Articles in Category: Loan Limits

May 14, 2015

FHA Loans: Is There A Minimum Loan Amount?

A reader asks, “Is there a minimum amount that you can get a loan for meaning (how cheap of a house will they loan on?) under 40K?” FHA loan rules in HUD 4155.1 do spell out an FHA loan limit, which is known as the “floor” on the bottom end, and the “ceiling” at the top end of the range. The FHA recently issued a mortgagee letter (HUDNo.2015-25) which updates the information for FHA loan limits in general and announces a new FHA loan rulebook to be issued soon, titled FHA Single Family Housing Policy Handbook 4000.1. The mortgagee letter states: “The minimum FHA national loan limit ‘floor’ is at 65 percent of the national conforming loan limit (which is $417,000 for a one unit property for the period January | more...

April 16, 2015

FHA Mortgage Rate Trends–Mostly Improving Since 9 April

By Joe Wallace

On April 9, 2015, mortgage rates moved higher than they had been all month–not saying much since the month was only nine days old, to be sure. But since that time, rates have improved. There have been some ups and downs (yesterday mortgage rates experienced some weakness depending on the lender, but overall in the last four business days we’ve seen improvements.) but overall we’re still seeing rates holding at or near levels we reported last time. 30-year fixed rate conventional mortgages have been, at the time of this writing, at or near 3.625% (best execution), but in a range that tops out at 3.75% (again, best execution and depending on the lender). FHA mortgage loan rates are holding in a comfort zone between 3.25% and 3.5% best execution. Until | more...

April 7, 2015

FHA Loans and Verifiable Income Sources: A Reader Question

By Joe Wallace

A reader asks, “I have a notarized agreement with the father of my child to receive a total amount of cash distributed in two or more deposits during the month in my account.” “I receive it on Cash and then I deposited in my bank account. My lender deny me the loan because they need to see the whole amount agreed in only one single deposit. Is that true? How can I properly prove and evidence this income?” It’s important to remember that FHA home loans have two sets of standards which must be followed–basic FHA loan guidelines are one, and participating lender standards are another. Depending on the laws of your state, lender requirements, and other factors, a borrower may find questions such as these tough to get a | more...

March 27, 2015

FHA Home Loan LTV Calculations: A Reader Question

By Joe Wallace

A reader asks, “Is the LTV calculated on the total loan amount (base loan+MIP), or the base loan amount only?” FHA loan rules covering the subject of loan-to-value calculations are found in HUD 4155.1 Chapter Two Section A, which states: “The maximum mortgage amount that FHA will insure on a purchase is calculated by multiplying the appropriate loan-to-value (LTV) factor by the lesser of the property’s –sales price, subject to certain required adjustments, or –appraised value. In order for FHA to insure this maximum loan amount, the borrower must make a required investment of at least 3.5% of the lesser of the appraised value or the sales price of the property.” The 3.5% investment, better known as the borrower’s down payment, is also covered in Chapter Two Section A with | more...

March 23, 2015

FHA Loan FICO Score Requirements

By Joe Wallace

We get many questions and comments about FHA home loans where FICO scores are concerned. Some borrowers seem to have doubts about whether or not they can qualify for an FHA mortgage loan or refinance loan because of their FICO scores and other financial qualifications. Consider this recent reader comment that came in: “Have a score of 565 & trying to Get A Home Loan.” While there’s no specific question mentioned, it’s easy to see the reader is looking for some kind of information on FHA loan FICO score minimum requirements. Here’s a chart that’s printed in HUD 4155.1 which lays out the minimum required FICO scores needed to get an FHA mortgage: Some who are new to applying for a home loan may wonder what it means to be | more...

February 25, 2015

FHA Loan Rules: Income Limits, Loan Limits

By Joe Wallace

A reader asks, “Can a 68 year old retired person qualify for an fha loan and what is the dollar limit?” FHA loan rules do not specify an age limit or an income limit. FHA home loans are for any qualified borrower who meets the FHA loan program minimum FICO score standards as well as (possibly higher) lender FICO score standards. There’s no minimum or maximum income requirement–instead, the borrower’s debt-to-income ratio is examined to see if she or he can afford the new loan. This means that a borrower who seems to have a low income but can afford both existing monthly payments and the proposed new FHA home loan may be eligible for loan approval as long as they otherwise qualify with FICO scores, good loan repayment history, | more...

What you should know about FHA 203(h) Loans For Disaster Victims

February 10, 2015

FHA Loan Questions: Minimum Income Requirements

By Joe Wallace

A reader asks, “Hello just want to know how much do my annual gross amount have to be to get approved for a FHA loan?” Two of the most common myths about FHA home loans are that the FHA is only for first-time homebuyers and that FHA loans have a minimum income or maximum income requirement. None of those things are true. The FHA does not have a minimum dollar amount the borrower must earn in order to qualify, and there is no income ceiling or limit for FHA loans. FHA loans are not specifically for disadvantaged people, nor are they specifically for first time home buyers. However, it’s important for all potential FHA borrowers to know that your lender will determine whether or not you can afford the new | more...

February 10, 2015

FHA Loan Reader Questions: FHA Loans After A Short Sale

By Joe Wallace

A reader asks, “We had a job loss and were working on a loan modification that was supposedly going to be approved and was then denied. We filed and were discharged from CH 7 back in 2010, never reaffirmed the mortgage, but paid on it until it was obvious we were not going to get any cooperation from the lender. Moved out and short sold in May 2013 and are now looking to buy again.” “What is the FHA standard for the downpayment we’d have to make? We have been told 20%, but read elsewhere that for a mortgage that was discharged in bankruptcy and never reaffirmed, that the applicable period for any wait time is the date of the bankruptcy discharge and not the date of the short sale? | more...

June 6, 2014

Adding Solar Energy Installation Costs To An FHA Loan

By Joe Wallace

When you’re purchasing a home with an FHA mortgage loan, it may be necessary to add improvement or upgrade costs to the loan amount, depending on the circumstances. The FHA has specific rules that govern this practice–for example, no costs incurred before the appraisal can be added to the loan. HUD 4155.1 has the rules that cover these extra costs. For example: “The repair and improvement amount that may be added to the sales price before calculating the maximum mortgage amount is the lowest of the • amount that the value of the property exceeds the sales price • appraiser’s estimate of repairs and improvements, or • amount of the contractor’s bid, if available.” FHA loan rules in the same section also state that, “The mortgage amount may be increased | more...

February 10, 2014

Maximum FHA Loan Amounts For New Purchase Home Loans: What The Rules Say

By Joe Wallace

One of the most common questions about new purchase FHA loans–where the borrower wants to buy a home (as opposed to refinancing one) involves the maximum loan amount. What do FHA loan rules say about how much you can borrow? Is there a maximum dollar amount for the FHA loan? The answer isn’t as simple as quoting a dollar figure. The FHA loan rulebook doesn’t contain a single number that effectively limits the dollar amount. Instead, there are a variety of factors that may vary depending on where the home is located and other variables. The rules for FHA loan maximums are found in HUD 4155.1, Chapter Two Section A. Under the heading titled, “Maximum Mortgage Amounts For A Purchase” we find the following: “The maximum mortgage amount that FHA | more...