Articles Tagged With: Appraiser

November 1, 2012

What is the FHA Minimum Credit Score: A Reader Question About FHA Loans

A reader asks, “What is the minimum credit rating score needed to be considered for an FHA loan?” This question comes up very frequently, and the answer is always a two-parter. For starters, borrowers should understand the FHA’s minimum FICO credit score requirements. These requirements are described on the FHA official site as follows: For FHA loans with case numbers “assigned on or after 10/04/10”, FHA loan rules state: When the decision credit score is:

October 30, 2012

FHA Warning On Scams Related to the National Mortgage Settlement

By Joe Wallace

In early 2012, a landmark mortgage settlement between five major lenders and the U.S. government was reached after complaints were filed regarding home loan abuses and foreclosure abuses. According to a Department of Justice press release dated March 12, 2012, “The Justice Department, the Department of Housing and Urban Development (HUD) and 49 state attorneys general announced today the filing of their landmark $25 billion agreement with the nation

October 19, 2012

FHA Loan Income Requirements: Myths and Reality

By Joe Wallace

Income is a topic that comes up in frequently asked question about FHA loans. Some potential borrowers are misinformed about the nature of FHA mortgages; they think the program is only for the financially disadvantaged. Can a borrower earn too much to qualify for an FHA home loan? Is there a “ceiling” for the amount of income you can earn and still apply for an FHA guaranteed home loan? No. According to the FHA and HUD, “FHA’s mortgage programs do not typically have maximum income limits for qualifying, although you must have sufficient income to qualify for the mortgage payment and other debts.” That’s not to say that there are NO income limits associated with FHA loans; “Income limits may be present when qualifying for down payment assistance or other | more...

October 10, 2012

FHA Loan Reader Questions: FHA Loans for Manufactured Homes and Land

By Joe Wallace

A reader asks, “Since FHA loan program includes Manufactured homes what about if you want to have your own land to put the house on. Will the loan cover the home and land?” Here’s a partial answer from the FHA official site: “HUD’s FHA program insures two types of mortgages. Title II insures mortgages on qualifying manufactured homes sold with land and meeting other requirements. FHA’s Title I program can provide information to consumers interested in obtaining HUD-insured loans. You may also want to contact lending institutions in your area (or the area where you want to purchase your home) for additional financing options.” The FHA Title II program mentioned above includes a requirement that the mortgage is intended for “both the manufactured unit and its site”. FHA Title II | more...

October 3, 2012

Things You Should Know About FHA Refinance Loans: The Basic Details

By Joe Wallace

Refinancing an FHA mortgage is similar to refinance loan on other types of mortgages such as conventional loans or VA loans. Naturally the FHA has its own list of requirements and regulations that govern refinance loans; do you know the basics as well as you should? If you’re considering an application for an FHA refinance, here are a few general things you should know about going into the process. In the FHA loan rulebook under the section, “Purpose of a Refinance Transaction” we learn, ” A refinance transaction is used to pay off an existing real estate debt with the proceeds of a new mortgage; –for borrower(s) with legal title, and –on the same property”. The rules also state that an FHA borrower is “eligible to refinance the loan, as | more...

September 26, 2012

FHA Loan Rules For Principal Residences

By Joe Wallace

A recent reader question about FHA loan requirements for occupancy begs the question; what does the FHA consider a “principal residence” or “primary residence” and will the FHA approve of a second FHA mortgage for those who purchase single-family, owner-occupied property? According to the FHA loan rules, found in HUD 4155.1, in the section titled “FHA-Insured Mortgages on Principal Residences and Investment Properties” you’ll find the following: “To prevent circumvention of the restrictions on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any borrower.” If you want to buy a home, this means the FHA expects you to use it AS a home. Additionally, “FHA will not insure a mortgage if it is determined that the transaction was designed to use | more...

September 21, 2012

FHA Rules and Transparency In Lending

By Joe Wallace

From time to time, we publish information about the FHA and HUD efforts to combat discrimination in housing. We don’t have new cases to report at this time, but some borrowers often wonder how FHA loan rules are designed to help prevent discrimination in a procedural way. It’s one thing to rely on existing or newly passed federal laws that forbid discriminatory practices in lending, housing, or home sales. It’s quite another to create rules and regulations that specifically work to prevent such illegal practices in the procedures of lending money. In some cases these anti-discrimination rules are more or less labeled and described as such; in others there are layers of subtlety involved, but it’s easy to see how they could be interpreted as an anti-bias requirement. A good | more...

September 19, 2012

FHA Condo Loan Rules: Pre-Sale Requirements

By Joe Wallace

The FHA recently updated its condo project approval rules to include changes in pre-sale requirements. FHA loan rules permit loans on condo units as long as the condo project is FHA approved. Part of the process of getting condo approval includes meeting FHA guidelines on critical areas such as pre-sale requirements. The new FHA loan rules for pre-sales are now updated. According to FHA Mortgagee Letter 2012-18, “The requirements of Section 3.4 of the Guide are replaced by the following updated policy guidance.” That guidance includes: “At least 30 percent of the total units must be sold prior to endorsement of a mortgage on any unit.

September 14, 2012

FHA Loan Reader Question: FHA Loan Approval

By Joe Wallace

A reader asks, “How long does it take a lender to let you know if you qualify for the FHA loan?” The answer to this question varies greatly depending on the lender. There are many factors that can play a part in the processing time for an FHA mortgage including the lender’s backlog of work waiting to be processed and other issues. But there is an FHA loan rule that states the lender does have a time limit to take action on your loan application. There is a 30 day time limit–the lender must act on your application within 30 days and inform you of that action. That’s not necessarily a mandate to have your loan approved in 30 days, and there are caveats to the 30 day rule which | more...

September 13, 2012

FHA Loan Reader Questions: Credit Scores

By Joe Wallace

A reader asks, “I don’t have an FHA loan and can’t get a loan. I’m on a fixed income and need HUD assistance due to hurricane Issac damage. Who can I get assistance from? My credit is poor but I can pay mortgage. I am a single parent and don’t know where to turn. We need a home desperately! The one we are in now is not healthy and