Articles Tagged With: FHA 203b Mortgage

April 7, 2022

What Do FHA Loan Closing Costs Include?

What do FHA loan closing costs include? There are certain fees and expenses you will need to save up for during the planning stages of your FHA home loan. They include an up-front mortgage insurance premium, home inspection, appraisal fees, and other costs that add up and you may encounter unexpected costs like a compliance inspection that would come on the heels of the appraisal where repairs or corrections are required. They are not required in all home loan cases (only when deemed necessary as a result of the appraisal), so it’s not an expense you will definitely have to pay. Remember that the less you have included in the loan amount (certain permitted closing costs may be added to the loan) the lower your mortgage payments potentially are. Closing | more...

Five FHA Home Loan Questions To Ask Your Lender

February 24, 2022

FHA Home Loan Issues For Veterans

By Joe Wallace

Veterans interested in buying a home have many choices including a VA home loan, but also FHA loans that function in much the same way as their VA counterparts. While it is true that VA loans require no down payment in most cases but FHA home loans always require one in most cases, some veterans explore their FHA loan options just the same. Some want existing construction loans, others want a One Time Close mortgage to build a suitable home from the ground up. One Time Close mortgages are available in both VA and FHA versions, so military and veteran borrowers have options with either type of mortgage. But some military members and veterans may enter the service after already having purchased a home, or after having assumed an FHA | more...

February 22, 2022

FHA Home Loan Rules And Airbnb

By Bruce Reichstein

Is it possible to buy a home with an FHA loan to use as an Airbnb-type venture? Borrowers are eligible to apply for FHA home loans for up to four-unit residences; what do FHA loan rules say about using the home as a rental space? FHA loan rules governing these situations are found in HUD 4000.1. Borrowers may feel encouraged by the notion that owner-occupied properties with up to four units can by purchased with an FHA mortgage, and even more encouraged that the rules actually do address (and permit) borrowers to rent out the unused living potions. However, renting these units out is also subject to FHA loan rules (in addition to lender requirements and state law). What does HUD 4000.1 say about using spaces in your home purchased | more...

February 7, 2022

What You Should Know About FHA Mortgage Loan Rate Lock Agreements

By Joe Wallace

What should FHA home loan applicants know about the practice of mortgage interest rate lock commitments? This is an important detail of your home loan and it’s best to know how the interest rate lock agreement works ahead of time so you know how and why this part of the mortgage loan process works. What Is An FHA Mortgage Loan Interest Rate Lock Agreement? An interest rate lock protects a borrower from the daily mortgage rate fluctuations that happen naturally due to investor behavior, or other market forces that can change rates. An interest rate lock commitment is not automatic; it must be formally agreed to in writing between the borrower and the lender. An interest rate lock commitment does exactly what it sounds like it does-the lender and borrower | more...

January 7, 2022

FHA Home Loans: The Escape Clause

By Bruce Reichstein

Of course it’s not formally known as the “escape clause” but first-time homebuyers should know about the FHA home loan rules that govern what happens if the appraised value of the home comes in lower than the asking price of the real estate. HUD 4000.1 instructs the lender that a clause must be inserted into any legally binding commitment to purchase the home that guarantees that the borrower does not forfeit earnest money or retain an obligation to purchase the property if the appraisal is lower than the sale price. The wording of such a clause is suggested in HUD 4000.1 (page 117) as something to this effect: “It is expressly agreed that notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase | more...

January 5, 2022

FHA And HUD Announce Disaster Relief For Arkansas and Colorado

By Joe Wallace

The U.S. Department of Housing and Urban Development has announced federal disaster relief for portions of Arkansas and Colorado affected by natural disasters. In the case of the Arkansas declaration, the following counties are eligible for relief thanks to a Presidential major disaster area declaration: Craighead Jackson Mississippi Poinsett Woodruff These counties were hit by severe storms and tornadoes in December 2021. For the Colorado declaration, Boulder County has been declared a major disaster area due to wildfires that began in late December 2021 and into 2022. The declaration also means that FEMA funding is provided to the affected areas “on a cost-sharing basis for hazard mitigation measures”. If you live in any of the affected counties mentioned here, the following disaster relief options are available to you: Immediate Foreclosure | more...

December 17, 2021

When Is An FHA Loan Assumable?

By Bruce Reichstein

When is an FHA loan assumable? Let’s start by examining what the FHA single-family home loan handbook, HUD 4000.1, defines as a loan assumption. “Assumption refers to the transfer of an existing mortgage obligation from an existing Borrower to the assuming Borrower.” An FHA loan assumption is generally possible-for most FHA loans closed today, the lender’s participation and approval will be required in order to carry out a loan assumption transaction. There are also occupancy requirements which may apply depending on what year the original mortgage was closed in. From HUD 4000.1: “If the original Mortgage was closed on or after December 15, 1989, the assuming Borrower must intend to occupy the Property as a Principal Residence or HUD-approved Secondary Residence. If the original Mortgage was closed prior to December | more...

November 30, 2021

Do I Have To Make A Down Payment On An FHA Mortgage?

By Joe Wallace

One variation of a commonly asked question about FHA home loans is, “Do I have to make a down payment on an FHA mortgage?” This question gets asked sometimes in reference to other government-backed loans that feature no down payment (available via a Department of Veterans Affairs program offered to qualifying military members and certain military spouses only). FHA home loans do require money down-the borrower’s minimum required investment is 3.5% of the adjusted value of the home. But the borrower does not always have to pay that money out of pocket. Why? State and local down payment assistance programs can help–a borrower using a state or local program that meets FHA standards for third-party down payment help could save thousands upfront on the loan. What kind of standards are | more...

October 29, 2021

How To Get An FHA Mortgage Loan As A First-Time Home Buyer

By Joe Wallace

How can a first-time home buyer qualify for an FHA mortgage loan? To use an FHA mortgage you do NOT have to be a first-time buyer, but if you ARE one you may qualify for state or local down payment assistance programs in your area and it’s a good idea to explore those options if they are open to you. If you are looking for a starter home, a home to grow into, or you want to have a home built especially for you (using an FHA One-Time Close construction mortgage loan), your FHA loan options are impressive. How To Qualify For An FHA loan As A First-Time Home Buyer Plan ahead and start early for your home ownership journey. Start at least a year in advance…that’s the best advice | more...

October 1, 2021

FHA Mortgage Relief Announced For Vermont Disaster Areas

By Bruce Reichstein

In many cases, the FHA and HUD make announcements about disaster relief after tropical storms, hurricanes, forest fires. But you don’t have to experience a Category 3 hurricane to be severely affected by weather; one excellent example of this comes with the HUD announcement of federal disaster assistance for parts of the State of Vermont that were in the path of severe storms and flooding at the end of July 2021. On September 29, 2021, there was a Presidential Major Disaster Declaration for two Vermont counties–Windham and Bennington. Thanks to that Presidential declaration, HUD has offered an automatic 90-day foreclosure moratorium for those two counties–this affects those with FHA mortgages, “commenced on the date of the Presidential major disaster declaration, and foreclosures of mortgages to Native American borrowers guaranteed under | more...