Articles in Category: Special FHA Programs

November 13, 2019

Build A Home On Your Own Land With A One-Time Close Construction Loan

A construction loan to build a house on your own land is not out of reach even for a first-time homebuyer. There are multiple options for building a home from the ground up; you can apply for an FHA One-Time Close loan, a VA construction loan, and there are even USDA construction loans that allow qualified borrowers (this is a need-based loan) to build a house instead of buying an existing one. But there are some mistakes some house hunters make when pursuing a construction loan you should avoid; sidestepping these can definitely help you save time and money. Save Early For Your Down Payment Some construction loans (VA and USDA) have no down payment requirement. All others do. And even the VA and USDA equivalents of an FHA One-Time | more...

Home Loans For Building On Your Own Land

November 8, 2019

FHA Loan Appraisal Requirements: Repairs

By Bruce Reichstein

FHA loan rules require an appraisal of the property secured by the mortgage regardless of whether it’s an existing construction home or if you choose to build on your own land using a One-Time Close loan. Do you know what the home loan rules say about any required repairs or corrections? You may not expect an appraisal-directed repair from a new construction home. But if the FHA appraiser finds something that does not meet local building code, or if there was some kind of damage uncovered during the appraisal (these are just two examples of what could happen at appraisal time on a new construction home) those issues must be corrected. HUD 4000.1, the FHA Single-Family Home Loan Handbook, instructs the lender that in cases where the appraisal uncovers things | more...

October 28, 2019

Home Loans For Building On Your Own Land

By Bruce Reichstein

If you do not want to buy existing real estate or hire a realtor, and prefer to design your own home (or have one designed for you), a One-Time Close (OTC) construction loan is for you. These loans are named “One-Time Close” because unlike some construction loans that require two applications, two approvals, and two closing dates, One-Time Close mortgages have ONE loan for both the construction of the home and for the mortgage itself. These construction loans are available under several government-backed lending programs such FHA One-Time Close construction loans, VA Construction loans, and the USDA equivalent. VA and USDA loans have no down payment requirement, but VA mortgages are not for the general public (qualifying veterans, currently serving troops, and certain surviving spouses of military members who died | more...

October 24, 2019

The FHA Loan That Helps You Build On Your Own Lot

By Bruce Reichstein

The FHA One-Time Close construction loan FHA One-Time Close Loan is a mortgage that lets the borrower design and build a home on the borrower’s own land. If you would rather build a home rather than look at real estate listings for an existing construction house, the One-Time Close loan is for you. There is an FHA version of the One-Time Close construction mortgage that requires a low 3.5% down payment. There is also a version of this construction loan offered by the VA to qualifying veterans and currently serving military members. The VA One-time Close construction loan has a 0% down / zero-down option. No money down is required for a VA construction loan up to the VA loan limit. See the end of this article for more information | more...

October 22, 2019

FHA Disaster Relief Changes

By Bruce Reichstein

In August of 2019, the FHA and HUD issued press releases and Mortgagee Letters describing changes to the FHA loss mitigation guidelines for those recovering from natural disasters in federally-declared natural disaster areas. The FHA states that the new rules affect homeowners who live or work in a “Presidentially-Declared Major Disaster Areas (PDMDAs) of Hurricanes Harvey, Irma and Maria or certain California Wildfires, Flooding, Mudflows, and Debris Flows” according to the HUD official site. Certain temporary measures the FHA and HUD passed in recent times to help improve disaster recovery in these areas are now made permanent. There are some features that have been added that streamline the application process for FHA loan relief, forbearance, and other measures. According to the HUD official site, lenders can use a recent bank | more...

October 21, 2019

FHA Mortgage Rates For The Rest Of 2019

By Joe Wallace

Those who are ready to buy a house, or build a home on their own land using an FHA construction loan are considering their options at a time when mortgages are said to be as much as $200 cheaper than this time last year (depending on the price, down payment, and other factors). Mortgage rates in general are lower now than predicted last year and the rates are, according to some market watchers, due to remain low in November 2019 if the predictions come true. There are a variety of factors affecting mortgage loan interest rates at the moment; Brexit has an effect on investor behavior that can influence mortgage rates, the tariff war with China is another variable. Add to that consumer behavior in U.S. housing markets, and the | more...

October 18, 2019

FHA Loans For Buying, Building, Or Assembling A Home

By Bruce Reichstein

Did you know that FHA home loans can help you buy an existing home as a first-time home buyer, but can also help a first-timer or experienced homeowner have a house built for them from the ground up on your own lot or a lot you purchase in connection with the mortgage. It’s also possible to have a manufactured home assembled for you on a lot you purchase or already own. These loans, especially the FHA One-Time Close mortgage for building a home from the ground up, are offered to both experienced borrowers and first time home buyers alike with no difference in the basic terms and conditions. That means that a first-time borrower is not penalized for being a first-timer; there are no elevated down payment requirements, no added | more...

October 16, 2019

Build On Your Own Land: The FHA One-Time Close Construction Loan

By Bruce Reichstein

The FHA One-Time Close construction loan allows a borrower to build a home from the ground up, including loan applicants who want to build on their own land with an FHA construction loan. What do borrowers need to know about the FHA One-Time Close loan? To begin, this type of FHA home loan is available to all qualified borrowers who want to build approved properties; the first-time home buyer is just as welcome to apply for an FHA construction loan as an experienced borrower. For this type of loan, the time you would spend house hunting will be spent contracting with a builder (who must be a licensed general contractor), working with floor plans, and planning the construction of the home rather than going out to search for an existing | more...

September 6, 2019

HUD Announces Housing Reform Recommendations

By Bruce Reichstein

The Department of Housing and Urban Development has issued recommendations to the President for housing reform, including attention on down payment assistance programs and cash-out refinancing. According to a press release issued on the HUD official site, this is NOT the same housing finance reform plan, which was developed by the U.S. Treasury Department. There are major differences between the two in some respects including the HUD language discussing the need to focus on “the core mission” of the FHA where home loans are concerned. It’s the view of the Treasury Department (as stated in the plan) that any changes to the core of what has traditionally been considered an FHA loan program could be detrimental. The Treasury Department plan states, “…any proposal to fundamentally change the housing finance system | more...

September 4, 2019

HUD Disaster Resources

By Bruce Reichstein

The Department of Housing and Urban Development is reminding homeowners of the disaster resources available from federal agencies including HUD, the FHA, FEMA, and more. Those in federally declared disaster areas are eligible for special FHA home loan forbearance and other foreclosure avoidance measures. But loan forbearance and foreclosure avoidance are NOT automatic. All home owners still paying their mortgages at the time of the disaster should contact their lenders to discuss next steps and how to make arrangements to avoid home loan default and foreclosure. Lenders cannot help borrowers who do not do so, and it pays to be proactive, especially where FHA mortgages are concerned. FHA Foreclosure and Loss Mitigation Policy FHA lenders are given freedom to use “reasonable judgment in determining who is an ‘affected borrower’ in | more...