Articles by: Bruce Reichstein

March 2, 2023

Myths About FHA Refinance Loans

There are plenty of misconceptions about refinancing real estate. If you have a house you want to refinance, it’s good to learn what you can and cannot do with an FHA refinance loan before you start shopping around for a lender. And you WILL want to shop around. FHA Refinance Loan Myths: You Have To Keep Your Original Lender You can refinance your home with another lender offering more competitive terms, rates, or perks for borrowing with that financial institution. FHA Refi Loan Myths: You Have To Refinance Into A Fixed-Rate Mortgage Borrowers can choose an FHA Adjustable Rate Mortgage (ARM) at refinance time if the lender offers such a loan. Not all participating lenders will, which is another reason to shop for the right lender. Refinancing an ARM into | more...

February 26, 2023

Can I Do My Own Contracting Work With An FHA One-Time Close Construction Loan?

By Bruce Reichstein

When applying for an FHA One-Time Close / Single-Close construction loan to have a house built from the ground up, some borrowers want to know if the FHA construction loan program will permit the borrower to act as her own contractor. FHA loan rules found in HUD 4000.1 would seem to make this question fairly easy to answer, but look beyond this quote from the FHA home loan rulebook-this isn’t the only rule that governs the FHA construction loan process: “The Borrower must have contracted with a builder to construct the improvements. The builder must be a licensed general contractor. While the FHA guidelines state “The Borrower may act as the general contractor, only if the Borrower is also a licensed general contractor,” the FHA lender can choose not to | more...

February 24, 2023

What Credit Score Is Needed For An FHA Mortgage?

By Bruce Reichstein

What is the minimum credit score required to get approved for an FHA mortgage loan? Readers ask questions about this issue all the time, sending in questions asking if it is possible to still get an FHA mortgage with a low credit score. FHA loan rules establish a minimum credit score for loan eligibility but lender standards also apply so this is a harder question to answer than you might think. What is best in these situations is to know that FHA loan rules are the baseline, the minimum. The lender’s requirements are also applicable so you will need to discuss what FICO scores qualify. In general, FHA loan rules in the FHA lender’s handbook say FHA borrowers with credit scores at 580 or higher are eligible for maximum financing | more...

February 1, 2023

FHA Home Loan Myths Explained

By Bruce Reichstein

There are plenty of myths about FHA home loans. For example, some people STILL believe the FHA home loan program is a need-based mortgage loan offered only to low-income house hunters. This is not true–any financially qualified borrower can apply for an FHA mortgage. There are no income caps or need-based requirements for FHA loan approval. But that’s just the tip of the iceberg. FHA home loans can be used to buy certain property types including condo units and mobile homes. FHA home loans can even be used to have a house built on your own land with a low 3.5% down payment. FHA Loan Myths: First-Time Home Buyers You do NOT have to be a first-time homebuyer to qualify for an FHA mortgage. You can be an experienced homeowner, | more...

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

January 25, 2023

Are You Ready For An FHA Loan Application?

By Bruce Reichstein

Are you ready for an FHA mortgage loan? Buying or refinancing a home with an FHA loan takes planning and preparation, but once you’ve put the time in and gather your information, budget for expenses, and check your credit, the process will be far more understandable and accessible. Are You Ready For An FHA Mortgage Loan Application? You may be ready to fill out your FHA mortgage loan or refinance loan application if you have spent the last year reviewing your credit reports, working on reducing your debt-to-income ratio, and have made sure to have 12 months of on-time payments on ALL financial responsibilities. You are ready to apply if you know what kind of home loan you need and how it will be used. For example, are you interested | more...

If Your Home Was Damaged In A Federally Declared Disaster Area

January 23, 2023

FHA Refinance Loans For Your First Home

By Bruce Reichstein

Why should first-time home buyers start thinking about their FHA refinance loan options sooner instead of later? It’s not because you are actively planning to refinance, but there are circumstances which may make you reconsider your refi loan options. As a millennial home buyer, first-time homeowner, or any other type of borrower, unforeseen events or situations may have you re-thinking your long-term financial plans. There are FHA refinance loan options for first-time home buyers and new homeowners, but some are more appropriate for certain needs than others. FHA Refinance Loans For Upgrades, Repairs, And Home Improvements If your home is damaged in a storm, you experience a fire or flood, or need to repair your roof, an FHA 203(k) rehabilitation loan is the refinance you should ask a participating FHA | more...

January 17, 2023

Closing Costs Versus Down Payment

By Bruce Reichstein

Some borrowers get confused over the differences between closing costs and the required minimum down payment of 3.5% needed for FHA home loans. The confusion often comes over what is considered a down payment versus what is considered to be part of the borrower’s closing costs. The most basic thing to know is that the FHA home loan down payment is a standalone payment. It is NOT reduced by the amount of closing costs you pay such as the lender’s fee, appraisal costs, title fees, inspection fees, etc. But that isn’t all-FHA home loan rules, for example, do not permit your down payment to come from the seller. But FHA loan rules DO permit your seller to contribute a certain amount toward the closing costs of the loan. Note the | more...

The FHA Loan That Helps You Build On Your Own Lot

January 13, 2023

FHA One-Time Close Construction Loan Limits Are Higher In 2023

By Bruce Reichstein

If you want to build a home from the ground up using an FHA One-Time Close Construction Loan, there’s good news for you in 2023. Your buying power has increased thanks to FHA loan limits published at the start of the new year. The Department of Housing and Urban Development issues updated FHA loan limits on an annual basis. The limits vary depending on whether the housing market in a given zip code is considered typical, high-cost, or low-cost. In 2023, the limits for all FHA forward mortgages (including FHA One-Time Close Construction Loans) increased in many areas across the USA. FHA loan limit calculations include a nationwide forward mortgage limit ‘floor’ and ‘ceiling’ for a one-unit property. If you want an FHA One-Time Close Construction Loan in 2023, the | more...

December 30, 2022

Are You Ready To Buy A Home With An FHA Mortgage?

By Bruce Reichstein

Are you ready to buy a home with an FHA mortgage? There are ways to tell how close you are to being ready to start house hunting and move out of the planning stages of your new home loan. Do You Know Your FHA Loan Limit? FHA loan limits are higher in 2023, you will want to know how much higher the limit may be in your housing market compared to last year. FHA home loan limits vary depending on the housing market; some areas are more expensive than others and have a higher loan limit, while others are “average” and conform to the median FHA loan limit nationwide. Some housing markets may be less expensive than others and feature a lower FHA loan limit, but the only way to | more...

December 26, 2022

What Are The FHA Loan Rules For Investment Properties?

By Bruce Reichstein

FHA home loans have “approved property” rules found in HUD 4000.1, the FHA loan handbook for Single Family Mortgage loan transactions. These rules include a list of approved uses for FHA mortgages, approved property types, and the kinds of property which can never be purchased with an FHA single-family mortgage. First and foremost, FHA loans are intended for owner-occupiers, which means that FHA mortgages for vacation homes and other intermittent-occupancy purposes are not possible. Borrowers cannot use an FHA loan to open a bed and breakfast or to purchase a timeshare, condohotel or similar property. FHA mortgage loan rules in HUD 4000.1 also state the following, intended to prevent the use of single-family home loans for business purposes: “FHA will not insure more than one Property as a Principal Residence | more...