Articles in Category: Special FHA Programs

March 2, 2018

FHA Foreclosure Relief For 2017 Disaster Victims

In late February 2018, the FHA announced additional foreclosure relief measures for victims in federally declared disaster areas in 2017. According to the FHA official site, the new measures are intended to be an expanded version of “mortgage relief to FHA-insured homeowners who live or work in areas impacted by Hurricanes Harvey, Irma and Maria as well as California wildfires and subsequent flooding and mudslides.” The FHA has ordered participating FHA lenders to offer “additional options to eligible disaster victims in Texas, Louisiana, Georgia, Florida, South Carolina, California, Puerto Rico and the U.S. Virgin Islands, allowing them to remain in their homes while reducing losses that would otherwise negatively impact FHA’s Mutual Mortgage Insurance Fund” according to the press release. At the heart of these new measures is something called | more...

February 23, 2018

FHA Announces Foreclosure Avoidance Help For Federal Disaster Areas

By Joe Wallace

The FHA has announced extended foreclosure relief measures for those in qualifying federal disaster areas. According to a press release on the FHA official site, new guidance for participating FHA lenders will apply for those affected by a wide range of natural disasters including: Louisiana (Hurricane Harvey) DR-4345 Texas (Hurricane Harvey) DR-4332 Florida (Hurricane Irma) DR-4337 Georgia (Hurricane Irma) DR-4338 Puerto Rico (Hurricane Irma) DR-4336 South Carolina (Hurricane Irma) DR-4346 Virgin Islands (Hurricane Irma) DR-4335 Puerto Rico (Hurricane Maria) DR-4339 Virgin Islands (Hurricane Maria) DR-4340 California (Wildfires) DR-4344 or California (Wildfires, Flooding, Mud Flows, Debris Flows) FEMA-DR-4353 There is a lengthy description of some of the new program changes (which we will cover in another blog post) but one of the most important developments included in the FHA announcement has | more...

February 8, 2018

HUD Announces Hurricane Aid For The Virgin Islands

By Joe Wallace

The Department of Housing and Urban Development has announced a multi-million dollar aid package for hurricane recovery efforts in the U.S. Virgin Islands. According to a press release at the HUD official site, “The U.S. Department of Housing and Urban Development (HUD) today awarded $242.7 million to help the U.S. Virgin Islands to recover from Hurricanes Irma and Maria. HUD’s Deputy Secretary Pamela Hughes Patenaude announced the disaster recovery grants with Governor Kenneth E. Mapp during a tour of damaged homes in St. Thomas”. The HUD recovery funds, similar to those authorized for disaster recovery efforts in Puerto Rico, are via HUD’s Community Development Block Grant – Disaster Recovery (CDBG-DR) Program and “support long-term recovery, including infrastructure, seriously damaged housing, and economic recovery in the Territory” according to the HUD | more...

February 7, 2018

What Are The Differences Between OTC FHA Construction Loans And Other FHA Home Loans?

By Bruce Reichstein

What are the basic differences between FHA One-Time Close / Single Close construction loans and other types of FHA mortgages? Borrowers should understand the basic differences and how they will affect your transaction.FHA One-Time Construction Loans / Single-Close Construction Loans Have Different Appraisal Requirements When an FHA loan applicant wants to purchase a home that is considered “existing construction”, which has been built for at least a year or more with at least one owner, the appraisal process happens as a condition of loan approval to insure the property meets minimum FHA standards. When you apply for an FHA One-Time Close construction loan, also known as an FHA construction-to-permanent loan, an inspection is required to insure the property meets minimum standards. HUD 4000.1 explains what the inspection requirements are for | more...

February 6, 2018

HUD Announces Aid Package For Puerto Rico

By Bruce Reichstein

The Department of Housing and Urban Development has announced a billion dollar relief package for Puerto Rico. According to a press release on the HUD official site, the agency “awarded more than $1.5 billion to help Puerto Rico to recover from Hurricanes Irma and Maria.” The funds are available via $7.4 billion in CDBG-DR (see below) funding for major disasters declared in calendar year 2017 thanks to a continuing resolution signed into law in September 2017. The HUD Deputy Secretary Pamela Hughes Patenaude discussed these HUD disaster recovery grants with Governor Ricardo Rosselló during a visit to Puerto Rico in the aftermath of Hurricanes Irma and Maria. Governor Rosselló, quoted in the press release, added, “On behalf of the many thousands of survivors here in Puerto Rico, I want to | more...

FHA One Time Close Construction Loan Option

February 1, 2018

FHA One-Time Close Construction Loan Rules For Maximum Mortgage, Down Payment

By Bruce Reichstein

FHA One-Time Close / Single-Close Construction Loan rules for maximum mortgage amounts and down payments are found in the FHA loan handbook, HUD 4000.1. The FHA One-Time Close mortgage, also known as a construction-to-permanent loan, lets borrowers apply for a loan to have a home built for them using only a single application, loan approval, and closing date. HUD 4000.1 describes it as follows: “A Construction to Permanent Mortgage combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close / Single-Close Construction Loan Maximum Loan Amount Rules Maximum mortgage amounts for FHA One Time Close loans are determined “by using the | more...

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

January 29, 2018

FHA One-Time Close Construction Loans: Down Payments and Interest Rates

By Bruce Reichstein

FHA One-Time Close / Single-Close construction loans have different requirements for down payments and interest rate issues can be more complex; many borrowers are interested in this home loan but aren’t clear on the finer points. Today we examine how down payment issues and interest rate rules apply to the FHA One-Time Close construction loan. The FHA loan handbook, HUD 4000.1 describes the One-Time Close loan, also known as an FHA construction-to-permanent mortgage, as a loan that “…combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close Construction Loan Down Payment Rules HUD 4000.1 allows for some unique down payment sources | more...

January 25, 2018

FHA Loan Options For New Construction Homes: FHA One-Time Close Mortgages And More

By Bruce Reichstein

FHA loan options for buying new construction homes include the FHA One-Time Close / Single-Close Construction Mortgage, which allows a borrower to apply once and have a single closing date for a house built from the ground up. FHA One-Time Close mortgages differ from other construction loans because this type of construction loan eliminates the two-step construction loan application process where the borrower applies once for the costs of construction, and has a closing date for that loan, then applies a second time for the mortgage on the property itself. It’s definitely an advantage to have a single application and closing date. But what are the other options to compare this type of loan to? It’s good to know what you can get from multiple options-making an informed choice to | more...

December 13, 2017

FHA One-Time Close Requirements: Appraisals

By Bruce Reichstein

FHA One-Time Close / Single-Close construction loans feature a single loan application and closing date for both the construction phase of the loan and the “permanent” portion of the loan. Like other FHA mortgages, an appraisal is required on the property to be secured by the mortgage. In general, FHA loan appraisal requirements include the following guidelines on the timing, as found in HUD 4000.1, the FHA loan handbook: “The effective date of the appraisal cannot be before the FHA case number assignment date unless the Mortgagee certifies that the appraisal was ordered for conventional lending or government-guaranteed loan purposes and was performed pursuant to FHA guidelines.” While this may not normally be an issue for construction loans given the timing of the appraisal, another portion of the same section | more...

December 6, 2017

FHA Construction To Permanent Loan 2018 / One-Time Close (Single-Close)

By Bruce Reichstein

FHA construction To Permanent loans in 2018 are a great option for those who want to buy a home but aren’t interested in purchasing existing construction properties. If having a home built for you sounds better than buying one that already exists, the FHA Construction-To-Permanent loan, also known as an FHA One-Time-Close loan / Single-Close loan, might be right for you. FHA Construction To Permanent Loan Requirements The basic credit qualifying guidelines for FHA One-Time Close mortgages may vary more among participating FHA lenders. You may find a minimum FICO score requirement of 620 or higher depending on the lender, and in some cases you may learn that a lender has a minimum FICO score benchmark of 660 or better and that two FICO scores may be required. Credit requirements | more...