | more...