Articles in Category: HUD Regulations

June 2, 2011

FHA Loans: How Do I File A Complaint About Closing or Settlement Issues?

FHA loans have a variety of rules and regulations about closing and settlement of FHA insured mortgages. Borrowers are protected under the Real Estate Settlement Procedures Act against fraud and shady business practices including kickbacks, artificially inflated fees and costs, and other problems. Thanks to state and federal laws, it’s more difficult than ever to take advantage of an FHA loan applicant or inflate the costs associated with an FHA home loan.

May 30, 2011

FHA Minimum Property Requirements (Part Two)

By Joe Wallace

In our last blog post we discussed FHA minimum property requirements. Any home a buyer wants to make a serious offer on with an FHA insured loan must live up to the FHA’s minimum property standards or the loan cannot be approved. That doesn’t mean the home must be 100% in compliance when the appraiser comes to review the property, but it does mean that any deficiencies found must be corrected prior to the loan being closed upon. The FHA has three basic principles that guide an FHA appraiser when examining the home–it must be safe, sound, and secure. There are specific requirements in each area. For example, a home must not have stairways that aren’t equipped with hand rails, there must be no exposed wiring in the home, and | more...

May 30, 2011

FHA Loans: Minimum Property Requirements

By Joe Wallace

First-time applicants for an FHA mortgage learn soon learn about the FHA’s list of minimum property requirements, which any property bought with an FHA insured loan must live up to in order to get loan approval. The FHA has three guiding principles that inform its list of minimum property requirements, defined by what some appraisers call “the three S’s” which include safety, soundness and security. An FHA appraiser will come to inspect the property a borrower wants to buy, looking at the home to make sure it meets the FHA standards in each of these three areas. When it comes to safety, the FHA tells its appraisers, “Deficiencies or a lack of functioning components of plumbing, electrical or heating and cooling systems may create hazards that could be considered health | more...

May 17, 2011

FHA Loans and Citizenship Status

By Joe Wallace

FHA loans are designed to help people achieve the American dream of home ownership in an affordable way. But does that help with part of the American dream extend to those who aren’t citizens of the United States? According to the FHA official site, “Citizenship of the United States is not required for eligibility. When a mortgage loan applicant indicates on the loan application that he or she holds something other than U.S. citizenship, the lender must determine residency status from the documentation provided by the borrower.” FHA rules allow lawful resident aliens to apply for FHA home loans. There are two types–permanent, and non-permanent resident aliens. Regardless of which status an applicant falls in, the FHA does have procedures to document and verify status so the loan application may | more...

May 16, 2011

FHA Loans: Can a Parent and Child Apply for an FHA Mortgage Together?

By Joe Wallace

There are many situations where a parent and child may wish to apply for an FHA insured home loan together. One of those is where a parent co-borrows on an FHA loan for the child in college, purchasing what some in the real estate industry call a “kiddie condo”. In such cases, the parent co-borrows on the loan but does not occupy the property. In most cases an FHA loan with a non-occupying co-borrower would be limited to 75% of the loan-to-value ratio, rather than the maximum loan amount. But FHA rules say when it comes to family members, the rules are different. A parent and child can take out an FHA home loan and get the maximum amount of FHA financing available (as long as the borrowers otherwise qualify). | more...

May 12, 2011

FHA Rules on Non-Occupying Co-Borrowers

By Joe Wallace

In our last blog post we discussed FHA options that apply to military members who might explore FHA insured loan options when a VA loan isn’t available. Military families often face unique circumstances which affect the ability to meet some obligations as an FHA home loan applicant. For example, a military member could be sent to a war zone for an extended period of time–which could lead to worries about fulfilling FHA occupancy requirements. Such situations are usually covered under FHA rules and don’t necessarily mean problems with an FHA mortgage. FHA rules also address circumstances a borrower might find themselves in when applying for an FHA insured loan with a non-occupying co-borrower. Did you know FHA requirements state that all non-occupying co-borrowers and/or co-signers must have a principal residence | more...

April 26, 2011

FHA Home Loan Interest Rates

By Joe Wallace

One of the most common misconceptions of the modern FHA loan program is that FHA or HUD is responsible for setting interest rates on the home loans insured by an FHA loan. It’s easy to understand why some might think that is true; the FHA does place limits on certain fees, how closing costs and down payments are paid and by whom. Why wouldn’t the FHA also regulate the interest rates of an FHA-insured mortgage? The FHA does regulate (but does not set) interest rates in some cases. Any FHA-insured adjustable rate mortgage, for example, has built-in limits on when the rates can be adjusted, and how often. There are even caps on how many percentage points may be changed over the lifetime of the variable rate loan. But what | more...

April 22, 2011

Does the FHA Impose Minimum Employment Standards?

By Joe Wallace

When an FHA loan applicant fills out the loan app, employment and

April 19, 2011

FHA and HUD Turn Up the Heat on Mortgage Scammers

By Joe Wallace

Recent announcements by the FHA and HUD have increased the pressure on housing market scammers, but consumers should still be on the lookout for warning signs of a scam artist at work. The most recent announcement from FHA/HUD comes in Mortgagee Letter 2011-17, which revises HUD

April 19, 2011

New HUD Awareness Campaign Targets Foreclosure Con Artists

By Joe Wallace

FHA borrowers have a new resource to look to in order to become more educated borrowers and avoid foreclosure scams. The Department of Housing and Urban Development has announced a new awareness campaign called Know It. Avoid It. Report It. According to an April 18, 2011 HUD press release, the campaign has launched in Miami, Chicago and Los Angeles and has two missions; one to direct homeowners in financial trouble toward reputable counselors and anti-foreclosure resources, the other to get the help of homeowners to shut down scams and con artists. The HUD press release warns home owners, “Newly deceptive scam artist tactics lure homeowners into misleading agreements. Their tactics include giving the false impression that they are affiliated with the government, charging illegal up-front fees, and executing fraudulent lease-back, | more...