Articles Published in: 2019

August 30, 2019

HUD Announces Expanded Disaster Relief Options

The FHA and HUD have announced expanded disaster relief measures for those in federally declared major disaster areas. The changes (see below) must be implemented no later than November 30, 2019 but may be used by lenders right away. The FHA and HUD advise these changes will be reflected in a pending update of the FHA Single-Family Loan Handbook, HUD 4000.1. On Thursday, August 29, 2019, the Federal Housing Administration announced in a press release that the agency is, “expanding its foreclosure prevention options to allow borrowers in Presidentially Declared Major Disaster Areas (PDMDAs) with delinquent FHA-insured mortgages to bring their mortgages current without increasing their interest rates or principal and interest payments.” This is an expansion/enhancement of a temporary measure announced in 2018; Mortgagee Letter 2018-01 “temporarily amended” FHA/HUD | more...

August 29, 2019

FHA Home Loans For Manufactured Homes

By Joe Wallace

Many borrowers want to know if there are FHA home loans for manufactured homes, modular homes, or mobile homes. The short answer is yes, there are, but the FHA home loan program does feature some rules you should know before deciding on the right manufactured home for you. FHA Loan Rules For Manufactured Homes: Permanent Foundation Required FHA mortgage loan rules for manufactured housing (located in HUD 4000.1) include a requirement that the property is or will become attached to a permanent foundation that meets federal and state requirements. FHA home loans cannot be made for any mobile home that cannot or will not be attached to a permanent foundation and FHA mortgages cannot be approved for recreational vehicles or houseboats. Manufactured Home Age Requirements Mobile homes and manufactured homes | more...

August 27, 2019

Issues That Affect FHA Home Loan Approval

By Joe Wallace

There are some issues that can affect FHA home loan approval but don’t automatically mean the loan will be denied. Borrowers should be aware of the rules in the FHA single-family home loan handbook, HUD 4000.1 that tell a lender when more attention is needed for a specific loan application. For example, did you know there are two basic types of home loan approval processes? One is a more automated process that happens when the lender uses the Automated Underwriting System (AUS) to review the loan. AUS can be used for borrowers that don’t have certain complications with the loan; borrowers that do have certain issues with their application may find the lender is required to “downgrade” to a “manual” underwriting process that requires more scrutiny on the borrower’s financial | more...

August 26, 2019

FHA Loan Appraisals: Different Rules For Different Homes

By Bruce Reichstein

FHA loan appraisals have different standards depending on the type of property you wish to buy. That doesn’t mean that some homes get favorable treatment in the appraisal process than others. What it does mean is that some properties have unique issues. For example, an appraisal for an FHA condo won’t be the same as for a manufactured home. One reason? Manufactured homes do not start off with permanent foundations, and having one is a requirement. A condo unit does not face such problems, so there is a specific appraisal requirement for manufactured housing that such homes be affixed to a permanent foundation that meets FHA and federal standards. A condo unit is already on a foundation, so the requirements there have more to do with the state of the | more...

August 23, 2019

FHA Loan Down Payment Rules: When More Is Required

By Joe Wallace

FHA home loan down payment rules allow for a low 3.5% down for borrowers who qualify with FICO scores in the 580-or-above category. FHA loan minimums do not address lender standards, which may be higher, but that is one reason why it’s important to shop around for the right FHA lender. The low FHA loan down payment is one reason why FHA mortgages can be so attractive, especially for first-time home buyers. But when will a borrower be required to put a higher amount down on the mortgage? There are several instances to be mindful of. FHA Loan Transactions That Require 15% Down: Identity Of Interest The FHA Single Family Loan Handbook, HUD 4000.1, says there are circumstances where 15% down is required; often when there is an identity of | more...

August 22, 2019

FHA Home Loans And Interest Rates: What You Should Know About Low Rates

By Bruce Reichstein

At the time of this writing, what you should know about FHA Home loan interest rates includes the idea that interest rates at the moment are low for FHA mortgages, that the rates are subject to change, and that your credit report will play an important part in the rate you are offered. What do you need to know about FHA home loan interest rates in today’s housing market? FHA Loan Interest Rates Are Currently Very Low Some market watchers are quoting rates as low as 3.25%, and while that mortgage rate assumes a very well-qualified borrower, it is an indication of how low rates have gone in 2019. What’s good for the economy is often bad for mortgage loan interest rates, and the reverse can also be true. With | more...

August 21, 2019

FHA Home Loans And The Biggest Credit Mistake You Can Make

By Joe Wallace

In this space, we discuss FHA home loans and how they get approved. And we talk a lot about the biggest credit mistake you can make leading up to your home loan application-missed payments. And we’re not just talking about missed payments on one type of credit, we discuss the effects of missing a payment no matter what it is or how important to your financial bottom line. But it is human nature to forget good advice when you only get it from one source, which is why we’re turning our attention today to the advice of one of the three biggest credit reporting agencies in existence: Experian. Experian is 125 years old and has a lot to say about how to manage credit, improve credit ratings, and how credit | more...

August 20, 2019

FHA Home Loans, Down Payments, And More: What You Need To Know Today

By Bruce Reichstein

First-time borrowers have many questions about the FHA home loan process including the subjects of down payments, seller contributions, and down payment assistance. Borrowers need to know that there are certain federal laws that require FHA home loans to limit the contribution of any third party with a financial stake in the outcome of the mortgage, and it’s good to know how these rules work. Seller Contributions Versus Seller Downpayment Assistance FHA loan rules state clearly that the seller of the home may not contribute funds toward the borrower’s down payment. This is expressly forbidden in the FHA loan rulebook, HUD 4000.1. However, sellers are permitted to contribute toward the borrower’s closing costs, capped at a maximum of six percent of the adjusted price of the property. Contributions in excess | more...

August 19, 2019

How Job Changes Affect Your Mortgage Loan Application

By Joe Wallace

How do job changes affect your FHA mortgage loan application and chances for loan approval? Many first-time borrowers need to know this due to personal circumstances; it’s true that FHA home loan rules require the lender to verify two years of employment and it’s also true that an FHA borrower does not have to be with the same employer for two full years to be considered for an FHA mortgage. But what are the consequences of a job change in the FHA home loan process or immediately before a home loan application? If the job change is an upwardly mobile move that benefits the borrower and still meets FHA loan income requirements (for stability and the likelihood of the job to continue) there should be little to no negative effect | more...

August 16, 2019

The New FHA Condo Rules

By Joe Wallace

The Department of Housing and Urban Development official site announced new FHA condo loan rules in August 2019 that make it easier to purchase a condo unit, especially for condo projects not added to the FHA approved list. October 15, 2019 is the start date for the new rules that allow FHA loan approval for mortgages to buy condo units in projects that are not on the FHA approved list. Not all condo units are eligible for this consideration, and the FHA and HUD have issued a list of “single unit approval” requirements that include the following as described on the HUD official site: The individual condominium unit must be located in a completed project that is not FHA-approved; Condo projects that have 10 or more units are limited to | more...