Articles in Category: HUD Regulations

October 9, 2015

Know Your Rights Under The Fair Housing Act

Recently we posted about an FHA/HUD press release announcing action against a Pennsylvania landlord who allegedly discriminated against families with children in his rental practices. The same kinds of violations of the Fair Housing Act can occur when trying to buy a home, and such cases are important as awareness-raising tools. When examining these issues, it becomes apparent that many people aren’t fully aware of their rights under the Fair Housing Act. Renters, house hunters, landlords and property owners alike are affected by this important federal law. But what ARE the rules under the Fair Housing Act? You can find a wealth of information at the FHA/HUD official site, which features a page called Fair Housing-It’s Your Right. That page includes (but is not limited to) the following information: “The | more...

October 8, 2015

HUD Charges Pennsylvania Landlord With Discrimination Against Children

By Joe Wallace

In a press release on the FHA/HUD official site, you’ll find the following statement about Fair Housing laws: “The Fair Housing Actmakes it unlawful to deny housing because a family has children under the age of 18 and to make statements that discriminate against families with children. Housing may exclude families with children only if it qualifies as housing for older persons under the Act. The Fair Housing Act permits the familynot the landlordto decide what unit is appropriate or safe for them.” This is mentioned in connection with a case brought by HUD against a Pennsylvania landlord. In a press release (HUDNo.15-123) published recently, we learn, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has charged a Pennsylvania landlord with housing discrimination for allegedly | more...

October 8, 2015

HUD 4000.1: FHA Loan Rules On Escrow Accounts

By Joe Wallace

When the FHA and HUD switched over to the new FHA Single Family Home Loan policy handbook (HUD 4000.1), it restated some policies, redefined others, and made additions where needed. We’ve been examining FHA loan rules as published in HUD 4000.1 over a variety of topics to help borrowers and lenders alike understand FHA policy as it now stands in the new rulebook. One area some borrowers need information on is escrow accounts. FHA loan regulations address the use of escrow, but do not require it. Your lender might, and is free to do so under the FHA Single Family Home loan program, so it’s good to know the rules. The first thing HUD 4000.1 does is to define the term “escrow”: “An Escrow Account is a set of funds | more...

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

October 7, 2015

FHA Loans, HUD 4000.1, and Second Appraisals: When One Can Be Ordered

By Joe Wallace

In our last blog post we discussed FHA appraisals, and the fact that FHA loan rules do not permit the request of a second appraisal simply to raise the value of the property or to eliminate required corrections listed on the original appraisal report. So when can the lender order a second appraisal? What circumstances justify this action? The answer can be found in HUD 4000.1, Section II, Part A. According to this part of the FHA loan rules under “Second Appraisals By Original Mortgagee”: “A second appraisal may only be ordered if the Direct Endorsement (DE) underwriter (underwriter) determines the first appraisal is materially deficient and the Appraiser is unable or uncooperative in resolving the deficiency. The Mortgagee must fully document the deficiency and status of the appraisal in | more...

October 7, 2015

FHA Loan Appraisal Rules: “Second Appraisal” Requests

By Joe Wallace

We get lots of questions about the FHA appraisal process in the comments section. Here is one of the most recent, which raises an important question about “replacement appraisals” or any request for a new appraisal that has to do with a dispute over valuation of the property. The reader asks, “I have a buyer who is buying a home. The home they are buying already had an appraisal completed. That deal fell through and my buyers offer was accepted. The sellers agent said that the original appraisal came in short and asked that we order a new one.” “He said his seller insists on a new appraisal because the original one done a few week before was less that the purchase price. Is is possible to request a new | more...

October 5, 2015

FHA Loans For Non-Permanent Resident Aliens

By Joe Wallace

In our previous post we discussed the fact that United States citizenship is not required for borrowers who want to apply for an FHA home loan. A valid Social Security number is required, and there is a U.S. residency requirement that also needs to be met. That means that a variety of people who are not or are not yet citizens have a chance for an FHA home loan if they meet certain requirements (including proof of a valid SSN). The FHA loan rules for non-permanent resident aliens can be found in HUD 4000.1 Section II Part A, which lists the following instructions to the lender: “A Borrower who is a non-permanent resident alien may be eligible for FHA insured financing provided: –the Property will be the Borrowers Principal Residence; | more...

October 5, 2015

FHA Loan Rules, Citizenship, And The New HUD 4000.1 Rule Book

By Joe Wallace

In our comments section, a reader asked if citizenship is a necessity in order to get an FHA home loan. The reader mentioned that he was in the process of getting a Green Card, and that he had a valid Social Security Number. Do FHA loan rules as published in the new HUD 4000.1 permit this reader to apply for a new FHA mortgage loan even though he is not a United States Citizen? The answer is yes–citizenship is NOT a requirement to apply for an FHA mortgage. Proof of a valid Social Security Number is, and since the reader indicated that he had a valid SSN, the only thing needed to move forward is to find a participating FHA lender and fill out the loan application paperwork. Assuming, of | more...

September 30, 2015

FHA Single Family Home Loan Policies: Credit Qualifying Under HUD 4000.1

By Joe Wallace

With the publication of HUD 4000.1 in its entirety, FHA single family home loans have a new policy handbook. It contains existing policy, revised or amended loan rules, and other changes that are relevant when it comes to applying for a single family home loan or refinance loan. With the new rule book, we’re examining the contents of those rules in a variety of areas to show the current state of FHA loan rules, credit requirements, appraisal rules and other important topics. Let’s examine some basics of qualifying for an FHA mortgage under the new rulebook. In general, HUD 4000.1 instructs the lender, referred to here as “the mortgagee”, as follows: “The Mortgagee must obtain a credit report for each Borrower who will be obligated on the mortgage Note. The | more...

September 26, 2015

FHA Loan Rules In HUD 4000.1 And Past Mortgagee Letters From FHA/HUD

By Joe Wallace

When the new FHA single-family home loan policy hand book (HUD 4000.1) took effect, it became the official go-to reference for FHA single family new purchase loans and refinance loans. That means that the old FHA loan rule books for single family transactions, including HUD 4155.1 and HUD 4155.2, became inactive as of the launch date for HUD 4000.1. It also means that a large amount of previous FHA/HUD correspondence also became inactive. The FHA/HUD official site has an archive of all FHA mortgagee letters (ML for short, which feature policy changes, updates, modifications, etc.) but there are many of those that are now inactive, superseded by HUD 40001. There is no way to list all the mortgagee letters, handbooks, and other items that have been made inactive, but the | more...

September 25, 2015

HUD 4000.1 Questions: FHA Loans For Homes In Flood Zones, Flood Insurance

By Joe Wallace

With the publication of HUD 4000.1, the new Single Family Home Loan handbook, there have been plenty of changes, alterations, restatements of policy and other issues borrowers and lenders alike should be aware of. We’re examining some of the most frequently asked questions about policies found in HUD 4000.1 to help borrowers and lenders know what current policy, as found in the new handbook, is on specific issues. One of those issues has to do with flood insurance and flood zone determination. FHA loan rules have standards for new construction and existing construction homes; let’s examine what the rules in HUD 4000.1 say about flood insurance for existing construction. According to the FHA official site, rules for flood insurance include the following requirement of the lender: “The lender must determine | more...