Articles by: Bruce Reichstein

April 25, 2022

Before You Fill Out An FHA Home Loan Application

How can a new borrower prepare for a home loan application? There are some important steps to take and not all of them are as obvious as others. For example, do you know where your down payment money will come from? If you are still trying to figure out how to budget and save for it, you might consider investigating local down payment assistance programs in your area. But there are other things to do before you turn in a home loan application. Check Your Credit Use That’s a no-brainer, right? But there are issues you should consider when examining your credit that may not be so obvious. For example, some first-time homebuyers don’t realize that it’s not just your credit scores, but also your credit utilization that gets scrutinized | more...

April 14, 2022

Are FHA Credit Requirements For Refinancing The Same As Buying A Home?

By Bruce Reichstein

Are FHA credit requirements the same for refinance loans as they are for buying a new home? Many borrowers want to know if their credit scores, payment history, and other factors will be scrutinized as closely when refinancing. FHA loan rules for refinances vary depending on the nature of the new loan. The rules that govern this area are found in HUD 4000.1, the FHA Single-Family Loan handbook, and lender standards may also apply. The credit requirements we’re discussing here are FHA loan minimum standards. To know what a specific financial institution may require above and beyond these standards, you will need to talk to a participating FHA lender.FHA Loan Credit Check Requirements For Cash-Out Refinance Loans FHA loan rules in HUD 4000.1 state that cash-out and the no cash-out | more...

April 7, 2022

What Do FHA Loan Closing Costs Include?

By Bruce Reichstein

What do FHA loan closing costs include? There are certain fees and expenses you will need to save up for during the planning stages of your FHA home loan. They include an up-front mortgage insurance premium, home inspection, appraisal fees, and other costs that add up and you may encounter unexpected costs like a compliance inspection that would come on the heels of the appraisal where repairs or corrections are required. They are not required in all home loan cases (only when deemed necessary as a result of the appraisal), so it’s not an expense you will definitely have to pay. Remember that the less you have included in the loan amount (certain permitted closing costs may be added to the loan) the lower your mortgage payments potentially are. Closing | more...

March 23, 2022

HUD Announces New Fair Housing Initiative

By Bruce Reichstein

The Department of Housing and Urban Development has announced a major effort aimed at reducing violations of the Fair Housing Act in the home loan appraisal process. The agency has submitted a PAVE action plan to President Biden. PAVE is also known as the Interagency Task Force on Property Appraisal and Valuation Equity. This plan is designed to help end what the FHA and HUD describe as “racial bias in the home lending and appraisal process” and is considered by the designers to be one of the most ambitious Fair Housing reforms in this part of the housing industry. PAVE is a multi-agency cooperative effort and includes cabinet-level leadership as well as independent entities. According to the HUD press release, the PAVE task force was announced on June 1, 2021, | more...

March 9, 2022

Your FHA Refinance Loan Options

By Bruce Reichstein

FHA home loans feature a refinance option. There are multiple options to refinance with an FHA mortgage and you can choose to refinance out of a conventional mortgage into an FHA loan, get cash back at closing time, and more. What do you need to know about FHA refinance options? FHA Cash-Out Refinance loans are not the only option to refinance a non-FHA mortgage. You can also apply for a no-cash-out version and get out of your current loan and into a new FHA mortgage. Some choose to do this because they want out of an adjustable-rate mortgage, others choose an FHA loan because they are interested in a lower rate. When you are reviewing your refinance options, it pays to have an idea of your financial goals for the | more...

March 7, 2022

Answers To New House Hunter Questions

By Bruce Reichstein

What does it take to qualify for an FHA mortgage? That’s among the most common questions asked about FHA home loans. What is the answer? There are a variety of factors that go into your loan officer’s decision to approve or deny a home loan. Those factors include the number and amount of your monthly financial obligations, your FICO scores, how well you use the credit you have, and other variables. What credit score do you need to qualify? On paper, FHA loan rules say those with FICO scores in the 580 or above range qualify for the lowest down payment possible for an FHA mortgage (3.5%). Lender standards may require a higher FICO score range. Not all borrowers have the same kind of FICO scores. Some may have thin | more...

February 25, 2022

Down Payment Help For FHA Mortgages

By Bruce Reichstein

Who qualifies to get down payment assistance in order to buy a home? If you are using an FHA mortgage, your downpayment requirement is, at a minimum, 3.5%. And while that isn’t as large a down payment as you would make if you wanted to eliminate private mortgage insurance from a conventional home loan, some may struggle to come up with the money down. Buying a home can be expensive. There are inspection and appraisal fees, there may be pest control services to pay for, title searches, and more. Saving early is the key to making your down payment easier to manage in your budget. But even with saving early, extra help may be needed. That’s where down payment assistance programs can come in to help. But what does it | more...

February 22, 2022

FHA Home Loan Rules And Airbnb

By Bruce Reichstein

Is it possible to buy a home with an FHA loan to use as an Airbnb-type venture? Borrowers are eligible to apply for FHA home loans for up to four-unit residences; what do FHA loan rules say about using the home as a rental space? FHA loan rules governing these situations are found in HUD 4000.1. Borrowers may feel encouraged by the notion that owner-occupied properties with up to four units can by purchased with an FHA mortgage, and even more encouraged that the rules actually do address (and permit) borrowers to rent out the unused living potions. However, renting these units out is also subject to FHA loan rules (in addition to lender requirements and state law). What does HUD 4000.1 say about using spaces in your home purchased | more...

February 16, 2022

The FHA Borrower’s “Secret Weapon” For Closing Costs

By Bruce Reichstein

Do you know about one of the secrets of managing your closing costs for an FHA home loan? We’re talking specifically about seller contributions to your closing costs for your FHA purchase loan–what the seller is permitted to contribute under the rules for your FHA mortgage. Buying a home requires more cash than some borrowers expect–at first. There are appraisals and home inspections to pay for, sometimes a pest inspection may be needed, and you may also have to pay or anticipate paying some taxes, compliance inspection fees, and more. Negotiating with the seller to pay a portion of your closing costs is (believe it or not) fairly common in the mortgage industry. Individual sellers and individual house hunters alike may need some time to get used to this idea | more...

February 10, 2022

HUD Announces Fair Housing Settlement In Las Vegas Discrimination Complaint

By Bruce Reichstein

Fair housing laws are sadly necessary, even in the 21st century. While some may labor under the misguided notion that American society has evolved away from the need for the Fair Housing Act, the Department of Housing and Urban Development continue to investigate Fair Housing Act violations. One of the most recent? HUD announced in February 2022 that a conciliation agreement had been reached the agency and Las Vegas landlords accused of housing discrimination against people with disabilities. According to a HUD press release, the agreement was reached between “Las Vegas landlord, Anwar Malik, and Malik’s property manager, Ahmad Sharif-Yazdi, to resolve allegations of discrimination brought by a prospective tenant with a disability”. The alleged discrimination in this case was a refusal to rent property based on the applicant having | more...