Articles by: Bruce Reichstein

November 22, 2023

Planning A Mortgage: Credit Resources You Need

Are you planning a home loan? Are you in the budgeting and saving stages of your home loan journey? If so, there are some necessary resources you should explore before you apply for an FHA mortgage. It’s important to give yourself enough time to plan and save for your home loan and that includes paying more attention to and working on your credit. Credit resources can be a huge help in this regard–don’t pass on the chance to improve your FICO scores, get your payment history into good shape, and prevent identity theft or other problems from stopping your mortgage loan in its tracks. The first resource you should consider is the offer made by the FHA and HUD to give free referrals to a HUD-approved housing counselor. You can | more...

November 17, 2023

FHA Loan Occupancy Guidelines You Should Know

By Bruce Reichstein

Did you know that occupancy is a requirement when you buy a house with an FHA loan? FHA policy for occupancy requires at least one borrower obligated on the mortgage to take up residence in the home as the primary residence. This must happen within a “reasonable time” of loan closing, normally 60 days, unless you make other arrangements with the loan officer. FHA Loan Occupancy Rules For Single-Family Homes HUD 4000.1 is the FHA Single-Family Lender’s Handbook. In that handbook, you’ll find regulations covering occupancy as a condition of FHA loan approval. You won’t be approved for an FHA mortgage if you aren’t planning to use the home purchased with your loan as your primary address. How Will The FHA Know You Occcupy The Home? Loan officers are busy | more...

October 27, 2023

FHA First Time Home Buyer Loans

By Bruce Reichstein

How can the FHA home loan program help first-time home buyers? Some perks of an FHA mortgage are central to the home loan program itself, while others may be offered by lenders as an incentive to use that financial institution for your FHA home loan. FHA Home Loans For First-Time Buyers: Low Down Payments The FHA home loan program requires only 3.5% minimum for borrowers with qualifying FICO scores. FHA loan requirements say FICO scores as low as 580 can technically qualify for the lowest down payment, but you will need to check with a participating lender to see what standards may apply above the FHA minimums. Those with credit scores lower than 580 may still technically qualify for an FHA mortgage loan but at a higher down payment. FHA | more...

October 20, 2023

FHA Refinance Loans For Home Improvements

By Bruce Reichstein

FHA refinance loan options include the ability to apply for a refi loan to do home improvements–a very important option for those with existing FHA mortgages or non-FHA loans alike. That said, home loan interest rates are higher than they’ve been in a while at publication time and many think refinancing today isn’t a great option. But what about when interest rates and the economy in general begin to improve? You may not be considering a refinance loan today, but when mortgage rates begin to fall, the option becomes more viable for many. How can FHA refinance loans help a borrower make upgrades or improvements when the time is right? There’s more than one way to approach the refinance loan question if you want a refi AND funds to perform | more...

October 10, 2023

Common FHA Home Loan Questions

By Bruce Reichstein

Got questions about the FHA home loan journey? You are not alone. Many first-timers and experienced house hunters have questions about FHA mortgages. Here are some of the most popular. When reviewing these answers, don’t forget that some issues related to FHA loan approval are circumstantial. Your loan application is typically handled on a case-by-case basis, so it’s smart to assume your circumstances may be unique depending on what the issue is. It always helps to talk to a participating FHA lender. How Much Do I Need To Save For An FHA Home Loan? Expect a downpayment minimum of 3.5% of the sale price of the home. You should also expect to save between 2% and 6% of the total loan amount for closing costs. If you want to know | more...

FHA Home Loans And The Biggest Credit Mistake You Can Make

September 18, 2023

No Down Payment FHA Loans?

By Bruce Reichstein

Are there no down payment FHA loans? Some borrowers feel the pinch when trying to save up for closing costs, inspections, and the required minimum investment FHA loan guidelines say are mandatory for most FHA loans. They often wonder if there is a no-downpayment option when applying for an FHA mortgage. Making a down payment is an important and mandatory part of the FHA loan process, and you won’t be allowed to sidestep this requirement. That said, there is an exception for FHA 203(h) rehabilitation mortgages, but those are reserved for victims of natural disasters in federally declared disaster areas. Why do some people mistakenly believe FHA home loans are available for no money down? Partially because they are mistaking FHA loans for the VA home loan program, which offers | more...

September 15, 2023

What You Should Know About FHA Energy Efficient Mortgages

By Bruce Reichstein

The FHA Energy Efficient Mortgage (EEM) loan program was started back in 1992 as a pilot program in five states. A few years later, the program was expanded nationwide. According to the FHA official site: “EEM is one of many FHA programs that insure mortgage loans–and thus encourage lenders to make mortgage credit available to borrowers who would not otherwise qualify for conventional loans on affordable terms (such as first-time homebuyers) and to residents of disadvantaged neighborhoods (where mortgages may be hard to get).” Borrowers who use FHA loans can add the required FHA upfront mortgage insurance premium to their home loan or pay in cash at closing. There is a monthly premium paid as part of the monthly mortgage payment. The FHA EEM is an add-on to a standard | more...

August 31, 2023

FHA Home Loan Rules And Fair Housing Laws

By Bruce Reichstein

We report on Fair Housing cases from time to time, a reminder to those looking for housing that there are federal laws that protect against discrimination in housing. But what are the FHA home loan rules in this area? Did you know that the FHA loan program has specific instructions to the lender regarding Fair Housing laws? Those instructions are found in HUD 4000.1, the FHA Single-Family Home Loan Handbook. Page 120 of that handbook instructs the lender, “The Mortgagee is required to comply with all federal, state and local laws, rules, and requirements applicable to the mortgage transaction, including all applicable disclosure requirements and the requirements of the Consumer Financial Protection Bureau (CFPB), including those related to: The Fair Housing Act protects both renters and home loan applicants looking | more...

August 22, 2023

How Much Will My FHA Appraisal Cost?

By Bruce Reichstein

How much does an FHA appraisal cost? This is a common question, most often asked in conjunction with whether or not the FHA regulates this expense as part of the FHA home loan process. The Cost Of FHA Appraisals And Home Inspections The first thing to remember when budgeting for an FHA appraisal is that you must also set aside money for a home inspection. You should never rely on the appraisal alone to determine whether the home, condo unit, or mobile home or modular home is suitable to purchase. The FHA appraisal costs money, and the home inspection costs money too. Borrowers who balk at paying “twice” for a service that is mistakenly viewed as nearly identical (appraisals are NOT identical to inspections) should know that paying hundreds for | more...

July 28, 2023

FHA Rehab Loans Versus FHA 203(b) Loans

By Bruce Reichstein

When shopping for real estate, most borrowers are thinking of the kind of mortgage such as the one known as an FHA 203(b). That’s the loan you want when shopping for a house you want to buy as-is; one that meets FHA appraisal standards and requires little to no work on the property to make it eligible for a 203(b) forward mortgage. Then there is another type of home loan option available to FHA borrowers; the FHA 203(k) rehabilitation mortgage, which allows you to buy a fixer-upper and have it brought up to FHA appraisal standards and local code requirements. The FHA 203(k) rehab loan is suitable for both new purchase and refinance applications. Regardless of whether you buy or refinance with an FHA Rehab Loan, you are permitted to | more...