Articles in Category: HUD Regulations

November 24, 2014

FHA Condo Approval Rules: A Reader Question

A reader got in touch recently with a lengthy question, asking: “Our HOA board is considering revising our declaration dated 4/06/84. Our building was built in 1960 as an 11 story apartment building and transformed into a condo building in 1984. There are 50 units in the building– approximately 27 percent are rental properties. Our building has FHA certification. As units are sold, investors buy them as rental units.” “We would like to reverse this trend by revising our declaration to state that as units are sold, they are sold as owner occupied units. The revised declaration would provide that owners could obtain a temporary rental permit from the HOA board enabling the owner to rent two years within a five year period. Also new owners must occupy their unit | more...

November 21, 2014

FHA Loan Reader Questions: Non-Functioning Wells

By Joe Wallace

A reader asks, “I bought a home with FHA loan and a well system and septic. Later found the well was a spring box system and not on the property we were forced to buy the property seperate from the house .” “The well has never worked and runs out all the time , i was told that FHA wouyld be inspecting the well system prior to closing , but now we have asked for the inspection and it was never done on the well or the septic systm . Any ideas on where to get help?” It may simply be a case of the way this reader question was worded, but it’s worth pointing out that the FHA itself does not perform well inspections, or similar services. An FHA | more...

November 20, 2014

FHA Mortgage Rate Trends

By Joe Wallace

Since our last report on FHA mortgage rate trends, we’ve seen a general downward trend in mortgage interest rates, but with the range we’ve been reporting (best execution) remaining. Borrowers have in some cases seen the gains reflected in lower closing costs rather than the actual interest rate changing itself, while other borrowers may indeed have experienced an adjusted interest rate based on improvements than sent best execution rates back into month-long lows. 30-year fixed rate conventional mortgages have, best execution-wise, remained in their range between 4.0 and 4.125%, though some very well qualified borrowers may have gotten access to sub-four percent rates depending on the lender and the timing of the rate lock. But that doesn’t mean that all borrowers had that option–the rates we report on here are | more...

November 18, 2014

FHA Extends Program For Underwater Home Owners

By Joe Wallace

The FHA has announced an extension to a program started to help borrowers who are underwater on their mortgages. FHA mortgagee letter 2014-23 describes the original “FHA Refinance of Borrowers in Negative Equity Positions” program started in 2010 which, according to the FHA/HUD official site, “provided enhancements to the Federal Housing Administration (FHA) refinance program that gave a greater number of responsible borrowers an opportunity to remain in their homes.” These FHA enhancements were designed, “to maintain homeownership by providing borrowers, who owe more on their mortgage than the value of their home, opportunities to refinance into an affordable FHA loan. This opportunity allowed borrowers to qualify for an FHA refinance loan provided that the lender or investor wrote off the unpaid principal balance of the original first lien mortgage | more...

November 17, 2014

FHA Loan Answers About FICO Scores And Credit Requirements

By Joe Wallace

We’ve fielded a variety of questions recently about FHA home loans when it comes to FICO scores and credit requirements. There are several issues to be aware of when it’s time to start preparing for an FHA mortgage loan, or any kind of major credit application. One of the first questions you should answer for yourself at the start of your journey to buying a home with an FHA mortgage is, “How much time do I have?” Are you trying to plan for a loan that you want to apply for in a matter of months? If so, a revision of your timeline may be in order–finance experts recommend taking at least 12 months to plan for a new home loan. Why? Saving up for closing costs and other expenses | more...

November 12, 2014

FHA Mortgage Rate Trends: Up and Down

By Joe Wallace

Since our last report on FHA mortgage rate trends, we’ve seen some ups and down with mortgage loan rates in general, but the overall trend seems to be upward. Last Friday was a highly anticipated jobs report, and ahead of that last Thursday we saw rates hold steady. After the report came out on Friday mortgage loan rates did gain back some of the ground lost earlier in the week, but come Monday those gains began slipping away again. Tuesday was Veterans Day so markets were closed and there was no rate movement to report–but on Wednesday it was a bit of false hope to start the day with rates beginning stronger but ultimately weakening by day’s end. What does all this mean? At the time of this writing, 30-year | more...

November 11, 2014

Happy Veterans Day 2014

By Joe Wallace

Today we pause from our usual routine of writing articles and answering your questions about FHA home loans, refinance loans, and reverse mortgages to remember the veterans who serve our country. Veterans Day is a special time for us to remember all those who serve the country at home and overseas. We owe many, many thanks to the men and women who sacrifice so much to protect our freedoms. Thank a veteran today and remember their service. Vets, from all of us, thank you for serving your country. Our regularly scheduled posts resume tomorrow. HAPPY VETERANS DAY 2014!

November 10, 2014

FHA Loan Down Payment Rules: A Reader Question

By Joe Wallace

A reader asks, “Do to my losing my job in 2011, I had my second home foreclosed on. I now live in my manufactured home on 2 acres here in Florida which is paid for. Up to my job lost, I have had great credit. I’m looking into buying a new manufactured home because my wife and I have our 2 adopted grandchildren now.” “An obvious question would be if we would be able to get a FHA home loan; and also, could our land be used as partial down payment?” FHA loan rules include a discussion on funds needed to close the deal. FHA loan rules in HUD 4155.1 state, “For purchase transactions, the maximum LTV is 96.5% percent (the reciprocal of the 3.5% required investment).” That means the borrower must | more...

November 6, 2014

FHA Loan Interest Rate Trends

By Joe Wallace

FHA mortgage loan rates are on the rise this week following upward pressure that started late last week after the Fed made an important announcement. The Fed decided to end Quantitative Easing, which is essentially a government stimulus program that invested in markets and helped keep mortgage rates lower thanks to those investments. Last week, when the end of the program was announced, investor reaction to the news put upward pressure on mortgage loan rates in general, kicking off a trend that continued late into the week resulting in four week highs for rates by 3 November. The numbers you’ll see reported below are listed as best execution rates, but suffice it to say that mortgage loan rates across the board have been affected by current conditions. For much of | more...

November 6, 2014

HUD Resolves American Bank Housing Discrimination Case

By Joe Wallace

The FHA and HUD have announced a resolution in a housing discrimination case brought by HUD against a Maryland-based lender. According to HUDNo.14-139, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has entered into an Initial Decision and Consent Order with American Bank, resolving HUD’s charge that the Rockville, Maryland-based lender discriminated against applicants with disabilities when it allegedly required applicants to provide documentation regarding their disabilities and attempted to obtain information about the nature and extent of those disabilities.” Federal Fair Housing laws state that it is a violation of federal law to discriminate against borrowers, “in the terms and conditions of a loan to an individual based on a disability, including imposing different application or qualification criteria. The Fair Housing Act also makes it | more...