Articles in Category: Energy Efficient Mortgage

Can I get an FHA home loan if I owe back taxes?

January 31, 2017

Eligibility Rules For FHA Loans

Eligibility rules for FHA loans are found in HUD 4000.1, which addresses who is permitted to apply for an FHA single-family home loans. Who can apply for an FHA loan and what do the rules say about these applicants? The most basic eligibility rules for FHA loans include the requirement that the borrower be an owner-occupier of the property to be purchased. FHA loan rules do not permit FHA single family home loans to be used for investment properties, so the borrower who wishes to buy a multi-unit property and rent out all of those units to other people would not be approved for the mortgage. The same is true of those who wish to purchase time shares, condo hotels, or other “transient occupancy” or short-duration occupancy properties. That said, | more...

January 3, 2017

FHA Mortgages: Loan Basics For 2017

By Joe Wallace

For those who are weighing their real estate options in 2017, an FHA home loan can be an important option. Compare the down payment and interest rates on FHA mortgages with their conventional counterparts and it’s easy to see why many borrowers opt for an FHA mortgage. FHA loans, like most mortgage loan programs (with the exception of VA home loans, which are in general available only to qualifying military members), require a down payment which is usually 3.5% of the adjusted value of the property. Your down payment is required above and beyond other closing costs, mortgage insurance, etc. and must come from approved sources such as savings/checking accounts, the proceeds from cashed-in investments, cash saved at home, etc. Your down payment cannot come from payday loans, credit card | more...

July 8, 2016

FHA Loans Versus Conventional Loans

By Joe Wallace

Here’s the Scoop on Conventional Loans from FHA.com on Vimeo. What are the differences between FHA home loans and conventional loans? There are several, some features of mortgage loans can vary depending on the lender, and state law may also affect how your home loan is handled depending on circumstances, but there are a few very important general differences to keep in mind when comparing FHA loans to conventional loans. The first difference is the basic nature of the loan itself. Conventional loans are not backed by the government, unlike FHA home loans where the FHA guarantees a portion of the loan to make it more attractive to the lender to issue credit. In the event that a borrower defaults on an FHA loan, the lender and the FHA have | more...

June 3, 2016

FHA Loan Questions and Answers

By Joe Wallace

Tired of renting and looking to purchase a home of your own? There are many questions many first time home buyers or first time FHA loan applicants have. Here is a list of some of the most frequently asked questions about FHA mortgages. Is There An Income Limit For FHA Loans? No. FHA mortgages are not designed specifically for one type of financial situation or another. You cannot “earn too much” with the FHA single family home loan program. All wage earners are encouraged to explore their FHA loan options. Is There A First-Time Home Buyer Advantage Or Preference With FHA Mortgages? While an individual lender may offer certain perks for first-time home buyers, the FHA single family home loan program itself does not have a first time home buyer | more...

April 11, 2016

Mortgage Rate Trends: Near Best Levels All Year?

By Joe Wallace

With only one day last week with rates moving upward, we’ve seen mortgage loan interest rates hit territory better than we’ve seen for a good portion of 2016. Much of last week was either improvement, or holding steady following that improvement. On Friday rates didn’t move downward, but they definitely held steady. 30 year fixed rate conventional mortgage rates with some very competitive lenders were as low as 3.5% best execution, with many more offering a best execution 3.625%. FHA mortgage loan rates remained at 3.25% best execution, having moved out of a previous range with 3.5% at the top end (best execution). It’s not clear whether this rate will become a new comfort zone for FHA loans or if we’re seeing a short term trend only. As always, best | more...

March 22, 2016

How Much Can I Borrow With An FHA Mortgage Loan?

By Joe Wallace

One of the most common questions about FHA loans is, “How much can I borrow?” The answer to that question is a lot easier to get by using an online mortgage calculator to factor in the length or term of the loan, interest rate (estimated), estimated property taxes and other details. Some of the information you need to calculate how much you can borrow depends on circumstances. The interest rate, for example, is determined in part by what rates are on offer currently based on market conditions and other factors but also by your credit history and FICO scores. The better your FICO scores are, the better the interest rates. The borrower and the lender negotiate interest rates on FHA mortgages, they are not set or regulated by the FHA | more...

When Is An FHA Loan Better Than A Conventional Loan?

March 9, 2016

FHA Loan Rules in HUD 4000.1 on Maximum Loan Amounts

By Joe Wallace

When the FHA and HUD published HUD 4000.1, that document became the comprehensive rule book for FHA single family home loans and refinance loans. Many policies were updated, amended, altered or restated and there’s no way to compare all the changes with the previous version of FHA home loan rules found in HUD 4155.1 and HUD 4155.2. With that in mind we have been examining important sections of HUD 4000.1 to learn what the most up-to-date FHA loan policies are. Today we’re examining the FHA loan rules for maximum loan amounts. HUD 4000.1 begins this section by explaining the basics: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios | more...

March 8, 2016

FHA Loan Rules For Home Sales: HUD 4000.1

By Joe Wallace

The FHA Single Family Mortgage Loan program is regulated by the rules published in HUD 4000.1. These rules cover everything from appraisal requirements and FICO score minimums to Fair Housing requirements and responsibilities. HUD 4000.1 also establishes requirements for the home loan transaction–for example, did you know FHA mortgage loan rules have specific parameters for who can sell the property to the borrower purchasing with an FHA mortgage? HUD 4000.1 clearly states: “To be eligible for a mortgage insured by FHA, a Property must be purchased from the owner of record. The transaction may not involve any sale or assignment of the sales contract.” How is the lender required to establish that the seller is the owner of record? FHA loan rules say the lender must, “obtain documentation verifying that | more...

February 25, 2016

FHA Loan Questions: Are Military Members Eligible For FHA Mortgages?

By Joe Wallace

One common question about FHA loans involves whether or not military members are eligible to apply. Some military members may choose FHA mortgage options over VA loan benefits depending on circumstances, what do FHA loan rules tell lenders about veterans and currently serving members of the U.S. military? HUD 4000.1 contains the rules that apply in these cases. One of the reasons some could mistakenly assume military borrowers might not qualify for FHA mortgages has to do with the FHA’s occupancy rule for new purchase loans and refinances. But FHA loan rules include the following on occupancy for military applicants: “Borrowers who are military personnel, who cannot physically reside in a Property because they are on Active Duty, are still considered owner occupants and are eligible for maximum financing if | more...

February 2, 2016

FHA Mortgage Loan Down Payment Rules

By Joe Wallace

FHA loans require a minimum down payment of 3.5%–that’s typical for many FHA mortgages. In some cases, depending on the nature of the loan and the borrower’s financial qualifications and FICO scores, the required down payment may be higher. But no matter what the down payment amount might be (and it will vary from loan to loan) the FHA has specific rules governing the sources of and verification for down payment funds. The FHA loan rulebook for single family mortgage loans is HUD 4000.1, which refers to the down payment as a “minimum required investment”: “Minimum Required Investment (MRI) refers to the Borrowers contribution in cash or its equivalent required by Section 203(b)(9) of the National Housing Act, which represents at least 3.5 percent of the Adjusted Value of the | more...