Articles in Category: HUD Regulations

September 28, 2018

FHA Home Loan Approval Questions Part One

FHA home loan approval is a process that requires your lender to review your credit history, employment history, and many other factors before deciding to approve or deny a home loan application. There are many questions about this process, and the more answers you have before yo start filling out applications, the better. The answers in this blog post pertain to FHA loan basics, but also rules for self-employed borrowers and those earning commission income. FHA Loan Approval Basics: What Do I Need To Know? The lender will pull copies of your credit report and review your payment history for the 12 months leading up to the mortgage loan application. FHA loan rules are similar to other home loan requirements in this area; coming to your FHA mortgage application process | more...

September 26, 2018

What Happens If I Pre-Pay My FHA Mortgage?

By Bruce Reichstein

What happens if you pre-pay your FHA mortgage? FHA home loans are known for having no pre-payment penalty but there may be certain steps the borrower is required to take in order for such pre-payments to be used as intended. The date of your FHA loan may make an important difference in how you are to proceed; it’s best to discuss pre-payment options with your loan officer ahead of time to learn what, if any, additional lender requirements may exist above and beyond the FHA loan standards we’re discussing here. What follows is NOT lender policy but the FHA loan rules. Lender requirements may add to or further develop these FHA guidelines. FHA Home Loan Rules For Pre-Payment On Mortgages Closed On Or After January 21, 2015 FHA loan rules | more...

September 17, 2018

HUD Announces Settlement In Nevada Fair Housing Act Harassment Case

By Joe Wallace

The Department of Housing and Urban Development has announced a settlement in a Fair Housing Act case in Reno, Nevada. According to the HUD official site, the settlement involves a “…Conciliation Agreement between Reno, Nevada-based CMS Property Services, LLC, and its property manager and a female tenant, resolving allegations that the manager sexually harassed the woman.” Some are not aware that Fair Housing Act regulations include a prohibition of sexual harassment, but federal law makes it illegal for a housing provider to sexually harass tenants. The HUD official site says this rule includes, “creating a severe or pervasive hostile housing environment, or conditioning housing or housing-related services on the tenant’s acquiescence to sexual demands. The Act also prohibits retaliating against persons who complain about housing discrimination.” Often the only line | more...

July 20, 2018

Can I Use Gift Money For My FHA Home Loan Down Payment?

By Bruce Reichstein

FHA home loans feature low down payment requirements; only 3.5% of the adjusted value of the home is required in many cases unless a borrower’s credit scores don’t meet FHA lender requirements and FHA single family home loan guidelines. But even these low down payments can be challenging for some FHA loan applicants, and many borrowers wonder what the allowable sources for FHA mortgage down payment funds might be. FHA mortgage loan rules state that a borrower’s minimum required investment (MRI) is completely separate from all other payments or fees for an FHA mortgage. And the source funds for the MRI must come from approved sources, which can and sometimes do include gift money. HUD 4000.1, the FHA loan handbook, states clearly that gift funds can only come from approved | more...

July 16, 2018

Are Free Credit Reports Trustworthy?

By Joe Wallace

Long before you fill out FHA home loan application forms, you should be requesting copies of your credit reports and reviewing the information your lender will see when you are ready to get your new home loan. There are many websites and third-party companies that offer free credit reports to help loan applicants, but not all of them are interested just helping consumers. Can you trust the companies that offer free credit reports and credit score information? While it’s not possible to recommend a specific organization (with one exception), it is good for consumers to remember that many companies offer free services in exchange for your personal data that can be used to market goods and services to you via your cell phone number, email address, and other information. The | more...

June 18, 2018

FHA Loans: What Does It Mean To Be A First-Time Home Buyer?

By Joe Wallace

What does it mean to be a first-time home buyer when applying for an FHA home loan? Many borrowers want to know if there is an advantage to applying for an FHA mortgage if they have never borrower money for a home before. What is the reality? The FHA loan program itself does not give advantages to the first-time home buyer, nor does it penalize someone who has owned a home before. All financially qualified applicants are able to get an FHA loan even if they have purchased a home before. That does NOT mean first-time home buyers won’t get offered incentives from a participating FHA lender, but those incentives are offered by the lender and not via the FHA home loan program itself. Borrowers who are first-time home buyers | more...

June 15, 2018

When Is An Appraisal Required For My FHA Mortgage Loan?

By Joe Wallace

When is an appraisal required for an FHA home loan? This important question often comes up when borrowers want to refinance a home using an FHA refinance loan such as cash-out refinance, FHA Streamline Refinance, or even when the borrower wants to apply for an FHA Reverse Mortgage. Appraisals are required for most FHA loan transactions-you will always have to pay for an appraisal for an FHA forward mortgage, which is the kind of loan you will apply for when purchasing a new home. Appraisals are required for both existing construction loans and FHA One-Time Close construction loans, though the process will vary for construction loans due to the nature of the transaction. Appraisals will also be required for FHA Rehab loans. The appraisal is intended to establish the fair | more...

June 15, 2018

HUD Settles Housing Discrimination Complaint Against San Francisco Real Estate Companies

By Bruce Reichstein

There are many types of housing discrimination; some occurs when a house hunter is searching for a home, trying to rent in the local area and encountering violations of the Fair Housing Act while trying to do so. Other types of housing discrimination can occur in the house hunting process itself. Housing discrimination may come from a variety of sources; including, in the case of a recent HUD Fair Housing settlement, real estate firms. The HUD official site announced a settlement in June in the case of two San Francisco-based real estate companies accused of Fair Housing Act violations. HUD approved “a Voluntary Compliance/Conciliation Agreement settling a complaint filed by a family whose infant has a disability against San Francisco, California-based John Stewart Company and Hunters Point East West, LP.” | more...

May 25, 2018

FHA Home Loan Rules For New Construction Appraisals

By Joe Wallace

Borrowers who are interested in having a home built for them from the ground up using an FHA construction loan such as an FHA One-Time Close mortgage or any other type of FHA-guaranteed mortgage loan may wonder what the rules are for appraisals. After all, existing construction appraisal processes are for a home that is ready to sell (although the process may vary if the borrower is applying for certain types of rehab loans). While the appraisal requirements may be generally the same-the home must be safe, habitable, and have an economic life for the entire duration of the mortgage-there are procedural issues that affect new construction properties. With that in mind, appraisals on new construction run a bit differently in some procedural ways than existing construction mortgages; with the | more...

April 25, 2018

FHA Home Loan Closing Costs You Should Anticipate

By Joe Wallace

FHA home loans have closing costs a borrower should plan to save and pay for. No matter if you need an FHA Home Equity Conversion Mortgage, a 203(k) rehab loan, or an FHA One Time Close construction loan, there will be closing costs to pay for. No borrower should plan for a home loan without anticipating the closing costs. You should budget and save for these expenses as early as possible-once you know you are interested in purchasing a home, you should prepare for these costs. HUD 4000.1 tells the lender that FHA loan rules permit closing costs; the lender “may charge and collect from Borrowers those customary and reasonable closing costs necessary to close the Mortgage. Charges may not exceed the actual costs.” This is not a complete or | more...