Articles in Category: Loan Limits

December 4, 2012

FHA Loan Rules For Maximum Loan Amounts

Borrowers new to the FHA loan program naturally want to know how much they may be permitted to borrow with an FHA guaranteed mortgage loan. While there is no single, fixed dollar amount maximum for the FHA loan program in general, there are rules and guidelines that govern how much a qualified borrower can get. The FHA loan rules are described in a publication called HUD 4155.1, which includes the following in FHA loan limits: “The statutory provisions of the National Housing Act establish the maximum loan limits and mortgage amounts for all FHA mortgage insurance programs. Maximum loan limits vary depending upon the • specific program under which a loan is insured • number of dwelling units in the property (one to four units), and • geographic location of | more...

June 26, 2012

FHA Loan Reader Question: Non-Occupying Co-Borrowers

By Joe Wallace

A reader asks, “Hello, I am interested in getting an FHA 203K mortgage to buy a fixer-upper and add repair costs on top of the loan amount. In the conditions of the FHA 203K plan, there is a stipulation that requires the homeowner to occupy the house. Must all of the people listed on the mortgage/loan live in the home? Can just one person listed live there without violating the terms?” FHA loans do make provisions for non-occupying co-borrowers. However, there are limits which apply to these transactions that can affect the amount of the FHA home loan. In most cases an FHA loan with a non-occupying co-borrower has a limit–for qualified borrowers the loan would be approved for 75% of the loan-to-value ratio, rather than the maximum loan amount. | more...

June 6, 2012

FHA Loans and Verifiable Income: Alimony, Child Support, and Maintenance Payments

By Joe Wallace

Borrowers applying for an FHA home loan have good reason to consider listing alimony, child support, and maintenance payment income on their loan applications. Not all wish to have this type of income included in their application data, but when accompanied by proper documentation and when verified by the lender, these types of “non-employment income” can be used to help calculate the borrower’s debt-to-income ratio for FHA loan approval. But what does the FHA require in order to verify and approve these income sources for the FHA loan? According to the FHA official site, “Alimony, child support, or maintenance income may be considered effective, if –payments are likely to be received consistently for the first three years of the mortgage –the borrower provides the required documentation” What does that documentation | more...

May 29, 2012

Up Front Mortgage Insurance Payments For FHA Home Loans

By Joe Wallace

A reader asks, “Can I roll my upfront MIP on to my loan above the county loan limits? The limit in San Diego is $697500, can I roll the upfront MIP on to the loan or do I have to pay cash?” Up front mortgage insurance payments, or UFMIP, have clearly defined rules as spelled out in HUD 4155.2. According to the rules, “The UFMIP remittance period begins on the date of loan settlement or the date of disbursement of the mortgage proceeds, whichever is later. UFMIP must be paid to FHA in a lump sum within 10 calendar days after the loan is closed.” That lump sum can be paid in cash or rolled into the loan amount, but the borrower cannot split the two options and pay a | more...

February 9, 2012

FHA Loans and Inducements To Purchase

By Joe Wallace

Recently we got a reader question about seller concessions and FHA home loans. Under the rules for an FHA mortgage, the seller is allowed to contribute certain concessions (interest rate buydowns and other contributions) as long as the concessions don’t exceed the FHA’s maximum rate. According to FHA loan rules at the time of this writing, “The seller and/or third party may contribute up to six percent of the lesser of the property

November 21, 2011

Higher FHA Loan Limits For High-Cost Counties Reinstated By Congress

By Joe Wallace

In August of 2011, the FHA and HUD issued a press release announcing changes to the FHA loan limits for high-cost counties across the nation. According to press release HUD No. 11-170, “On October 1, 2011, the Federal Housing Administration (FHA) will implement new single-family loan limits as specified by the Housing and Economic Recovery Act of 2008 (HERA).

October 28, 2011

Factors That Affect Your FHA Loan Amount

By Joe Wallace

FHA loan applicants naturally want to know how much mortgage they are qualified to get–how much can an FHA borrower receive on an FHA insured home loan? The answer isn’t as simple as a fixed dollar amount. There are many things that factor in to the final FHA home loan amount and not all of them are connected to the sale price of the home. Your FHA loan amount is influenced by the current state of the housing market, the interest rate on the loan, the asking price on the property and the fair market value of the home. The first and most obvious factor that can affect an FHA home loan amount is the borrower’s qualifications. How much are you qualified to borrow based on your income and debt | more...

October 18, 2011

FHA Loans and Required Repairs

By Joe Wallace

When an FHA loan applicant finds a home they are serious about purchasing, an offer is made for the property and a process is set in motion that leads to the FHA loan being approved or denied. When the loan is approved, it means the property has been appraised by an FHA-approved appraiser. In some cases a home may pass the appraisal process with few or no required improvements or repairs. In other cases a home may be rejected as unsuitable because of the condition of the property, but in many other cases a home may be approved for an FHA mortgage provided certain repairs or improvements are made as a condition of the sale. In such cases, depending on the repairs, the borrower or seller may be required to | more...

September 19, 2011

FHA Loans: What Is An Excessive FHA Loan Amount?

By Joe Wallace

The FHA anticipates a wide variety of scenarios a loan applicant might face during the process of applying for an FHA mortgage loan; the agency tries to anticipate many of these situations by issuing guidance for borrowers and lenders alike to prevent gray areas wherever possible. Sometimes these gray areas can’t be helped (usually based on individual circumstances) and the borrower and/or lender must contact the FHA for additional instructions. Other times the guidance issued is sufficient for the lender to decide on the right course of action and move forward on the FHA loan without further delays. One situation the FHA anticipates is known as an “excessive loan” or “excessive loan amount. According to the FHA official site, “An excessive loan amount occurs when the lender closes a loan | more...

August 22, 2011

FHA Announces New Loan Limits Effective October 1, 2011

By Joe Wallace

The FHA has issued a press release detailing changes to the FHA loan limits. The new limits will be lower in high-cost counties unless Congress introduces legislation to change the loan limits. According to a Friday, August 19, 2011 press release, “On October 1, 2011, the Federal Housing Administration (FHA) will implement new single-family loan limits as specified by the Housing and Economic Recovery Act of 2008 (HERA).