Articles Tagged With: FHA and HUD

March 13, 2019

The Flexible FHA Home Loan

First-time home buyers don’t have to put 20% down when shopping for real estate they want to live in as their primary residence. The FHA home loan allows a low 3.5% down and this type of home loan has been described as having loose underwriting standards. Those standards include the FHA minimum credit score of 580 or higher for maximum financing and the lowest down payment, and technically borrowers with FICO scores above 500 are also eligible though with a higher down payment. Lender standards will apply above and beyond these minimums. FHA home loans allow borrowers with lower credit and higher debt ratios to qualify for first-time home buyer loans using compensating factors; a higher down payment, a substantial amount of cash reserves, or other, lender-defined compensating factors. And | more...

March 11, 2019

First-Time Home Buyer Advice: Get A Home Inspection

By Bruce Reichstein

Some wonder if they have had a home inspection when the FHA appraisal results come back. First-time home buyers should know that a home inspection is something that should be done regardless of the appraisal because the two procedures are quite different. The appraisal is not a tool for the borrower and will not give you an idea of the true condition of the home. The home inspection is the job that needs to be done to give you that information. The FHA itself publishes a pamphlet called “For Your Protection, Get A Home Inspection” which includes this advice; “You have the right to examine carefully your potential new home with a professional home inspector. But a home inspection is not required by law, and will occur only if you | more...

March 5, 2019

What You Should Know About FHA Loan Rules And Down Payment Gifts

By Bruce Reichstein

One of the appealing aspects of an FHA mortgage, especially for first-time borrowers who may have tight budgets, is the low 3.5% down payment. Some real estate studies show that the age group commonly known as Millennials paid roughly 8% down in the previous year. But does a typical FHA borrower, even a first-time home buyer who may not have a long credit history, have to pay that much down for a home? No. 3.5% is available for all financially qualified FHA borrowers. But even this down payment could be a financial burden depending on circumstances, which is why FHA loan rules allow for gifts of down payment funds from employers, relatives, or friends. You can also find a down payment assistance program in your local area to help, if | more...

March 4, 2019

FHA Home Loan Approval By The Numbers

By Bruce Reichstein

Do you know what it takes to get a home loan approved? When you apply for an FHA mortgage loan or an FHA refinance loan, you should know about the following numbers and how they work together to get you into your first home or an upgrade to a newer property as a repeat home buyer. FHA Home Loan Approval Numbers: One One is the number of people obligated on the loan who are required to live in the real estate secured by the FHA mortgage as their full-time residence. At least one borrower obligated on the mortgage must live in the home as their primary home. FHA Mortgage Loan Approval Numbers: Two Two is the number of years of employment the lender is required to verify for all potential | more...

February 28, 2019

FHA Home Loan Answers For First-Time Borrowers

By Joe Wallace

First-time borrowers have many questions about FHA home loans. Here are some common questions and the basic answers, which should give you plenty to discuss with a lender when the time is right. What do you need to know about an FHA home loan? Can I Earn Too Much Money To Qualify For An FHA Mortgage? FHA loans do not have an income cap and these mortgages are not need-based loans. First-time home buyers may have financial constraints such as a tight budget and a need to save money up front on the transaction, and the FHA loan program is designed to help such borrowers with lower down payment requirements and the ability to finance certain closing costs. Do I Have To Live In The Home I Buy With An | more...

February 15, 2019

FHA Loan Policy Changes Regarding Income, Employment Verification

By Joe Wallace

The FHA and HUD have issued a Mortgagee Letter explaining recent policy changes that affect how borrowers will have their income and employment verified, among other issues. Mortgagee Letter 19-01, issued February 15, 2019, announces the specific inclusion of third-party vendors (TPV) for the purpose of income and employment verification. The change is needed, according to the Department of Housing and Urban Development, because FHA home loan rules in HUD 4000.1 did not previously mention third party vendors specifically. “FHA allows for electronic verifications as an option to a written Verification of Employment but makes no specific reference to TPV services. TPV provides an alternative means for verifying a Borrower’s employment, income, and assets which would eliminate the requirement for a Mortgagee to collect pay stubs, W-2s, and bank statements”. | more...

February 13, 2019

Will Another Government Shutdown Affect First-Time Home Buyers Applying For FHA Mortgage Loans?

By Joe Wallace

While threats of another government shutdown seem to be on-again, off-again, some potential FHA borrowers are wondering if there will be a repeat of the stalemate that brought the longest government shutdown in recent memory. And will FHA home loans be available to first-time home buyers if the whole affair repeats itself again? FHA Mortgage Loans Will Still Be Available During The Government Shutdown The kind of loan you buy a home with, FHA forward mortgages, will continue to be serviced during a possible shutdown as previously reported here and elsewhere, as discussed in the HUD/FHA contingency plan released prior to the last shutdown. Reverse mortgages, on the other hand, may once again be completely unavailable during the shutdown. FHA loans that cannot be processed using automated means-those that require | more...

February 12, 2019

HUD Announces Disaster Relief For Alaska Earthquake Victims

By Bruce Reichstein

Department of Housing and Urban Development has announced federal disaster assistance for the State of Alaska and those affected by the earthquake there. On January 31st, the President declared a major disaster area in Anchorage, Matanuska-Susitna Borough, and Kenai Peninsula Borough. A federal disaster declaration allows HUD to offer foreclosure relief and other assistance to those living in the affected areas. According to the press release, HUD offers immediate foreclosure relief to those with FHA mortgages in the disaster area. Borrowers should not delay in contact their FHA loan officers. Home loan disaster relief is not automatic and you will need to discuss your options with the lender as soon as possible once you know you will experience a delay in making payments. Borrowers are eligible for 100 percent financing, | more...

February 12, 2019

Rising Rent Versus FHA Home Loans For First-Time Home Buyers

By Joe Wallace

Real estate and home mortgage blogs in the first quarter are 2019 are still reporting on the rising rent trends in many areas of the country that seem to be encouraging renters to examine their home buying options. Did you know that rents increased in places ranging from Wichita, Kansas to Scottsdale, Arizona? The increases in those two areas was above 12% each. Studio apartment rents climbed roughly 5% higher by the end of 2018, and in Newark, New Jersey renters were on the receiving end of more than 17% higher rents from last year. If you are tired of renting and are considering buying a first home, consider these perks of the FHA home loan program: Low Down Payment Requirements For FHA Loans First time home buyers looking at | more...

January 17, 2019

Credit Advice For First Time Home Buyers

By Bruce Reichstein

First time home buyers worried about their credit scores and the ability to get approved for a first-time mortgage should take plenty of steps to address those concerns before loan paperwork is filed. It is a very good idea to consider preparing for your mortgage loan a full year ahead of time so you can work on credit issues such as on-time payments, credit card balances, etc. First-Time Home Buyer Credit Advice: Lower Your Credit Card Balances Your credit cards can be an effective tool for establishing credit, but you have to know what the lender looks for in that credit to justify approving the home loan. The older your credit is, the better, but it’s also best to pay down the balances so you are not carrying too much | more...