Articles in Category: HUD Regulations

April 5, 2017

April Is Fair Housing Month

April is Fair Housing Month, and a press release from the Department of Housing and Urban Development (HUD) reminds us that 2017 is the 49th anniversary of the Fair Housing Act. We report on these issues here in addition to our usual FHA home loan topics because all borrowers, house hunters, and apartment seekers are protected from being denied housing on a discriminatory basis, but many don’t know or fully understand their rights under federal Fair Housing Act laws. And, as HUD explains, the availability of housing is an important factor in areas far beyond the immediate need of shelter and security. According to a press release at the HUD official site, “This year marks the 49th anniversary of the Fair Housing Act, landmark legislation that became law on April | more...

March 27, 2017

FHA Loans and Co-Signers: A Reader Question

By Joe Wallace

A reader asked us a question about FHA loans and co-signers recently. “If I cosigned for a friend and he refinanced to get everything put in his name and me taken off, am I eligible for an FHA loan for my own home?” FHA mortgage loan requirements refer to co-signer arrangements and “contingent liabilities”. HUD 4000.1 says: “A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment. Contingent liabilities may include Cosigner liabilities and liabilities resulting from a mortgage assumption without release of liability.” If the reader’s circumstances meet that definition | more...

March 20, 2017

Fair Housing Act Settlement With Alpine Bank & Trust

By Joe Wallace

The Department of Housing and Urban Development (HUD) has announced a settlement in a Fair Housing case involving an Illinois lender. According to a press release at the HUD official site, a recent settlement with Alpine Bank & Trust settles allegations that, “the Northern Illinois-based lender discriminated against African American and Hispanic mortgage applicants.” According to the press release, HOPE Fair Housing Center located in Wheaton, Illinois, “filed a complaint with HUD claiming the lender’s business service areas excluded majority African-American and Hispanic neighborhoods”. Fair Housing Act regulations make it illegal for any person or company to discriminate against applicants for non-financial reasons such as race, religion, national origin, family status, gender identity, etc. According to the HUD official site, “HOPE Fair Housing Center alleged the bank’s lack of a | more...

March 7, 2017

Buying A Home From A Family Member

By Bruce Reichstein

Is there a penalty of some kind for purchasing a home from a relative when using an FHA mortgage? A reader asked a question about that recently in our comments section. “I would like to purchase my father-in-laws home. He passed away 2 1/2 years ago. His estate was left to my brother-in-law and my two daughters since I was divorced from his son many years ago and he passed away 17 years ago.” “We have been keeping up and the utilities have been in service since then and we have been keeping the house up cleaning and painting it. The house appraised $109K. My question is: for me to purchase the house through FHA do I have to have been living in the house for a year and the | more...

February 20, 2017

Happy Presidents Day 2017!

By Joe Wallace

Happy Presidents Day! Markets and banks are closed in observance of the holiday, and we pause our usual posts on FHA loan issues and reader questions about FHA mortgages as well. Our regular posting schedule returns on Tuesday. Have a safe and happy holiday and thank you for reading!

FHA One-Time Close Construction Loans In 2019

February 15, 2017

Switching Lenders: The FHA Loan Rules in 2017

By Joe Wallace

Home loans sometimes feature complications. A borrower may decide to cancel the transaction altogether, have a change of mind on certain details of the mortgage, or in some cases switching lenders may be required. What are the FHA loan rules for switching lenders? Borrowers should know that the FHA loan rule book, HUD 4000.1, has some specific instructions in this area. Borrowers can expect the loan rules to function in some very specific ways should this be needed. According to HUD 4000.1: “The original Mortgagee must assign the case number to the new Mortgagee using the Case Transfer function in FHAC immediately upon the Borrowers request” (emphasis ours). The case number mentioned here refers to the FHA-assigned number required to move forward with the mortgage. Having an FHA case number | more...

February 14, 2017

HUD Announces Relief For Louisiana Tornado Victims

By Joe Wallace

Federal relief is available for those affected by tornadoes in Louisiana. On Monday, February 13th 2017, the U.S. Department of Housing and Urban Development (HUD) announced it will “speed federal disaster assistance to the State of Louisiana and provide support to homeowners and low-income renters forced from their homes due to severe storms, tornadoes, and straight-line winds” according to a press release on the FHA/HUD official site. There has been a federal disaster declaration for Livingston and Orleans parishes. “The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in this county” according to HUD.gov. What types of assistance are available? Foreclosure relief, rehab loans, rehab refinance loans, and other options. There may also be assistance from FEMA available to affected home owners. According | more...

February 8, 2017

HUD Charges Oklahoma Landlords With Fair Housing Act Violations

By Joe Wallace

Fair Housing Act laws help protect house hunters no matter what phase of the process they might be at, and it also offers protections for those seeking rental housing. Violations of Fair Housing laws can hinder those hoping to buy with FHA loans, conventional loans or other mortgages at some point, even if they aren’t actively looking to purchase at the moment. That’s why we report on Fair Housing cases from time to time-current and future loan applicants should know their rights and what to do if they encounter unfair treatment along the way. HUD recently announced on its official site that it is bringing charges against Oklahoma landlords for violations of Fair housing law. According to a press release on the HUD site that, “…it is charging the landlords | more...

January 30, 2017

HUD Announces Agreement In Fair Housing Cases

By Joe Wallace

HUD has announced agreements with insurance companies in Ohio and Florida following an investigation into violations of Fair Housing Act regulations. We occasionally devote space to these issues because even in situations where the violations involve rental housing or other non-FHA loan transactions, they can affect borrowers seeking to apply for FHA loans. Some borrowers need rental housing to use in the planning stages of a mortgage before they can purchase a home, others may find themselves forced to house hunt due to job relocations, etc. Fair Housing laws protect Americans at all stages of the process of finding a home regardless of renting or buying. This most recent announcement of Fair Housing action from HUD states, “The U.S. Department of Housing and Urban Development (HUD) announced agreements with two | more...

Will My Home Loan Application Be Approved?

January 27, 2017

Identity of Interest Transactions: An FHA Loan Question

By Joe Wallace

Do you know how FHA loan rules affect the sale of a home deemed an “identity of interest” transaction? A reader asks, “My husband and I have a contract to purchase his parents home that they currently live in. This is their principal residence.” “My loan officer is telling me that even though it is their principal residence and we are purchasing as our principal residence that the 85% LTV cannot be exceeded and we have to put 15% down. Is this correct?? If not, then what can I do to get them to make the exception? We were already pre-approved for 3.5% down.” FHA loan rules governing identity-of-interest transactions do feature a higher down payment requirement in many cases. HUD 4000.1 defines such transactions as follows: “An Identity-of-Interest Transaction | more...