Articles in Category: HUD Regulations

October 2, 2014

FHA Loan Credit Report Requirements

When you apply for a home loan, it helps to know what the lender is looking for from your credit report. When it comes to FHA mortgages, the lender wants to see 12 months of on-time payments on your financial obligations as well as the actual numbers of your credit scores as reported by the three major credit reporting agencies. But what does the FHA require from those credit reports? What does the lender need in order to properly document you as a good credit risk? The FHA loan rules for credit report delivery and content are found in HUD 4155.1 Chapter One Section C. A quick glance at this section reveals that credit reports cannot be delivered to the lender from third-parties including the borrower. The credit reporting agency | more...

October 1, 2014

FHA Single-Family Home Loan Occupancy Rules

By Joe Wallace

FHA loan rules for single family home loans include an occupancy requirement. This requirement is designed to encourage single-family borrowers and exclude investors from using single-family FHA mortgage loans to purchase investment property. Why? The intent of the single-family home loan program is to help eligible borrowers get into affordable housing using a low-cost, lower-than-conventional loan interest rate. These rates are not intended to help investors buy property for non-occupying rental or outright sale. What are the FHA loan rules for occupancy? The full explanation of the rules can be found in HUD 4155.1 Chapter Four Section B, which starts off by defining what a “principal residence” is. A home purchased with a VA mortgage is required to be used as the principal residence, so it’s good to know what | more...

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

September 30, 2014

FHA Mortgage Insurance: A Reader Question

By Joe Wallace

A reader asks, “Mortgage companies have kept sending letters/emails, saying ‘You no longer pay MIP because FHA MIP policy has been changed since May 2014. You have paid unnecessary MIP payments because since you has refinanced for your home 2012.'” “I refinanced my home mortgage through FHA in Mar.2012 and since then I have paid MIP until principal reach less than 78%. It will be by 2019 according to my mortgage company. Can you clarify ‘Revision of Federal Housing Administration (FHA) policies concerning cancellation of the annual Mortgage Insurance Premium (MIP) and increase to the annual MIP’? Dose cancellation of MIP mean ” home buyers who apply finance through FHA do not need to pay MIP? Should I stay with my current mortgage or refinance?” This reader question refers to | more...

September 26, 2014

FHA Mortgage Rate News For The Week of September 22 2014

By Joe Wallace

September has been a rough month for FHA mortgage loan rates–there’s been an upward trend fueled at least in part by the recent Fed policy statement, which many anticipated as a possible indicator of where rates might be headed (predicting investor reaction to an announcement that indicated a stronger or weaker economy). But this week, we saw rates moving lower–the best execution numbers haven’t really changed, but the downward trend is a welcome one. In many cases borrowers will see the lower moves reflected in closing costs rather than in actual lower interest rates, but if the downward movement continues we may well see FHA rates shift out of their current range of numbers and back into the lower best execution rate of 3.75%. The downward trend we saw this | more...

September 22, 2014

Fair Housing Act Violations: A Reader Question

By Joe Wallace

A reader asks, “I am trying to sell my manufactured home and the land it sets on to a couple that are not married from California, the lienholder refuses to do this because they are not married, isn’t this a violation of Federal Law?” The Fair Housing Act makes it illegal to discriminate against a house hunter–a buyer or renter–based on family status. That includes being married, not married, a single parent, etc. The Department of Housing and Urban Development official site (which is also home to the FHA official site) states the following basic information on the Fair Housing Act: “The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use | more...

September 19, 2014

HUD Announces Settlement In North Dakota Housing Discrimination Case

By Joe Wallace

We post news stories about settlements in housing discrimination cases for several reasons, but one of the most important is to remind borrowers that FHA loan applications aren’t immune from problems such as these. The first line of defense against continued violations of the Fair Housing Act usually comes in the form of complaints filed against companies that violate federal law. With that in mind, we bring news of a recent settlement between HUD and a North Dakota company over housing discrimination complaints. According to press release HUDNo.14-106, ” The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached an agreement with U.S. Bank National Association, U.S. Bank subsidiary Red Sky Risk Services, LLC (formerly known as USB Lending Support Services, LLC), and one of | more...

September 18, 2014

FHA Minimum Property Requirements: Central Air

By Joe Wallace

A reader asks, “I am trying to purchase a home with an FHA loan. The central air in the house I’m trying to purchase is not working, however, the owner has window units in each room. They all work and cool the house very nicely. I was planning on replacing the central air after purchasing the home. I’ve been told the house will not qualify because the central air is not working. Won’t the window units suffice as meeting the minimum standards of living?” One interpretation of the FHA minimum property standards in this situation would be that it’s not the presence of the window units in the home that would be the issue, but rather than an installed appliance/system in the home is not functioning properly. The home may | more...

September 18, 2014

FHA Mortgage Rate News For The Week of September 15 2014

By Joe Wallace

We’ve seen recent trends in FHA mortgage loan rates towards higher numbers, but this Wednesday was a much anticipated day for the rates as investors and market watchers waited to hear the Fed made a policy announcement. The announcement did put upward pressure on rates, but we’ve seen some important movement in them already– September 12 was the day when best execution rates for FHA mortgage loans were pushed out of the previous single number comfort zone of 3.75% and back into a range of rates between 3.75% and 4.0, best execution. This is the first time in many weeks, if not months, that we’ve seen rates for FHA mortgages (best execution) move back into the 4% zone. On Wednesday, September 17, the range of FHA loan rates persisted, thanks | more...

September 17, 2014

HUD Announces Settlement in Housing Discrimination Case

By Joe Wallace

The FHA/HUD official site recently issued a press release stating there was a settlement in a housing discrimination case involving a home loan applicant on maternity leave. According to HUDNo.14-105, “The U.S. Department of Housing and Urban Development announced today that Jackson, TN-based mortgage lender FirstBank Mortgage Partners will pay $35,000 to settle allegations that it violated the Fair Housing Act when it denied a mortgage loan to a couple because one applicant was on maternity leave.” Federal housing laws forbid lenders from discriminating against home loan applicants, “in the terms, conditions, or privileges associated with the sale or rental of a dwelling on the basis of sex or familial status, including denying a mortgage loan or mortgage insurance because an applicant is pregnant or on maternity leave.” According to | more...

September 12, 2014

FHA Condo Loan Questions

By Joe Wallace

A reader asks, “I live in a condominium of 275 homes. We are getting complaints from mortgage companies that we are not FHA approved. We meet all legal guidelines that are required just not for FHA approval.” “We were told by someone that FHA has just recently stopped approving condos for mortgages, is this true? Also what is the percentage of FHA approved condos in Pennsylvania and what is the percentage of FHA approved condos in the entire United States. We have been told it was 10-20 percent. Also what are guidelines that a HOA must meet to be approved for FHA if it were to be considered. Thank you for your help in advance.” We have seen no guidance from the FHA stating that condos would no longer be | more...