Articles in Category: HUD Regulations

When Is An FHA Loan Better Than A Conventional Loan?

June 24, 2015

FHA Loan Minimum Property Standards

When you’re shopping for the home you want to purchase with an FHA mortgage, it’s logical to wonder what kinds of standards the property must meet in order to qualify for an FHA loan. FHA minimum standards address a variety of issues including a home’s location, its condition, and how the current state of the home may affect its future value. At the time of this writing, HUD 4155.2 Chapter Four has a set of basic standards that guide the FHA appraiser, which start with the following: “The site conditions of a property must be free of health and safety hazards.” That’s followed by some guidance on homes with lead-based paint. “If the property was built before 1978: –the seller must disclose known information on lead-based paint and lead- based | more...

June 18, 2015

FHA Loans For LGBT Borrowers: Equal Access Guaranteed

By Joe Wallace

During the month of June, the FHA/HUD official site has posted several things about Fair Housing rules that pertain to members of the LGBT community. Did you know that FHA and HUD rules require equal access for all financially qualified applicants and that you cannot be discriminated against in the housing process for non-financial reasons, including identifying as LGBT? And that’s not limited to FHA loans or refinance loans. According to the HUDdle blog at HUD.gov,” In 2010, HUD formally adopted the principle that gender identity discrimination is sex discrimination under the Fair Housing Act. This means that when HUD receives a fair housing complaint that alleges discrimination because someone does not conform to gender stereotypes, HUD now begins a formal investigation under the Fair Housing Act.” Since issuing this | more...

June 17, 2015

Home Loan Disclosure Changes Coming August 1, 2015

By Joe Wallace

On August 1, 2015, new federal laws will require changes to loan information disclosures that are designed to make borrowers more fully informed. The new requirements affect FHA, VA, conventional and any other type of mortgage loan. The new requirements, announced by the Consumer Financial Protection Bureau, “…will simplify and improve disclosure forms for mortgage transactions. Consumers currently receive different, but overlapping federal disclosure forms with the terms and costs of mortgage loans.” That overlap proves confusing for borrowers, especially those who have never purchased or refinanced a home loan before. Two new forms replace the set of previously required disclosures. According to CFPB.gov, these new forms are, “the Loan Estimate, given three business days after application, and the Closing Disclosure, given three business days before closing.” CFPB says all | more...

June 16, 2015

FHA Mortgage Loan Interest Rate Trends: Holding Steady Ahead Of Fed Announcement

By Joe Wallace

Mortgage loan interest rates are holding steady ahead of an important and much anticipated announcement by the Fed on Wednesday. The Fed does not set mortgage loan interest rates, but as we have seen in the past with the Fed’s handing of Quantitative Easing (QE) that Fed announcements can and do cause a reaction in the markets that directly affect mortgage loan rates. So Wednesday will definitely be a day to watch. At the time of this writing, we’re seeing some sources report best execution rates for 30-year fixed rate conventional mortgage loans at 4.125%, though others offer a best execution range with 4.25% at the top and 4.125% at the bottom. If the Fed were to announce a rate hike on Wednesday, that could bring higher mortgage loan rates | more...

June 12, 2015

HUD Secretary Castro on LGBT Month

By Joe Wallace

On the FHA/HUD official site, there’s a blog post by HUD Secretary Julian Castro, which announces that June is Lesbian, Gay, Bisexual, and Transgender Month, described by Castro as, “a time to recognize the lasting contributions that these Americans have made to our nation, and to honor the progress thats been achieved in securing equal opportunity for all.” He adds, “Right now, were in the midst of a period of transformative change. In recent years, barriers that once blocked too many of our fellow Americans from living and loving freely have come tumbling down. In 2013, the Supreme Court struck down the Defense of Marriage Act, helping ensure that all couples are treated fairly under the law. Same-sex couples are now able to get married in 37 states. And earlier | more...

June 11, 2015

FHA Policy On Cancelling Monthly Mortgage Insurance Premiums

By Joe Wallace

One commonly asked question about FHA loans involves when and how a borrower can stop paying FHA Monthly Mortgage Insurance Premiums. The information we’re discussing here does not apply to Private Mortgage Insurance, which something different than FHA Mortgage Insurance Premiums. Since we’ve mentioned Private Mortgage Insurance, borrowers who have it, (called PMI for short) should know the following as published on the government website, ConsumerFinance.gov: “The Homeowners Protection Act gives you the right to request that your lender cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. This date should have been given to you in writing on a PMI disclosure form when you received your mortgage. If you | more...

June 10, 2015

HUD Settlement In North Miami Beach Condo Housing Discrimination Case

By Joe Wallace

Housing discrimination is a violation of federal law. Sometimes that discrimination happens at the time a borrower applies for a home loan, other times it happens when the house hunter is looking for a home. But what about situations where a borrower has applied for a home loan, FHA or otherwise, closes the deal and moves in, only to find discrimination waiting for them once they are legally occupying the property? Such a case recently made headlines in North Miami Beach. The HUD official site has announced a settlement in a housing discrimination case in Florida. According to the HUDNo. 15-069, “The U.S. Department of Housing and Urban Development announced today an agreement with a North Miami Beach condominium association settling allegations its board president harassed and made discriminatory remarks | more...

June 8, 2015

FHA Appraisals and Loan Approval

By Joe Wallace

When you are ready to commit to buying a home with an FHA mortgage, one of the big steps toward making that happen is the appraisal process. Borrowers sometimes confuse FHA appraisals with a home inspection, but the appraisal is not a complete, top-to-bottom review of the home. A property may be appraised and approved for the loan, but still contain issues unknown to the borrower. That is why a home inspection is so important. How does the appraisal process work? An assigned FHA approved appraiser comes to the home and personally walks through it, noting any obvious defects in workmanship, code compliance issues, and other things that could require attention as a condition of FHA loan approval. Sometimes there are no issues and the home “passes” the FHA appraisal | more...

June 3, 2015

The FHA Appraisal Process–How Does The Lender Choose Your Appraiser?

By Joe Wallace

The FHA appraisal process is different than the home inspection process. For example, the home inspection is an optional but strongly recommended part of the home buying journey that the borrower is responsible for. You should never purchase a home without hiring a home inspector to review the property. An FHA appraisal–the mandatory, but not exhaustive review of the home–is carried out an an FHA appraiser. This appraiser, according to HUD 4155.2 Chapter Four, is hired as a third party by the lender. Did you know there are FHA loan rules that guide the lender in how an FHA appraiser is to be chosen? According to Chapter Four, the lender must recognize that not all appraisers are equal in skill or experience. “An appraiser who is primarily experienced in appraising | more...

June 3, 2015

Initial Steps to Your FHA Home Loan

By Joe Wallace

There are many steps to purchasing a home with an FHA mortgage loan. House hunters don’t normally begin this process by picking up the real estate listings or exploring them online; house hunting is a process that should begin at least a year in advance of buying the home with an FHA loan with financial planning. Getting Your Finances Ready For An FHA Loan Preparing for your loan application a year in advance is strongly recommended. You’ll need to check your credit scores and make sure you bring a minimum of 12 months worth of on-time payments on all your financial obligations to the application process. Doing anything less can hurt your chances for loan approval. It’s important to remember that your lender will check the amount of debt against | more...