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Articles in Category: HUD Regulations

Revised FHA Loan Housing Counseling Rules Now In Effect

In our last post, we discussed the HUD press release announcing funding for housing counseling services across the country. Earlier this month, new FHA loan rules took effect which affect a lender’s responsibility to inform borrowers of  housing counseling services. The services affected by the new FHA loan rules are intended for those who are at risk of foreclosure on FHA mortgages. According to FHA Mortgagee Letter 2015-04, lenders are required to: “…provide delinquent borrowers with a notice describing the availability of housing counseling offered by HUD-approved housing counseling agencies and by the mortgagee. Mortgagees are currently required to prepare such a notice that provides the information required by FHA.” The lender is required to Mortgagees give affected borrowers all the information included in an FHA/HUD publication titled, “Notification to | more...

 
When Is An FHA Loan Better Than A Conventional Loan?

April Is Fair Housing Month

April is Fair Housing Month. The FHA and HUD have made announcements every year at this time to raise public awareness of fair housing laws such as the Fair Housing Act and FHA/HUD policy for equal housing access for all regardless of gender, race, national origin, belief, sexual orientation, disability, family status, etc. “Every American deserves a fair chance to secure safe and stable housing,” said HUD Secretary Julián Castro, who was quoted in a new mortgagee letter published by the FHA/HUD. “At the core of everything we do to improve housing opportunities is a firm belief that no family should ever be denied the opportunity to own or rent a home because of what they look like, where they come from, how they get around, how they speak, who | more...

 

Basic FHA Loan Eligibility Requirements

We get many questions about FHA loans–questions about FICO score requirements, questions about credit and income, residency, etc. The FHA official site (www.fha.gov) has many answers to these questions–but what ARE the basic requirements for an FHA mortgage? FHA loan rules specify a minimum FICO score needed to qualify for maximum financing, and a minimum FICO score for basic eligibility with a larger down payment in cases where the applicant’s FICO score is close to the margins of acceptability. “FHA insures mortgages” the official site says, “made by approved lenders to individuals and nonprofit and government agencies that are approved to participate in HUD’s programs; HUD does not loan money to homebuyers.” The FICO score requirements mentioned previously (580 for maximum financing, and FICO scores above 500 for program eligibility | more...

 
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FHA/HUD Announce Trial Payment Plan Details

The FHA and HUD have announced details about a trial payment plan for qualified borrowers who are in trouble on FHA home loans. The FHA mortgagee letter 2015-07, “Trial Payment Plans Associated with HUD’s Loss Mitigation Loan Modification Options for Forward Mortgages” informs lenders of certain details of the program and the conditions where the FHA views a trial payment plan (TPP) as a failure. According to the mortgagee letter, “The Trial Payment Plan Agreement is a written agreement to be executed by all parties on the original note, all parties on the FHA-insured mortgage, and all parties that will be subject to the modified mortgage and/or partial claim, except where: –a borrower or co-borrower is deceased; –a borrower and a co-borrower are divorced or legally separated; or –a borrower | more...

 
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FHA Loan Questions: Going Back To Full-Time Employment After Owning a Small Business

A reader asks, “Can I qualify for a Back to Work Loan if I lost a job and then when I couldn’t find work, started a business with a partner. Two years later the partnership breaks up and I am forced to pursue full-time employment.” “During the time that I operated the business, my draws reflected a greater than 20% net loss. Now that I am employed full-time, my earnings are the same or greater than the earnings I made prior to losing my job. Also the business is still operated by my former business partner.” Questions like these are difficult to answer except in general terms. The lender’s standards will play a role in loan approval, so it’s unclear above and beyond FHA loan minimum requirements what the answer | more...

 

FHA Loan Approval or Rejection: The Notification Rules

When a borrower applies for an FHA home loan for the first time, it’s normal to wonder how long it might take and how the borrower might be contacted when the decision has been made. When it comes to the length of time to process the loan, there is no set answer–it can depend a great deal on the lender’s workload, how easy or difficult it is to track down a borrower’s credit information, etc. But once a decision has been made, FHA loan rules in HUD 4155.1 tell the lender how to proceed. Once the decision has been reached, FHA loan rules state, “The lender is responsible for notifying the borrower of the approval, either in writing or verbally, immediately after receipt of the underwriter’s decision.” That is found | more...

 
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FHA/HUD Issues More Guidance On Equal Access Rules

We’ve seen a number of headlines recently on the FHA and HUD’s position on Equal Access laws. Now there is additional guidance coming on the heels of what’s already been released. On Monday, February 23 2015 the FHA and HUD issued a new press release announcing further clarification of its Equal Access rules which prohibit discrimination based on sexual identity, gender identity and related factors. According to HUDNo.15-023, “The U.S. Department of Housing and Urban Development (HUD) issued guidance to better serve LGBT Americans seeking to obtain a home loan and transgender individuals seeking access to homeless shelters. These two sets of guidance will help clarify the Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Rule (Equal Access Rule), which was published in 2012. | more...

 
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FHA Equal Access Loan Rules Updated

In recent weeks, we’ve reported on the FHA and HUD’s update to Equal Access guidelines as listed in FHA Mortgagee Letter 2015-05. One important area of that mortgagee letter we haven’t written about yet is the FHA and HUD’s authority for changing its Equal Access rules. To review, ML 2015-05 was issued to update its rules for Equal Access for all regardless of sexual orientation or gender identity. According to the mortgagee letter: “On February 3, 2012, HUD published a final rule entitled Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity (77 FR 5662) (“Equal Access Rule or “rule”). The final rule ensures that housing across HUD programs are open to all eligible individuals regardless of actual or perceived sexual orientation, gender identity, or | more...

 

FHA Loan Reader Questions: Buying A Home “Under False Pretenses”?

A reader asks, “I was trying to get answers on what to do if you have brought an house under false pretenses… There’s alot of issues with the house that wasn’t disclosed in the property disclosure form.” FHA home loans require an appraisal as a condition of loan approval. The appraisal establishes the fair market value of the home, but it also insures the home for sale meets FHA minimum property requirements. However, passing the FHA appraisal process is not a stamp of approval from the FHA nor is it a guarantee that a home is free from defects. Borrowers are strongly encouraged by the FHA and by real estate experts to pay for a home inspection prior to committing to the sale of a property. The home inspection, when | more...

 
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FHA/HUD Update “Equal Access” Rules

The FHA and HUD have issued a new mortgagee letter updating the FHA/HUD policy of equal access for all FHA/HUD programs. FHA Mortgagee Letter 2015-05, “Notice of Program Eligibility for HUD Insured Housing Programs for All People Regardless of Sexual Orientation, Gender Identity or Marital Status as Required by HUD’s Equal Access Rule” contains some very important updates since the original equal access guidelines were published back in 2012. According to the Mortgagee Letter, “On February 3, 2012, HUD published a final rule entitled Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity (77 FR5662) (“Equal Access Rule or “rule”). The final rule ensures that housing across HUD programs are open to all eligible individuals regardless of actual or perceived sexual orientation, gender identity, or | more...