October 17, 2024
There are several reasons why a house hunter looking for a home to purchase with a VA mortgage might want to buy a piece of land. In times when the housing market is favorably inclined towards new construction loans, some buyers might want a government insured loan for a proposed construction or new construction purchase; others might want to buy a piece of land for a manufactured home or mobile home.
September 4, 2024
New home buyers have a lot to learn about the process of applying for and being approved for FHA home loans. The advantages of the FHA mortgage include lower down payment requirements and more forgiving FICO score rules…but how can a new borrower know how much loan they are permitted to apply for? HUD 4000.1, explains how FHA loan limits work. This handbook, a comprehensive guide to the FHA Single-Family Home Loan program, explains: “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.” These limits are set based on median house prices and are influenced by the home loan limits established by Freddie Mac and Fannie Mae. One Size Fits All? Do FHA | more...
November 29, 2023
In the last week of November 2023, new FHA loan limits were issued for 2024. Those new limits (see below) are for forward mortgages approved under the FHA Single Family Home Loan program. Higher FHA Loan Limits In 2024 FHA loan limits increase for a large number of applicants in 2024. HUD.gov says the limits will increase for most of the country, and a HUD press release says that FHA loan limits are increasing at least in part due to increases in property values in 2023. That’s according to Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. The changes to FHA loan limits are meant to help buyers to find affordable homes, “at a time when a lack of affordability threatens to shut well qualified borrowers out of | more...
January 13, 2023
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? 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...
July 22, 2022
What is an FHA loan limit? The answer to this question can be found in HUD 4000.1, the FHA Single-Family Lender’s handbook, which begins by explaining: “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 vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction.” Furthermore, the handbook says that for most FHA loan programs the maximum mortgage is either the Nationwide Mortgage Limit for that area or “a percentage of the Adjusted Value”. The handbook breaks down how a home’s adjusted value is calculated, according to transaction. For new purchases or “forward mortgages”, the FHA Lender’s Handbook states: “For | more...
April 22, 2022
Here is a common variation on an FHA loan question we get frequently. “I have been employed for about two years, do I qualify for an FHA mortgage?” FHA loans require a variety of financial qualifications including FICO scores, your history of payments on financial obligations, your debt-to-income ratio, and other factors. Lender standards and FHA loan rules both apply, as do some state laws and other regulations. There’s no individual factor that determines a borrower’s ability to qualify for an FHA mortgage, a number of variables come into play as mentioned above. Sometimes one or more factors can disqualify a borrower, it’s true-a low FICO score, debt ratios that are too high, missed payments in the last 12 months leading up to the loan application, or major changes in | more...
January 19, 2022
Is it possible for borrowers to apply for second FHA loans, resulting in paying on two mortgages at once? Here is a variation on a common reader question about this issue: “I relocated to another state over 400 miles away. Will I be able to get an FHA loan even though I still own my first home?” There’s no one single answer to a question like this. Aside from FHA loan rules, a borrower’s credit rating, loan repayment history, and debt-to-income ratio may all play a part in whether a lender is able to approve or deny an FHA loan. In cases like these, one of the most important factors would be (all other considerations aside) focused on the borrower’s debt-to-income ratio. With an existing mortgage payment, will the borrower | more...
December 2, 2021
FHA is required by a federal law known as the National Housing Act (NHA) (and its’ amendments found in the 2008 Housing and Economic Recovery Act) to establish FHA home loan limits. These limits are announced close to the end of the previous year in anticipation of the new year. Those limits are set at 115 percent of area median house prices, with a low-end limit (the “floor”) and an upper limit (the “ceiling”) for FHA loan limits. There’s an annual review of these limits to see if they should be adjusted due to economic factors or other variables. In the first week of December 2021, the Federal Housing Administration announced higher FHA loan limits for the year 2022, and those higher limits are effective for both forward mortgages/purchase loans | more...
December 1, 2021
There are higher FHA loan limits scheduled for the year 2022. The FHA and HUD have published two mortgagee letters explaining the new limits for purchase loans and reverse mortgages guaranteed by the FHA (known as FHA Home Equity Conversion Mortgages). According to the HUD official site, the new forward mortgage loan limits for FHA loans in 2022 are available to view but do not take effect until the new year. HUD.gov reminds readers that the FHA loan limit calculations include “a nationwide forward mortgage limit ‘floor’ and ‘ceiling’ for a one-unit property. In 2022 the floor is $420,680 (low-cost areas) and the ceiling is $970,800 (high-cost areas). The floor is established at 65% of the national conforming loan limit of $647,200 for a single-unit home. For multi-unit properties in | more...