Articles in Category: FHA Loan Types

September 18, 2017

Can I Add Energy-Efficient Upgrades To An FHA One-Time Close Construction Loan?

Can I add energy-efficient upgrades to an FHA One-Time Close Construction Loan? FHA loan rules governing the FHA Energy Efficient Mortgage add-on to other loans such as an FHA One-Time Close new construction loan are found in HUD 4000.1. There we learn the following on page 400: “The Energy Efficient Mortgage (EEM) program allows the Mortgagee to offer financing for cost-effective energy efficient improvements to an existing Property at the time of purchase or refinancing, or for upgrades above the established residential building code for New Construction.” We know from that reading of FHA loan rules that new construction loans (including One-Time Close mortgages) do qualify for FHA EEMs, which allow the borrower additional funds for an “energy package” defined as: “…the set of improvements agreed to by the Borrower | more...

September 18, 2017

What Is A New One-Time Close Construction FHA Home Loan Compared To Existing Construction Loans?

By Bruce Reichstein

What is an FHA new construction loan compared to existing construction loans? Essentially the difference involves whether the home has been occupied or not since the time it was completed. FHA loan rules governing how such properties are classified can be found in HUD 4000.1, the FHA Loan Handbook. Existing Construction Existing construction loans are for structures that have been occupied at least once since the time they were completed. Such properties may be very new, others may be very old. “Existing Construction” loan procedures are less complex than for New Construction loans because the permits, escrows, inspections and other aspects of building a home have already been satisfied before the borrower comes along to buy the property. New Construction This type of property has never been occupied by an | more...

Refinancing a Second Home With An FHA Mortgage Loan

September 7, 2017

Can I Buy A Condo Unit With An FHA Mortgage?

By Bruce Reichstein

Can I buy a condo unit with an FHA mortgage? Some people have a misconception about FHA mortgages, thinking they are intended for a certain income bracket, a certain type of home, or that it is possible to earn “too much income” to qualify for an FHA loan. None of those things are true. You cannot earn too much money to qualify, and you can explore options to buy a variety of property types up to and including condominium units. Yes, FHA condo loans are possible, but they have some unique requirements (see the section on the FHA “condo project approval” list) and certain property types may be listed as condos even if they are “detached dwellings”. The requirements for these units, sometimes known as “site condos” vary slightly from | more...

September 6, 2017

Can Military Members Apply For FHA Mortgages?

By Joe Wallace

Can military members apply for FHA mortgages? There are plenty of reasons why a currently serving military member, retiree, or veteran might want to explore FHA mortgage loan options. One reason? Borrowers who have purchased property with a VA mortgage but want to buy a new primary residence might choose to explore FHA loan options rather than try to have VA loan eligibility renewed. A borrower may wish to save their VA options for later, and turn to FHA mortgages instead thanks to some similarities between both programs including Streamline Refinance loan options. What do FHA loan rules say about military members and their ability to use FHA loans instead of VA mortgage loan options? One issue with FHA loans is the occupancy requirement. Borrowers are required to occupy the | more...

Who can apply for FHA Reverse Mortgages?

September 5, 2017

What Happens To My FHA Appraisal If I Switch Lenders?

By Bruce Reichstein

What happens to my FHA appraisal if I switch lenders? It does happen-sometimes a borrower starts with one company but decides to switch lenders. There are many reasons why this could happen; a better set of terms and conditions offered elsewhere, a change of mind, etc. It is definitely possible to switch participating FHA lenders before the transaction reaches a certain point, but what if the appraisal has already happened? FHA loan rules found in HUD 4000.1 anticipate such issues, and addresses them starting on page 127, which begins by saying that the lender is required to transfer the appraisal to the new lender within five business days. In cases where a Borrower has switched Mortgagees, the first Mortgagee must, at the Borrower’s request, transfer the appraisal to the second | more...

August 28, 2017

HUD Issues Announcement On HECM Loan Policy Changes

By Joe Wallace

The Department of Housing and Urban Development has issued a mortgagee letter detailing changes to the FHA loan HECM program (also known as FHA Reverse Mortgage program) effective for all case numbers assigned on or after September 19, 2017. According to Mortgagee Letter 2017-11, the changes affect how participating lenders proceed in cases where there has been a loan default for “unpaid property charges” and the sale of property secured by an FHA HECM that has been declared due and payable. According to the FHA/HUD official site, for cases where unpaid property charges cause a HECM loan to go into default, new guidance to lenders includes the following: “If a Borrower is unable or unwilling to repay the Mortgagee for any Mortgagee funds advanced to pay property charges, the Mortgagee | more...

FHA Loan Rules: Using Rental Income to Qualify for a Mortgage Loan

August 17, 2017

What Kind Of Home Can I Buy With An FHA Mortgage?

By Joe Wallace

What kind of home can you buy with an FHA mortgage? The answer isn’t what some people expect, likely due to a misunderstanding of the FHA loan program, who it is intended for, and why it exists. A good example of this? The assumption that FHA mortgages are primarily for first-time home buyers or the economically disadvantaged. Such assumptions are not true. FHA loans are for any financially qualified applicant, which means you don’t have an income threshold to meet, there are no restrictions on those who have purchased homes before, and there is no income maximum. What kind of home can you purchase with an FHA mortgage? FHA loans permit the purchase of homes which are primarily residential, have no restrictions of resale, and which meet FHA minimum standards | more...

August 17, 2017

What Kind Of FHA Loans Are Available?

By Bruce Reichstein

What kind of FHA loans are available? This is an important question because it’s good to know what is not possible with an FHA mortgage as well as the options available to you. For example, some ask if an FHA loan can be used like a personal loan-is it possible to buy a home with an FHA mortgage but apply for more money than you need to complete the transaction? The answer in this case would be no, because FHA loan rules do not permit cash back to the borrower in that way at closing time, refunds excepted. So what can you do with an FHA mortgage loan? FHA Loans For Single Family Residences FHA home loans are intended for owner-occupiers. That means if you buy a property with an | more...

August 2, 2017

Where Can I Apply For An FHA Loan?

By Bruce Reichstein

Where can I apply for an FHA loan? Borrowers who are at the start of their home loan journey might not realize that not all home loans are created equally, that not all types of mortgages are offered by lenders, or what it means to get pre-qualified for a mortgage. What you should know to start is that FHA mortgages are not the same as conventional home loans. That is why not all lenders offer FHA mortgages. The FHA home loan program has requirements which must be met in order to be an approved FHA lender. When you find a participating lender offering FHA mortgages, you should know that these lenders have taken steps to meet FHA requirements, standards, and have received plenty of guidance on what is acceptable under | more...

What if my home was damaged in a natural disaster?

July 27, 2017

Where Do You Get A One-Time Close FHA Construction Loan?

By Bruce Reichstein

Where do you get an FHA / Single-Close construction loan? Borrowers who don’t want to purchase an existing construction property (one that has been previously owned) or a new construction home (one that is brand new and has not been owned or occupied previously) will definitely be interested in learning where to get an FHA construction loan to buy a single family home. The short answer is that an FHA construction loan is definitely possible under FHA loan program guidelines, but you will need to find a participating FHA lender willing to issue you the loan. Not all FHA lenders offer construction loans so you’ll have to shop around if your first choice in a financial institution doesn’t offer this type of FHA mortgage. There are two kinds of FHA | more...