Articles Tagged With: FHA 203k Mortgage

June 21, 2012

FHA Loan Rules For Employment and Income

FHA home loans require the borrower to submit employment information to the lender for verification. This is done for several reasons to include documenting the borrower’s income, stability of that income, and how long that income has been ongoing. FHA Loan rules, as described in HUD 4155.1 Chapter Four, Section D, state the following about income and employment: “To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held a position of employment. However, the lender must verify the borrower

June 12, 2012

Bank Of America Settles Maternity Discrimination Claim

By Joe Wallace

A recent press release found at the official site for FHA/HUD announces, “Bank fund will compensate women denied loans because they were pregnant or on maternity leave”. According to the HUD press release 12-095, “The U.S. Department of Housing and Urban Development (HUD) announced today that Bank of America has agreed to pay up to $161,180 to settle allegations that one of the bank’s San Jose, California branches refused to refinance the mortgage of an Irvine woman because she was on maternity leave. HUD reached the agreement with Bank of America to resolve a Fair Housing Act complaint that had been filed by the Fair Housing Council of Orange County (FHCOC).” Those applying for any kind of home loan–including FHA guaranteed mortgages–may not be discriminated against due to pregnancy, family | more...

May 16, 2012

FHA Loan Reader Questions: Loan Approval For Self Employed Borrowers

By Joe Wallace

A reader asks, “Is it true that FHA will not approve a loan if you have only been self-employed at your current business for 1 1/2 years? Applied for an FHA loan, was self-employed in a retail business for 5 years, sold my interest in the business and opened another retail business. My newest business has been open 1 1/2 years. Can I still get financed (credit score and debt to income ratio is excellent)?” The FHA loan rules are clear about minimum employment times in general–there are no minimum requirements for the amount of time spent on any one job. According to HUD 4155.1, Chapter , Section D; “To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held | more...

April 13, 2012

Steps To An FHA 203(K) Fixer Upper Loan

By Joe Wallace

Some FHA loan applicants are interested in what the FHA calls “Handyman Specials” or “Fixer-Upper Loans” known as the FHA 203(K) mortgage. The FHA 203(K) is a loan guaranteed by the FHA, issued through a private lender for the purpose of buying and repairing property at the same time. There is a down payment requirement, which according to the FHA is “approximately 3.5%” of the purchase and repair costs. FHA 203(K) mortgages are available for those who intend to buy and occupy the property, but non-profit agencies and government entities can also apply. According to the FHA official site, there are a series of steps the borrower takes to apply for a 203(K) loan. First, the buyer finds a suitable property to purchase and repair. According to the FHA, both | more...

April 11, 2012

FHA Loan Questions: Mortgage Insurance Payments

By Joe Wallace

A reader asks, “I am refinancing my home with FHA. I am financing $54,540.00 and the appraisal (by FHA) is $180,000.00. Since I have almost $125,000.00 in equity why are they making me purchase FHA mortgage insurance at $50.00 a month? How long will I have to pay this on a 30 year loan at 4.25%?” Mortgage insurance, also known as MIP, is required by the FHA because it protects the government and the lender against a loss should the borrower default on his or her FHA loan. FHA requirements include mortgage insurance for borrowers making a down payment of less than 20 percent. Mortgage insurance is also required on refinance loans and is included in various rules governing FHA refinancing loans such as the following: “The lender must determine | more...

April 2, 2012

FHA Loan Questions: Mortgage Insurance Premiums

By Joe Wallace

A reader asks, “I thought that it was announced recently that FHA insurance premiums were being decreased not increased?” Effective June 11, 2012, FHA Up Front Mortgage Insurance Premiums (UFMIP) will decrease for certain types of FHA Streamline Refinance Loans. According to the FHA Mortgagee Letter 12-4, “For all SF Forward Streamline Refinance transactions that are

March 29, 2012

FHA/HUD Disaster Relief Announced for West Virginia

By Joe Wallace

A Department of Housing and Urban Development press release announces disaster relief for homeowners and FHA borrowers affected by recent storms, flooding, and landslides in West Virginia. According to press release HUDNo.12-062, “President Obama issued a disaster declaration for Lincoln, Logan, and Mingo Counties. The President

March 22, 2012

HUD Announces Housing Counseling Grants To Help Families Avoid Foreclosure

By Joe Wallace

The Department of Housing and Urban Development (HUD) has announced $42 million in housing counseling grants to 468 national, regional and local organizations. These grants are intended to help families find housing and avoid foreclosure. According to the press release HUDno.12-055, “Housing counseling grants will assist families in becoming homeowners, many for the first time, and remaining homeowners after their purchase. They also provide assistance to renters and the homeless, and offer financial literacy training to individuals and families.” These grants are awarded to local and regional housing counseling agencies, which in turn offer counseling services to those looking to find or keep their homes. “The HUD-approved counseling agencies this funding supports are crucial in helping struggling families on a one-to-one basis to manage their money, navigate the homebuying process, | more...

March 1, 2012

Why Was I Rejected For An FHA Home Loan?

By Joe Wallace

We get many reader comments and questions about FHA insured home loans. Many of them involve the loan process, appraisal procedures and refinancing issues, but some people ask us why they were turned down for an FHA loan, or want to know about the rules concerning loan approval and denial. When an FHA home loan applicant is denied a loan, there are several things which must happen. Many borrowers rightly want to know the specific reasons they were turned down for a home loan and whether it’s possible to try again after addressing the concerns which led to having the FHA loan application denied. Did you know the lender is required to inform the borrower not only as to the reasons why the loan was turned down, but in some | more...

February 14, 2012

FHA Loan Questions: Debt-To-Income Ratios

By Joe Wallace

When you apply for an FHA home loan, you’re required to list all current debts and other financial obligations. This helps the lender calculate the debt-to-income ratio, which must fall within the FHA required percentage. Borrowers should know what the FHA and HUD.gov say about the debt-to-income ratio percentages; “…monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, 4 should total no more than 41% of income. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.” Borrowers should be concerned with the amount of debt they currently have before applying for an FHA home loan. Paying off credit cards and closing unneeded open lines of credit should | more...