Articles in Category: FHA Lenders

July 30, 2021

What You Need To Know About FHA Home Loan Credit Checks

What do first-time home buyers need to understand about the credit check process for getting an FHA mortgage? There are many variables but one thing you can do to get a better understanding of what it takes to be approved for a loan is to start trying to think like a loan officer–their job depends on making sure that you are a good credit risk. How can you help the lender help you? What you don’t know can hurt you in the journey toward buying that first piece of real estate. Before you begin working with a realtor, you should know several things about the credit check process. Credit is a major part of home loan approval and you want to be able to convince your lender you are ready | more...

July 12, 2021

Documents You’ll Need To Apply For A Home Loan

By Joe Wallace

Do you know the paperwork and documentation you’ll need to complete a home loan application? There are plenty of things you’ll need to gather–what follows is a list of items that are easy to overlook when you’re thinking about filling out an online loan application. This list is not exhaustive–you should ask your loan officer for a complete list of that financial institution’s requirements–they aren’t always the same. Authorization The first thing to know about some home loan documentation requirements? Some of them are fairly non-negotiable. For example, your lender must get copies of your credit report to complete your mortgage application. This requires all borrowers named on the mortgage application to give permission to the lender to do so and you cannot supply your own credit data to the | more...

June 18, 2021

Changes To FHA Home Loan Policy: Student Loan Debt

By Joe Wallace

The Department of Housing and Urban Development official site has published a press release announcing an important revision to FHA Single-Family home loan guidelines in HUD 4000.1 concerning how a participating FHA lender should consider student loan debt as part of the loan approval process. Before the publication of HUD 4000.1, the FHA Single-Family Loan program handbook, FHA loan rules “did not address how Mortgagees should calculate future payments of deferred student loan debt which, once due, could negatively impact a Borrower’s long-term ability to repay their Mortgage and other monthly obligations” according to the HUD press release. What’s more, FHA loan rules did not consider deferred and non-deferred student loan debt separately. When HUD 4000.1 was published to replace HUD 4155, FHA loan rules were modified to require a | more...

June 7, 2021

FHA/HUD Near Current Deadlines For Ending COVID “Flexibilities”

By Bruce Reichstein

On March 13, 2020, the President of the United States declared a national emergency in relation to the COVID-19 pandemic. Not long after, the FHA and HUD published details of altered FHA loan procedures designed to reduce the risk of spreading COVID-19. These altered procedures included modified employment verification, appraisal processes, and appraisal protocols such as exterior-only options. The HUD guidelines for these modified policies were intended to address the specific needs and risks associated with in-person requirements during COVID. Some of the temporary policies were allowed to expire but then got reinstated. Others simply had their deadlines extended. In January of 2021, President Joseph R. Biden announced a plan called the National Strategy for the COVID-19 Response and Pandemic Preparedness, and in response, temporary FHA and HUD policies were | more...

April 20, 2021

FHA Announces Revised Single Family Home Loan Policies

By Joe Wallace

Since the start of the pandemic and COVID-19 mitigation measures, American homeowners have felt the effects of job loss, layoffs, furloughs, and other hardships related to coronavirus quarantine issues. Many of those with FHA home loans, FHA refinances, and other loans have needed foreclosure avoidance measures due to this economic hardship brought. Fortunately agencies like the FHA and HUD implemented many things for homeowners with FHA mortgages. Now the FHA announces some changes to the basic structure of the single-family home loan program to help these homeowners stay in their homes. The FHA updated portions of its rulebook for single-family home loans; the changes will help lenders, “more quickly offer effective loss mitigation home retention options to borrowers in danger of losing their homes to foreclosure”. These policy changes are | more...

February 18, 2021

HUD Further Extends COVID-19 Foreclosure Relief

By Joe Wallace

The FHA and HUD have announced new modifications to coronavirus relief options for FHA borrowers in need of foreclosure avoidance help during the pandemic. Effective immediately, HUD has implemented a variety of modifications: Extended foreclosure and eviction moratoriums now expire June 30, 2021; Deadline for “first legal action” and “Reasonable Diligence Time Frame” is extended to 180 days; COVID-19 Forbearance start dates are now extended to June 30, 2021; HECM extension period is extended to June 30, 2021; HUD now offers up to two additional three-month COVID-19 Forbearance periods or HECM extension periods “for certain Borrowers”; HUD now allows additional Borrowers, “regardless of delinquency status or participation on a COVID-19 Forbearance” to apply for FHA’s COVID-19 Loss Mitigation Options; HUD has removed the restriction on “Borrowers receiving more than one | more...

February 8, 2021

FHA Refinance Loan Options: Why You Should Consider A Streamline Refinance

By Joe Wallace

Do you need to consider refinancing your current FHA home loan? Interest rates are still very low in the earliest weeks of 2021 and while there is no guarantee mortgage rates will remain quite this low for the duration of the year, now is a great time to consider your options for a lower mortgage payment via an FHA Streamline Refinance loan. Interest rates in the opening weeks of 2021 are still at the time of this writing below the three percent line for 30-year fixed rate government-backed mortgages such as FHA loans. A mortgage industry company, Black Knight, has issued a report that noting that at the end of January 2021 there were some 45 thousand people exiting home loan forbearance programs and another nearly 50 thousand loan forbearance | more...

January 12, 2021

What Affects My FHA Loan Approval? Debt Ratio Issues

By Bruce Reichstein

Every mortgage or finance blog includes a lot of writing and advice about the need to monitor your credit reports. And make no mistake, this is important advice that is good to follow, but if you are in the market for a new home in 2021 the amount of monthly debt you have compared to your monthly income will be just as important for loan approval. Why Your Debt Matters Some applications crunch the numbers and believe they can afford the loan on paper. But what happens when that does not match what the lender gets when she runs your debt ratio numbers? People who technically qualify on paper but not in reality are bad risks for the lender and their jobs depend on screening out those bad risks. And | more...

November 11, 2020

Happy Veterans Day 2020

By Bruce Reichstein

Happy Veterans Day! Many banks will be closed to observe this federal holiday, bond markets are closed, and we pause in our usual routine of discussing home loan issues and answering questions about FHA home loans to honor our veterans. Thank a veteran for her service, and remember the sacrifices all our troops have made no matter where in the world they may be stationed. To all current and former members of the U.S. military, THANK YOU for your service! Our regular posting schedule resumes tomorrow.

November 5, 2020

Mortgage Loan Interest Rate Trends

By Joe Wallace

FHA mortgage loan rates have had a wild ride in 2020, and that is likely not over headed into the November and December holiday seasons. The 52-week average for government-backed mortgage loan interest rates has a bottom at 2.25%, which is significant since mortgage loan rates had, until this year, rarely seen territory below the three percent range. And the upper end of the 52-week average at the time of this writing is four percent–that should give you a good idea of how rates have fluctuated in the last 12 months. There is still plenty of uncertainty over which way rates might trend into the new year after the election season, continued issues with COVID-19, etc. At the time of this writing, the best-execution FHA mortgage rates (assuming ideal conditions) | more...