Articles Published in: 2019

If Your Home Was Damaged In A Federally Declared Disaster Area

April 19, 2019

The Two FHA Loan Rehab Mortgages

There is a kind of FHA mortgage that first-time home buyers and experienced home owners alike can apply for that will allow the purchase or refinance of a piece of owner-occupied real estate and provide funds for repairs and renovations. The loan comes in two forms, as mentioned above; one for a new purchase and one to refinance an existing mortgage. The FHA 203(k) Rehabilitation Mortgage and the FHA 203(k) Refinance loan offer a range of possibilities for those who wish to buy a fixer-upper house or renovate their existing property. FHA loan rules in HUD 4000.1 describe these loans as follows: The Section 203(k) Rehabilitation Mortgage Insurance is used to: Rehabilitate an existing one- to four-unit Structure, which will be used primarily for residential purposes; Rehabilitate such a Structure | more...

April 18, 2019

Home Flipping And FHA Mortgage Loans: The Rules

By Bruce Reichstein

A 2019 CoreLogic report states that home flipping, the process of purchasing, renovating, and putting a house back on the market in a short period of time and often at a substantial markup, is at its highest levels in about eight years. The CoreLogic report states, “…since the Great Recession, flippers have been increasingly good at acquiring properties at a discount, either because the properties were legally, financially or physically distressed”. Some borrowers may be tempted to flip homes, and others may wish to purchase a flipped home. What does the FHA home loan program’s rulebook say about this practice? HUD 4000.1 states that “eligibility of a Property for a Mortgage insured by FHA is determined by the time that has elapsed between the date the seller has acquired title | more...

April 17, 2019

Can I Buy A Home With An FHA Mortgage After Foreclosure?

By Joe Wallace

After a major negative credit event like a foreclosure, some home owners assume they may never be able to get a lender to take them seriously for a home loan ever again. Is this true? At first glance, FHA home loan rules in HUD 4000.1 might lead a potential borrower to think that it is. “A Borrower is generally not eligible for a new FHA-insured Mortgage if the Borrower had a foreclosure or a DIL of foreclosure in the three-year period prior to the date of case number assignment.” The abbreviation DIL stands for deed-in-lieu of foreclosure. Note that the above does NOT say the borrower can NEVER get a home loan again. There is a three-year waiting period required but it IS possible. And later in HUD 4000.1, we | more...

April 16, 2019

FHA Mortgage Loan Interest Rates

By Bruce Reichstein

What do you need to know about FHA home loan interest rates? You may find certain finance blogs discussing home loan rates in general, or those that make blanket statements about mortgage rates. What’s the reality? One personal finance blog attempts to discuss what controls home loan interest rates and what does not; the publication discusses the fact that things like the 10-year Treasury not doesn’t control interest rates. Which is true. There is no **control**. But these publications forget to mention that investor activity in the Treasury market can INFLUENCE rates depending on circumstances. The same publication states very boldly that the Fed does not control mortgage loan interest rates either. And it’s true that the Fed does not have any day-to-day control over mortgage loan rates. But Fed | more...

April 15, 2019

FHA Mortgage Insurance Refunds

By Joe Wallace

FHA home loans do not, as conventional mortgages often do (based on LTV), require third-party private mortgage insurance, sometimes known as PMI. Instead, FHA mortgages require mortgage insurance premiums paid as part of your monthly mortgage payment. There is an Up-Front Mortgage Insurance Premium (UFMIP) that is due at closing time in cash, which may also be financed in its’ entirety should the borrower wish to do so. Then the Mortgage Insurance Premiums (MIP) are included in the monthly payment. FHA home loan rules address mortgage insurance issues in HUD 4000.1, which states, “Most FHA mortgage insurance programs require the payment of UFMIP, which may be financed into the Mortgage. The UFMIP is not considered when calculating the area-based Nationwide Mortgage Limits and LTV limits.” That means your loan limit | more...

April 14, 2019

HUD Announces Findings In Illinois Housing Fraud Investigation

By Bruce Reichstein

The Department of Housing and Urban Development has announced its’ findings related to the investigation of allegations of housing fraud by a Cook County couple. According to a press release by HUD, “… a Cook County, Illinois couple committed fraud by accepting housing assistance they were not qualified to receive in order to rent a property they jointly owned.” HUD had conducted an investigation into a married couple’s attempts to get rental assistance for a property they own in Matteson, Illinois. HUD alleges that in 2006 the couple, Korey Sloan and Christie Caldwell, and their four children “sought rental assistance from the Housing Authority of Cook County (HACC) to lease the home from Sloan, who posed as an unrelated landlord”. HUD further states that Caldwell “denied any relationship” with Sloan | more...

April 12, 2019

HUD Announces Disaster Relief For Iowa and Nebraska Storm Victims

By Joe Wallace

The Department of Housing and Urban Development recently announced disaster relief for victims of storms in Nebraska and Iowa. The agency issued press release stating it would “speed federal disaster assistance “to the State of Iowa and the State of Nebraska to offer “support to homeowners and low-income renters forced from their homes in areas affected by severe storms and flooding”. In March, there was a declaration of a major disaster area for Iowa counties including Fremont, Harrison, Mills, Monona, and Woodbury. There was also a major disaster declaration in March for Nebraska counties including Boone, Buffalo, Butler, Cass, Colfax, Custer, Dodge, Douglas, Knox, Nemaha, Richardson, Santee Indian Reservation, Sarpy, Saunders, Thurston, and Washington. These declarations allow HUD to offer FHA borrowers in the affected areas foreclosure relief in the | more...

April 11, 2019

First-Time Refinance Advice

By Bruce Reichstein

Buying your first home with an FHA loan means, for some borrowers, the need to think about a first-time refinance later down the line. What do first-time home owners need to know about refinance loans and their FHA loan options? Decide Ahead Of Time On Your Goals For The Refinance Loan FHA refinance loans can help you do a number of things depending on the need for the loan. For example, you may wish to do repairs or upgrades in the home, and for that purpose an FHA 203(k) rehabilitation loan is an excellent option to pursue. Rehab loans allow you to simultaneously refinance and repair or upgrade the house with approved projects, but if you are looking for cash back to use in any way you see fit, the | more...

April 10, 2019

FHA Loans After Bankruptcy

By Joe Wallace

Yes, it is possible to get a home loan following a bankruptcy with an FHA mortgage loan. Some borrowers, including first-time home buyers, assume that after a Chapter 7 or Chapter 13 bankruptcy filing that it is impossible to get a new home loan. Others assume you must wait seven years or longer to apply for a new home loan. What’s the reality? Chapter 7 and Chapter 13 Bankruptcy The most important thing about getting a new loan after bankruptcy is when you apply, and following that the most important issues include whether or not your bankruptcy has been discharged or not. FHA home loans are possible but only after the bankruptcy has been discharged, not after they have been initially filed. The FHA Home Loan Seasoning Period After a | more...

April 9, 2019

Different Types Of FHA Home Loans For First-Time Buyers

By Bruce Reichstein

There are many different choices for home loans, and first-time home buyers should know their options before they decide on which loan to apply for. Do you know the difference between a rehab loan and a construction mortgage? Or a condo loan versus a mobile home loan? FHA One-Time Close Construction Mortgages These loans, also known as FHA Construction-to-Permanent loans, offer a single loan and closing date for borrowers who want to have a house built for them rather than buying an existing property. FHA construction loans can be more complex that loans for existing real estate but for many the additional effort is worth it to have a home that is built especially for them. First time home buyers can apply for these loans the same as any other | more...