Articles in Category: HUD Regulations

December 21, 2010

Do FHA Loans Have Minimum and Maximum Age Requirements?

There are many myths to dispel about FHA home loans. The most popular ones include the notion that the FHA actually lends money (it doesn't) and the idea that if you earn "too much" money you can't apply for an FHA mortgage (you can). There are also myths about age. According to FHA rules, there is no maximum age limit for FHA borrowers. Anyone who qualifies for an FHA home loan is eligible to apply regardless of how old they are. All income, credit, and occupancy rules apply to FHA borrowers regardless of age, but there is no "cut off" point where the government would refuse to guaranty a loan simply because of how old the applicant may be.

December 16, 2010

HUD Investigates 22 Banks for Alleged FHA Loan Discrimination

By Joe Wallace

One of the things a first time home buyer notices about the FHA loan process is the abundance of rules and regulations designed to protect the borrower from unscrupulous lending practices. Some of those rules are to prevent a buyer from getting cheated or enter into a predatory lending arrangement. But other FHA requirements are in place to make a level playing field for all applicants; all qualified FHA loan applicants must have access to the same industry-standard terms, conditions and quality.

December 15, 2010

What is an Illegal Referral Fee on an FHA Loan?

By Joe Wallace

The FHA requires those who do business with it to follow guidelines and regulations that protect both buyer and lender from unscrupulous practices. But FHA rules aren't all. Congress passed the Real Estate Settlement Procedures Act to prevent the practice of kickbacks and unethical referrals. According to the FHA official site, "RESPA was enacted because Congress felt that consumers needed protection from '... unnecessarily high settlement charges caused by certain abusive practices that have developed"...in some areas of the country."

December 14, 2010

FHA Closing Costs and Loan Origination Fees

By Joe Wallace

n our last blog post we discussed FHA loans and interest rates. Contrary to the impression some first-time home buyers may have, the FHA and HUD do not set or regulate interest rates on FHA mortgages. The FHA doesn't "regulate" closing costs but does have requirements which state lenders may charge what is "reasonable and customary". FHA requirements on closing costs also include the following from the FHA official site" "Aggregate closing costs charged to a borrower may not violate the FHA tiered pricing rules which prohibit a lender from charging higher prices for low balance loans than the lender charges for higher balance loans."

December 6, 2010

FHA Borrowers’ Rights

By Joe Wallace

The FHA has an extensive list of borrowers' rights, all designed to inform and protect government home loan applicants. But what do these rights mean? For the first time home buyer, some of these rights need a bit of explanation--an experienced house hunter is probably more aware of their rights the second time around, and newcomers to FHA home loans should know their rights and obligations before they need them.

December 6, 2010

HUD, FHA Warns of Foreclosure Scams

By Joe Wallace

The Department of Housing and Urban Development and the FHA investigate claims of discriminatory lending practices and policies that violate the Fair Housing Act, but these agencies also warn consumers about an equally vexing problem. Foreclosure scams have always plagued the housing market, but since the housing crisis in 2008 there is greater opportunity for scammers to prey on unsuspecting homeowners trying to avoid losing their investment. The first thing the FHA wants consumers to know about foreclosure avoidance, Obama mortgage information, and counseling services is that help is free. HUD and the FHA warn borrowers that fee-based counseling service is one of the first warning signs. The same applies to those who require a fee in exchange for loan modification--the FHA and HUD both say "beware" in such cases.

November 29, 2010

What are FHA Minimum Property Standards?

By Joe Wallace

As with most government home loans, the mortgages guaranteed by the FHA have minimum property standards which must be met before the FHA will approve the loan. But taken at face value, that statement would lead some to believe the FHA maintains a set of building codes that a home must meet above and beyond (or at least separate from) state and local codes. That was true once upon a time--until the mid 1980s, the FHA did have its own codes for different types of buildings.

November 18, 2010

Home Inspection Advice for FHA Borrowers

By Joe Wallace

FHA appraisals, which are not the same as independent home inspections, are conducted for three reasons. According to the FHA, appraisals are conducted, "To estimate the market value of the property...to make sure that the property meets FHA minimum property requirements...(and) to make sure that the property is marketable." FHA borrowers should pay for an independent inspection of the home for two important reasons--the first being that FHA appraisals will only catch problems that are "readily observable" by the appraiser.

November 17, 2010

Government Home Loans and Anti-Discrimination Laws

By Joe Wallace

The FHA and Department of Housing and Urban Development have an aggressive anti-discrimination policy. FHA home loans are meant for all qualified applicants regardless of race, color, national origin, religion, sex, familial status or disability. Most people are aware that refusing to issue credit, show a home or approve an application for those reasons is illegal. Even in so-called gray areas such as a loan applicant on maternity leave or suffering from a temporary disability that affects the ability to earn a paycheck have been challenged successfully; a lender or real estate agent can't refuse to do business with a qualified applicant in such cases.

November 15, 2010

Who Selects the FHA Appraiser?

By Joe Wallace

When applying for a loan to purchase a home with an FHA mortgage, the appraisal of that home is one of the most important steps in the process. Without an FHA appraisal, the entire process is stalled after a certain point until the job is done. FHA appraisals require the buyer to anticipate fees associated with doing the work, and the seller must anticipate costs associated with repairing items that could lower the appraised value of the property.