Articles Tagged With: Fair Housing Act

January 25, 2013

FHA Loan Reader Questions: Multiple FHA Loans

A reader asks, “I was told that I could apply for a second FHA loan if my family outgrew the first house. We have a 980 sqft home–2 bedroom 1 bath that was purchased when my wife and I had only one child. Now we are 4 and need a bigger home. I applied for the second FHA loan and was told last minute that I needed to sell the first home, or lower the balance down to 70% of balance. I hear different things from different banks and want to see if FHA can help me out on this.” According to the FHA, “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. | more...

January 25, 2013

FHA Loan Reader Questions: How Do FHA Loans Differ From Credit Union Mortgages?

By Joe Wallace

A reader asks, “What is the difference between an FHA loan and a loan from a credit union?” FHA loans differ from other types of loans for many reasons. Conventional mortgages, for example, often require much higher down payments and credit score requirements for conventional lenders. When it comes to credit unions, there may be many differences or similarities depending on which lender you’ve compared the FHA terms and conditions with. It’s not possible to say across the board how FHA loans may vary–credit unions are all different–but a quick look at some terms and conditions of individual credit unions can be revealing. For example, some credit unions we looked at offered qualified first time home buyers conventional loans with low down payments but did not offer at or near | more...

January 23, 2013

FHA Loan Credit Requirements: A Reader Question

By Joe Wallace

A reader asks, “My wife’s uncle just passed away not to long ago and I want to keep his property in the family. I make very good money,but i only have a 590 credit score.How can I go about buying his property and keeping everything the way it always has been?” Without addressing the credit score issue, in general one good way to go about buying a home with an FHA home loan is to get pre-approved for a loan amount–fill out the online application at FHALoan.com (a private company, not a government agency) and work with the loan officer to get the property appraised. This process–pre-approval, appraisal, and etc.–is fairly typical for many borrowers. Credit scores are a separate issue. The FHA Loan program has minimum credit score requirements | more...

January 22, 2013

U.S. Bank Settles Discrimination Claim

By Joe Wallace

A press release on the FHA/HUD official site announces a settlement in a disability discrimination claim brought by HUD against U.S. Bank. According to HUDNo.13-008, “Minnesota-based U.S. Bank National Association will pay $12,000 to a loan applicant with disabilities under a Conciliation Agreement settling allegations that the bank required him to provide unnecessary documentation to establish he would continue receiving disability income for three years before they would approve his mortgage loan.” As the press release states, the Fair Housing Act makes it an offense to discriminate “in the terms and conditions of a loan based on a person’s disability, including by imposing different loan application or qualification criteria.” According to the press release, a complaint was filed with HUD after U.S. Bank required a borrower to show proof that | more...

January 17, 2013

Virginia Beach-based Realty Company Settles Discrimination Case with FHA

By Joe Wallace

The FHA and HUD have issued a press release announcing the settlement of a housing discrimination case involving a company in Virginia Beach, VA. According to HUDNo.13-006, “Virginia Realty Company of Tidewater, Inc., a property management company based in Virginia Beach, VA, will pay $82,500 to settle allegations that it refused to allow a Hispanic woman to apply for an apartment because she did not speak fluent English. Virginia Realty had a policy of not renting to persons with limited English proficiency. The Fair Housing Act prohibits discrimination in the rental of housing on the basis of national origin.” The press release adds a quote by John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity, who states, “Denying housing because a person does not speak English well violates | more...

January 15, 2013

FHA Loans For Manufactured Homes: A Reader Question

By Joe Wallace

A reader asks, “My wife, 5 year old and I live in North Carolina with her parents b/c it simply costs too much to rent. Her parents purchased a manufactured home that is over 10 yrs old (1998) 3 years ago as well as the roughly 3/4 acre lot it sits on.” “The house itself does have a permanent foundation (Strapped or bolted to a PIP or masonry perimeter foundation, with no tow gear left in the crawl). They currently still owe significantly on the mortgage. I’ve been looking at the FHA sites out there for information but I haven’t learned an answer to my question. My question is, can my wife and I buy her parents house and land through a manufactured home loan when the house itself is | more...

January 9, 2013

FHA Loan Rules For Self-Employed Borrowers: A Reader Question

By Joe Wallace

A reader asks, “Are there specific rules for applicants who are self-employed or independent contractors and receive a 1099 instead of a W-2?” Yes. Self-employed borrowers and independent contractors must have their income verified the same as more traditionally employed borrowers. For self-employed FHA loan applicants this may include additional paperwork; tax statements, proft-and-loss sheets, even business plans or other related documentation depending on the lender’s requirements. Self-employed and contract workers have specific criteria that must be observed. What defines “self employed” as opposed to “contract”? You may be considered self-employed if you have a 25% or greater controlling interest in a business. The lender has to determine your level of ownership in a company. A contract employee may not be required to submit the same documentation as a self-employed | more...

January 8, 2013

FHA Loan Reader Questions: Manufactured Home Rules

By Joe Wallace

A reader asks, “What requirements does a factory built home (manufactured or modular)have to meet to qualify for FHA financing? I am particularly interested in any “age” limitations/recognitions/requirements/etc.” It’s true that there are FHA loans for certain types of mobile homes/manufactured homes, modular homes, etc. During the housing crisis, these loans were more difficult to come by; many lenders were not willing to underwrite FHA loans on these types of properties. But with a recovering housing market and rising property values, some borrowers are finding their lenders willing to consider these types of FHA loans once more. To answer the reader’s question, it was necessary to reference the Department of Housing and Urban Development’s Frequently Asked Questions database, which states; “To determine basic eligibility for FHA mortgage insurance, all manufactured | more...

January 7, 2013

Adding Repair Costs To An FHA Home Loan

By Joe Wallace

When you want to purchase a home with an FHA guaranteed home loan, the property you want to buy must be appraised to determine its eligibility for the loan. A home that does not meet FHA minimum property requirements may not necessarily be ruled out for an FHA loan–an appraiser may note certain corrections that should be made to bring the home up to standard. In such cases, the loan may be approved contingent on those corrections being made. But can the expense of those corrections, when not paid by the seller, be included in the FHA loan amount? FHA loan rules provide for this, stating under what circumstances repair or improvement costs can indeed be added to the loan. According to HUD 4155.1 Chapter Two, “Repairs and improvements may | more...

January 4, 2013

Bank Of America Settles In FHA Sexual Orientation Discrimination Case

By Joe Wallace

A press release issued on January 2, 2013 announces a settlement between the Department of Housing and Urban Development and Bank of America regarding a discrimination case filed by the government. According to HUDNo.13-001, “The U.S. Department of Housing and Urban Development today announced an agreement with Bank of America (BOA) to settle a claim that the mortgage lender refused to provide financing to a lesbian couple. The agreement is the first enforcement action taken against a lender involving HUD’s recent rule ensuring that the Department’s core housing programs be open to all eligible persons, regardless of sexual orientation, gender identity, or marital status.” The case involves alleged violations of the HUD rule “Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity” which prohibits lenders from | more...