Articles Published in: 2022

July 14, 2022

HUD Announces Appraisal Update

The Department of Housing and Urban Development official site contains an FHA Mortgagee Letter published on July 12, 2022, which announces an important update to FHA appraisal policy. FHA loan rules as published in HUD 4000.1, include a maximum age for an appraisal. If an appraisal is about to expire, FHA rules permit an extension of the appraisal validity period for 30 additional days. In some cases, an appraisal update may be permitted but that update must typically be accomplished before the original appraisal expires. Now, FHA appraisal guidelines have been revised to expand the appraisal validity period, which the FHA and HUD say will reduce “financial burdens” of getting appraisal updates. The changes are also meant to help the agency “more closely align” the FHA loan program’s initial appraisal | more...

July 13, 2022

FHA Home Loans and Help With Down Payments

By Joe Wallace

First-time home buyers looking for real estate to buy with an FHA loan may be intimidated by the notion of saving up for and making any kind of down payment, let alone a percentage of the appraised value of the home. But it’s important to remember that borrowers have options with FHA mortgage loans that can help offset the down payment. Did you know that just over a quarter of all FHA loans at one time featured parental contributions toward the down payment? That information is according to the Wall Street Journal, which reports some 26% of the FHA loan transactions included financial help from parents–WSJ calls it “The Bank Of Mom And Dad” and it can be a powerful factor in buying a first home. But some first-time home | more...

July 12, 2022

FHA Loan Rules For Self-Employed Borrowers

By Joe Wallace

What do self-employed house hunters need to know about the home loan approval rules applicable to self-employment income? If you are not sure how your FHA lender will qualify you based on your income, keep reading–there are some important facts you will need to know before you fill out FHA loan paperwork. The first thing to know is how the FHA defines “self-employment” and why. The lender is required to ensure your income is stable and reliable and that you will continue to earn that income to help pay for your mortgage. The FHA has different qualification rules for self-employment income; you are basically required to show two years of self-employed income in a similar line of work to your salary, commission, or hourly income when you were not self-employed. | more...

July 11, 2022

FHA Adds New Income Flexibility Guidelines For FHA Borrowers Affected By COVID-19

By Joe Wallace

During the global COVID-19 pandemic, many house hunters experienced a loss of income because of coronavirus-related employment gaps, job losses, and similar financial hardship. When you are applying for a mortgage loan, late and missed payments can have a negative effect on your ability to find an affordable home loan. There were many forms of relief for COVID-19-related economic hardship, but as the fallout from COVID continues, it’s clear that some additional measures are needed. That’s one likely reason the FHA has announced updated COVID-19 credit qualifying guidelines for borrowers trying to buy a home with an FHA mortgage. In early July 2022 the FHA announced new guidelines for participating FHA lenders. These new guidelines permit more flexibility for the lender when qualifying a borrower who may have income or | more...

July 6, 2022

VA One-Time Close Construction Loan Options for Military Veterans Expanded

By Bruce Reichstein

Some house hunters get fed up with looking for just the right home, while others start out their home loan journey knowing in advance they want a house built for them. What options do these borrowers have? There is an FHA home loan known as the FHA One-Time Close / Single-Close construction loan that lets borrowers apply for a single loan that covers both construction costs and the mortgage itself. The FHA version of this type of construction loan requires the borrower and lender to work together to establish a plan for the project including estimated completion times, interest rates, budgets, and more. Some borrowers aren’t interested in FHA home loans since they have other options; do qualifying military veterans have a VA loan version of the FHA One Time | more...

July 6, 2022

Will My FHA Home Loan Application Be Approved?

By Joe Wallace

Will my FHA home loan be approved? That is a common question for some borrowers who worry that their credit isn’t good enough for a home loan, and for borrowers who may have adverse credit information in their credit history. There is no single answer to this question since much depends on the borrower’s credit history, their patterns of credit use, debt ratios, and other factors. But in general there are some areas you can review to determine whether or not an FHA home loan is in your future. Will My Home Loan Be Approved? Occupancy Matters If you seek an FHA mortgage for a house that you (or at least one borrower obligated on the mortgage) do not intend to occupy as your primary residence, you will not be | more...

July 1, 2022

First-Time Home Buyer Tips

By Bruce Reichstein

What does a first-time home buyer need to know when searching for real estate to buy with an FHA mortgage? It’s good to make a checklist before you start and add to it along the way-there are some important things to do before you ever fill out home loan paperwork. Decide If You Are Going To Use A Real Estate Agent Whether you buy your home with an FHA mortgage or not, this is a choice that could make a difference in terms of saving time looking for just the right home. If you choose to use the services of a real estate agent, be sure to include a list of features you want in your home and features you do not want-the agent will help you narrow the field. | more...

June 30, 2022

FHA Home Equity Loans?

By Joe Wallace

Is there such a thing as an FHA home equity loan? Some borrowers want to tap into the equity built up in their home to pay bills or to make a large purchase, others may want to start home improvement projects. Conventional mortgages often come with the option of applying for a home equity loan or a home equity line of credit. What options exist for FHA borrowers? FHA home loan options don’t include a home equity line of credit or a home equity loan. You won’t find an FHA loan option that mimics these options. What FHA borrowers do have the option to apply for? FHA Cash-Out Refinancing, which allows you to take cash back at closing time if you meet the following requirements in addition to credit qualifications: | more...

June 29, 2022

Finding The Best FHA Lender

By Joe Wallace

Which bank has the best FHA loan options? Experienced borrowers know the answer to this question already; the best FHA lender is the one willing to work with your FICO scores, the type of home loan you need, and offers you the right rates. But if you are asking the question, “Which bank has the best home loan?” you want answers that are more specific. How do you find a lender who can help? If you are searching online, you might try looking for the specific type of home loan you seek. Are you looking for an FHA One-Time Close construction loan? Searching with that specific phrase will help. But it can also pay to search more specifically than that; try looking for “FHA Construction Loans in Texas” in Google. | more...

June 28, 2022

What To Know About FHA Mortgage Insurance

By Joe Wallace

What do you need to know about FHA mortgage insurance? There are basically two payment plans for FHA mortgage insurance premiums; one for 11 years and one for the lifetime of the FHA loan. There is an Up Front Mortgage Insurance Premium you pay at closing time, and then there is the annual mortgage insurance premium split up over the 12 mortgage payments a year you are scheduled to make. FHA Mortgage Insurance: How Long? FHA mortgage insurance is required on most FHA loans. Streamline Refinances and certain other loans like those for homes on Native American tribal lands have a lower rate than for purchase loans and other FHA refinance options. If you pay 10% down on an FHA mortgage you may have the option of ending your FHA | more...