Articles Tagged With: FHA and HUD

Build on your own lot. Construction loan basics

December 11, 2019

Build On Your Own Lot: Construction Loan Facts

If you are interested in building a home on your own lot instead of buying a house owned by someone else, the One-Time Close construction loan is an option worth considering. Facts about One-Time Close mortgages include your options–there are FHA, VA and USDA versions of the One-Time Close Construction (OTC) loan. With a VA OTC, there is an option to put 0% down, FHA construction loans feature a low down payment of 3.5% of the adjusted price of the home in most cases. Construction loans require you to work with an approved contractor so you should plan on spending some time searching for one. Construction loans are sometimes hard to come by because borrowers don’t know the right loan to ask for, or are working with a lender who | more...

December 10, 2019

Higher FHA Home Loan Limits For 2020

By Bruce Reichstein

In 2019, the FHA and HUD announced higher loan limits, giving borrowers in most counties additional borrowing power to purchase, build, repair, or refinance an owner-occupied home. The uptick in FHA loan limits for 2019 led some to believe that it might be possible to see another year of higher loan limits, while others speculated that higher limits may not be a trend, but simply a typical course correction for home loan limits. Regardless of which camp 2020 borrowers were in back then, it seems there is another year to contemplate higher loan limits; the Department of Housing and Urban Development has released the FHA loan limits for 2020 and they are indeed higher in most areas. The HUD announcement discussing the overall increase in the FHA loan limit for | more...

December 9, 2019

Applying For A Home Loan In 2020

By Joe Wallace

Are you thinking about buying or building a home in 2020? Prepare for your dream home early and get ready to start the path to homeownership in the new year. Save Early What kind of expenses should you anticipate when saving for your home loan? It’s not just the down payment you’ll need to save for–here is a list of common home loan expenses: Title insurance Appraisal costs Pest inspection fees Origination fees Discount points Credit report fee Survey fee Property taxes Mold abatement (where applicable) Document prep Compliance inspections You will also want to save early for unexpected costs including contingencies where the appraised value of the property is lower than the asking price. Some borrowers like the home so much they are willing to pay the difference in | more...

December 4, 2019

Don’t Make These Mistakes With Your One-Time Close Construction Loan

By Bruce Reichstein

The FHA One-Time Close construction loan is meant for borrowers (first-time home buyers or otherwise) who would rather build a house on their own lot instead of buying an existing property. The beauty of the FHA One-Time Close loan is that you can be a first-time home buyer and make the same low down payment of 3.5% as any other FHA borrower. But there are some pitfalls to avoid with FHA One-Time Close mortgages; these are the same mistakes that are made with other home loan transactions, but with a construction loan you may find that more attention is paid to these issues due to the more complex nature of the loan. Avoid Changes In Your Credit Changes to your financial status before loan closing means things like adding more | more...

December 3, 2019

FHA Loan Rules And Your Personal Information

By Joe Wallace

HUD 4000.1, also known as the FHA Single-Family Lender’s Handbook, guides the lender through the entire FHA loan process including how your application data must be processed. In the same way FHA loan rules have a lot to say about where a borrower’s down payment money comes from and verifying the sources of those funds, FHA loan rules also govern how the lender can gather your financial data. For example, did you know your credit scores and other data must be given to the lender from approved sources and that the information cannot come from you even if it’s sealed and hand-delivered? Did you know that HUD 4000.1 does not permit the borrower to handle or transmit other kinds of information to the lender, too? Sourcing counts in both down | more...

November 28, 2019

Happy Thanksgiving 2019!

By Joe Wallace

Happy Thanksgiving 2019! We pause from our usual schedule of writing about FHA home loans and answering reader questions to observe the holiday. Thank you very much for reading! Our regular schedule of posts resumes on Monday. Thanks for reading!

November 22, 2019

FHA Loan Rules And Mortgage Closing Costs

By Bruce Reichstein

FHA home loan rules for mortgage closing costs include a requirement that down payment funds come from approved sources, but there are plenty of other guidelines for the money you’ll need to pay at closing time. There are three basic categories when it comes to your home loan closing costs, some of which are subject to change. Some costs are fixed, and some can be increased by the lender depending on whether or there is a change in circumstances that affects the borrower’s credit rating, if there is a change in the down payment, or even the type of home loan (see below). When And How Closing Costs May Change There are certain rules that allow your lender to alter your closing costs. Under the right circumstances, those costs may | more...

November 21, 2019

Types Of Homes You Can Buy Or Build With An FHA Mortgage

By Joe Wallace

What types of home can you purchase or build with an FHA mortgage? For the purposes of this article, we are talking about the status of the property rather than the property type. It’s true that FHA loans are available for condo units, mobile homes, and manufactured homes, and you can also use an FHA One-Time Close construction loan to build a home from the ground up on your own land. You can use an FHA mortgage to buy or build a single-unit home or you can purchase a property with as many as four living units. But FHA home loans also take into account the status of the property as an existing construction home, new construction, etc. The list of property types includes: Proposed Construction where no concrete or | more...

November 19, 2019

HUD Announces Fair Housing Act Violation Settlement With Oglethorpe Square Apartments, GA and Gene B. Glick Company, Inc.

By Joe Wallace

The Department of Housing and Urban Development has announced a settlement in a housing discrimination case involving Oglethorpe Square Apartments of Savannah, Georgia, and Gene B. Glick Company, Inc., of Indianapolis, Indiana. Housing discrimination creates unfair conditions for those who need to rent or buy a home and thanks to the Fair Housing Act there is recourse for those who experience discrimination at any stage of the housing process (see below for information on how to report housing discrimination). Many times, the only people who have the power to stop further violations of federal law are the victims of the discrimination; without reporting the illegal activity, it can go on uncontested for a long time. It’s hard to believe that in the 21st century we must still read about the | more...

November 18, 2019

Construction Loan Advice For New Borrowers

By Bruce Reichstein

Are you thinking about using a construction loan to build a home from the ground up on your own land? The FHA One-Time Close construction loan features a low 3.5% down payment even for those who have never borrowed or purchased a home before. There is also a VA version of the One-Time Close construction mortgage offering 0% down to qualified veteran borrowers, those who still serve, and certain military spouses. The One-Time Close construction loan offers a single mortgage application for both the construction of the home and the mortgage itself; borrowers no longer have to apply for one loan to build and one loan for the mortgage. That means peace of mind during the entire process, but there are some rules and guidelines you’ll need to follow during | more...