Articles Tagged With: FHA and HUD

the importance of credit for home loan approval

June 12, 2018

Home Loan Anxiety Part 2: Credit Issues Before Applying For An FHA Mortgage

Do you suffer from “home loan anxiety”? Are you worried about your ability to qualify for an FHA mortgage loan? There are some important issues you should know about that can help reduce your worries about applying. The key is to address your concerns early enough in the planning stages of your new loan to make a real difference. Worried About Your Credit And How It Might Affect Your Home Loan Application? One of the best things any borrower suffering from anxiety over a home loan application can do is to contact the FHA directly at their toll-free number (1-800 CALL FHA) and request a referral to a local, HUD-approved housing counselor who can offer advice on preparing for an FHA loan application. The help of a housing counselor in | more...

June 8, 2018

FHA Loan Rules: Can The Seller Provide Appliances As Part Of The Sale?

By Bruce Reichstein

FHA home loan rules in HUD 40001. state that a seller can make contributions as an incentive to a buyer considering the purchase of the seller’s property with an FHA mortgage. But those contributions are limited to six percent of the purchase price. Anything more constitutes something known as an inducement to purchase. The FHA loan rules don’t penalize the borrower or seller for this per se, but anything deemed an inducement to purchase will result in a dollar-for-dollar reduction in the loan amount based on the financial value of those inducements (which, again, are in excess of six percent of the purchase price.) All that said, FHA loan rules also exclude certain seller contributions from consideration under the six percent rule; the seller can freely add certain things without | more...

Five FHA Home Loan Questions To Ask Your Lender

June 5, 2018

FHA Mortgage Loan Rules For Earnest Money Deposits

By Joe Wallace

When it’s time to get serious about a home you want to buy with an FHA mortgage loan, the payment of earnest money is an important step toward owning the property. FHA loan rules have specific requirements for earnest money deposits; like other payments associated with your home loan transaction, there are requirements for the payment and sourcing of these funds. The FHA Loan Handbook, HUD 4000.1, explains that the lender is required to verify and document the borrower’s earnest money deposit including the amount and the source when the earnest money exceeds one percent of the sales price or, as HUD 4000.1 explains, “is excessive based on the Borrower’s history of accumulating savings”. In such cases the lender must obtain: A copy of the borrower’s canceled earnest money check; | more...

April 23, 2018

FHA Home Loan Options: Build, Buy, Or Rehab

By Joe Wallace

Build, buy, or rehab? Those are among the options open to FHA home loan applicants. Do you know what is possible with an FHA mortgage loan? The options range from purchasing an existing 1-4 unit home to having a single-family house built from scratch using an FHA One Time Close construction loan. FHA Home Loans: The “Forward Mortgage” “Forward mortgage” is a fancy way of describing the new purchase loan-an FHA mortgage that will help you buy a home. “Forward mortgages” are described as such to distinguish them from Home Equity Conversion Mortgages (HECM) or as they often called, Reverse Mortgages. A forward mortgage can include purchase of land and funds for a construction phase when an FHA One Time Close loan is being used to build to suit. FHA | more...

April 12, 2018

FHA One-Time Close Construction Loans: An Option You Should Consider

By Bruce Reichstein

The FHA One-Time Close / Single-Close construction loan is an option you should consider if you are interested in having a home built for you rather than purchasing an already-lived-in property. Construction loans are different than existing construction loans, and the FHA One-Time Close (OTC) / Single-Close construction loan offers a single application, a single closing date, and more peace of mind for the borrower once the loan has been approved. FHA One-Time Close / Single-Close Mortgages And FICO Score Requirements You will have higher credit requirements with an FHA One-Time Close loan due to the higher risk for the lender. Your application may require a FICO score of 620 or higher at the minimum, depending on the lender. Here’s a sample breakdown of FICO score requirements from one hypothetical | more...

March 15, 2018

HUD Announces Additional Hurricane Recovery Efforts In Houston

By Bruce Reichstein

The Department of Housing and Urban Development has announced a Fair Housing agreement with the City Of Houston designed to enhance hurricane recovery efforts there. According to a press release at the FHA/HUD official site, HUD and the city reached, “a joint agreement designed to expand housing choice and mobility for lower income residents, including those experiencing homelessness and victims of Hurricane Harvey.” The agreement includes a new requirement for the City of Houston to adopt “multifamily priorities and a policy for objectively evaluating federally supported affordable housing developments in all areas of Houston; to seek to invest additional funds in homeless assistance programs, and; to encourage more landlord participation in Houston’s housing voucher program”. “Today, we announce a positive agreement that works to expand housing options for lower income | more...

March 1, 2018

FHA Appraisal Rules And Model Building Codes

By Bruce Reichstein

When it comes to FHA appraisal rules, it’s easy to forget that the appraisal requirements and minimum property standards set by the FHA are not the only regulations which must be followed. State law, and local building codes also apply. The FHA/HUD official site includes instructions to participating lenders and appraisers about model building codes and how FHA mortgage appraisal rules work together in the FHA loan transaction process. According to FHA.gov, “The Minimum Property Standards (MPS) establish certain minimum standards for buildings constructed under HUD housing programs. This includes new single family homes, multi-family housing and health care type facilities”. At one time there were a variety of minimum property standards for different types of properties. But since the era of the 1980s, the Department of Housing and Urban | more...

February 23, 2018

FHA Announces Foreclosure Avoidance Help For Federal Disaster Areas

By Joe Wallace

The FHA has announced extended foreclosure relief measures for those in qualifying federal disaster areas. According to a press release on the FHA official site, new guidance for participating FHA lenders will apply for those affected by a wide range of natural disasters including: Louisiana (Hurricane Harvey) DR-4345 Texas (Hurricane Harvey) DR-4332 Florida (Hurricane Irma) DR-4337 Georgia (Hurricane Irma) DR-4338 Puerto Rico (Hurricane Irma) DR-4336 South Carolina (Hurricane Irma) DR-4346 Virgin Islands (Hurricane Irma) DR-4335 Puerto Rico (Hurricane Maria) DR-4339 Virgin Islands (Hurricane Maria) DR-4340 California (Wildfires) DR-4344 or California (Wildfires, Flooding, Mud Flows, Debris Flows) FEMA-DR-4353 There is a lengthy description of some of the new program changes (which we will cover in another blog post) but one of the most important developments included in the FHA announcement has | more...

February 20, 2018

HUD Announces Resolution In California Fair Housing Case

By Joe Wallace

The Department of Housing and Urban Development has announced the resolution of a California Fair Housing Act discrimination case. According to a press release at the HUD official site, the agency has reached an agreement with the Housing Authority of the County of Contra Costa (HACCC) and the Vallejo Housing Authority (VHA), “resolving allegations that they violated the Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act when they allegedly denied a request by a resident with disabilities to extend her search time to find suitable housing that would accept her Housing Choice Voucher”. Fair Housing Act laws make it illegal to discriminate against those buying or renting a home by “denying or limiting housing to persons with disabilities, or discriminating in | more...

February 19, 2018

Happy Presidents’ Day 2018

By Bruce Reichstein

Happy Presidents’ Day 2018! Today banks and markets are closed, and we pause from our usual schedule of writing posts and answering questions about FHA home loans to observe the holiday. We return with our regular content schedule tomorrow. Thank you very much for reading!