Articles in Category: FHA Guidelines

April 28, 2019

HUD Announces Changes To Down Payment Assistance Rules

The Department of Housing and Urban Development and the FHA have issued a Mortgagee Letter announcing changes to the rules for down payment assistance. FHA loan program rules permit the borrower to get assistance with the minimum required down payment-this assistance can come in the form of gift funds from family or friends, money from employers, or even down payment assistance programs. Government entities are permitted to provide such down payment help, too. In all cases, the down payment assistance must meet FHA loan requirements. Gifts cannot be loans in disguise; there must be no expectation of repayment of a gift of down payment funds. And now, thanks to revisions to the rules governing these issues in HUD 4000.1, government entities must meet certain requirements when providing down payment funds. | more...

April 5, 2019

FHA Loan Facts

By Bruce Reichstein

When you start doing research on home loans and want to learn what it takes to qualify for an FHA mortgage loan as either a first-time home buyer or as a return borrower, you will find websites with lists of loan approval requirements. Some of those FHA home loan approval requirement lists look like this: A credit score of 580 or higher for the lowest down payment A debt-to-income ratio of 43% or less 3.5% down payment 1-2 years of consistent employment history A property that meets FHA standards OR A home eligible for FHA 203k rehab loan financing You may find a caveat on lists like these stating that they are “general guidelines” and that is true. What isn’t always included in those caveats is that additional lender standards | more...

April 3, 2019

FHA Home Loan Appraisal Issues

By Bruce Reichstein

We are contacted frequently with questions related to FHA appraisals. Many first-time borrowers and experienced house hunters alike have trouble understanding the nature of the appraisal process and how it works. We are often asked if a certain appraisal condition is grounds for having the loan denied, and whether FHA home loan appraisal rules fit a unique circumstance. But whatever the question, the variable in the equation is the fact that FHA appraisal rules, which are basically minimum requirements, are not the only rules that will affect the transaction. So even if FHA appraisal requirements say that a home that has lead-based paint may be acceptable under certain conditions, state or local building code may have additional requirements. And the building code requirement in that area would have to be | more...

March 29, 2019

Five Things You Should Do Before Applying For Your First Home Loan

By Joe Wallace

First-time home buyers should be working on five areas before they apply for a mortgage loan. Are you working with a real estate agent or searching the real estate listings in your local area? Maybe you want to buy a new home in a different area than where you are living now and need to know the ins and outs of the neighborhoods there? Decide What Kind Of Home Loan You Need Having a home built from the ground up is possible with an FHA One-Time Close Construction Loan, but these loans are quite different than an FHA Condo Loan or FHA loans for a mobile home or manufactured home. Knowing the kind of loan you want in advance will help you search for the right kind of lender-some financial | more...

March 28, 2019

FHA And HUD Announce Home Loan Policy Changes

By Joe Wallace

The Department of Housing and Urban Development has announced policy updates and changes that have been added to the FHA Single Family Home Loan Program Handbook, HUD 4000.1. According to an FHA/HUD press release, these are the first changes and updates to the handbook since late 2016. “With today’s update, FHA is recommitting to the industry that it will continue to maintain and enhance the SF Handbook so that it becomes a single, comprehensive source of policy guidance for lenders and other stakeholders doing single family business with FHA” according to the press release. The updates, posted March 27, 2019, include a set of “technical changes for consistency and clarity” as well as FHA home loan program policy updates. These updates affect how the lender may handle certain issues associated | more...

March 22, 2019

FHA Home Loans For Homes Built Before 1978

By Bruce Reichstein

FHA home loans are offered for a variety of home needs including building a house from the ground up with an FHA One-Time Close construction loan, but there is also an option to use your FHA mortgage to buy an older home that is not considered new construction. In cases where the property is older than 1978, there are some additional rules regarding the potential for lead paint in the residence that all borrowers thinking about buying older property should be aware of. FHA home loan rules in HUD 4000.1 point out that any home built prior to 1978 must include disclosures to the buyer: “…the seller must disclose any information known about lead-based paint and lead-based paint hazards before selling the house, in accordance with the HUD-EPA Lead Disclosure | more...

March 18, 2019

How Do I Refinance My Home Loan?

By Bruce Reichstein

Are you planning to buy your first home and wondering about your refinance loan options later down the line? Do you already own a home you need to refinance? There is good news for you; refinancing with an FHA mortgage can help you get into a lower mortgage payment, get out of an adjustable rate mortgage, or even renovate your house. What does it take to refinance a home loan with an FHA mortgage? Choose The Refinance Loan You Need There are several FHA refinance loan options. If you need to remodel or repair your home at the same time you refinance, you can apply for an FHA 203(k) rehab loan that provides funds for approved upgrades and improvements. But the FHA rehab refinance loan (which is also available as | more...

March 15, 2019

FHA Home Loan Approval Rules You Should Know

By Bruce Reichstein

If you are a first-time home buyer or have never used an FHA home loan before, there are some rules about FHA mortgages you should know before getting started. FHA Home Loan Approval Depends On More Than Your Credit Score It’s easy to fixate on credit scores and they are a major part of what your lender will use to determine a borrower’s creditworthiness. But it’s not the only criteria. Your income, employment, and credit habits will all be examined at home loan application time. FHA loan rules specifically require the lender to verify two years of employment, and that employment does not have to be with the same company. The rules also require your lender to determine that your income is likely to continue. But this is possible even | more...

March 8, 2019

FHA Home Loan Down Payment Assistance Rules You Need To Know Now

By Joe Wallace

FHA home loan rules allow down payment assistance for the mortgage for both first time buyers and experienced house hunters alike. There are down payment assistance programs for first-time borrowers, there are down payment gift funds that can be provided by family, friends, or employers…but all of these are subject to FHA loan rules. FHA Home Loan Down Payment Assistance Rules HUD 4000.1 says down payment assistance cannot come from any entity or party that has a stake in the outcome of the home loan sale or the approval of the mortgage loan. That includes: -The seller of the Property; -Any other person or Entity who financially benefits from the transaction (directly or indirectly); or Anyone who is or will be reimbursed, directly or indirectly, by any party included in | more...

February 28, 2019

FHA Home Loan Answers For First-Time Borrowers

By Joe Wallace

First-time borrowers have many questions about FHA home loans. Here are some common questions and the basic answers, which should give you plenty to discuss with a lender when the time is right. What do you need to know about an FHA home loan? Can I Earn Too Much Money To Qualify For An FHA Mortgage? FHA loans do not have an income cap and these mortgages are not need-based loans. First-time home buyers may have financial constraints such as a tight budget and a need to save money up front on the transaction, and the FHA loan program is designed to help such borrowers with lower down payment requirements and the ability to finance certain closing costs. Do I Have To Live In The Home I Buy With An | more...