Articles Tagged With: FHA Appraisals

December 12, 2013

FHA 2014 Loan Limits

Recently we covered the FHA and HUD’s press release announcing changes in FHA loan limit policies. FHA loan limits have been changed in accordance with laws passed in 2008, which did not become effective until this year with regard to FHA loan limits. At the same time the FHA issued the press release announcing the changes, it also published a mortgagee letter describing the 2014 “floor” and “ceiling” for low-cost areas and high-cost housing markets, respectively. According to FHA Mortgagee Letter 2013-43, “The minimum FHA national loan limit “floor” is at 65 percent of the national conforming loan limit (which is $417,000 for a one unit property for the period January 1, 2014 through December 31, 2014). The “floor” applies to those areas where 115 percent of the median home | more...

December 11, 2013

FHA Announces New Loan Limits

By Joe Wallace

The FHA has announced changes to FHA loan limit policy. According to HUDNo.13-184, effective at the beginning of the new year in 2013, there will be new FHA single-family loan limits that comply with the Housing and Economic Recovery Act (HERA) of 2008. FHA Commissioner Carol Galante was quoted in the press release, saying, “As the housing market continues its recovery, it is important for FHA to evaluate the role we need to play…implementing lower loan limits is an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved.” The press release says that current standard FHA loan limits “for areas where housing costs are relatively low” will remain unchanged in 2014–that limit at the | more...

December 10, 2013

Closing the FHA Loan: Settlement Costs

By Joe Wallace

When you learn about FHA home loans, the phrase “cash required to close” is one you’ll soon become familiar with. One of the reasons so many experts recommend taking as much time as possible to prepare for a home loan? Giving yourself enough time to save up the money required to close the deal. The required 3.5% down payment is part of that, as are the payments you’ll need to make for appraisals and any required compliance inspection. But there are other costs as well; fortunately FHA loan rules in HUD 4155.1 instruct the lender to prepare an estimate sheet to give the borrower a better idea of what these expenses are. According to Chapter Five of HUD 4155.1, “For each transaction, the lender must provide the initial Good Faith | more...

December 5, 2013

FHA Loan Down Payment Sources: Disaster Relief Grants and Loans

By Joe Wallace

Whenever a natural disaster strikes and the affected counties become federally-declared disaster areas, one source of help comes from FHA loan programs such as the FHA 203(k) Rehab loan. There may also be FEMA, state and local assistance for borrowers trying to recover from storm damage or other disaster-related problems. Some can’t rehab a damaged home and must look for a new place to live. When it comes to new purchase FHA loans, could certain types of disaster relief count as a legitimate source of down payment funds? If those sources meet FHA approval, the answer could be yes. According to HUD 4155.1, Chapter Five Section B, “Grants or loans from state or Federal agencies, such as the Federal Emergency Management Agency (FEMA), that provide immediate housing assistance to individuals | more...

November 22, 2013

FHA Refinancing Loans With an Appraisal

By Joe Wallace

Borrowers interested in a non-streamline, credit-qualifying FHA refinance loan that features no cash back to the borrower will be interested in knowing some of the basics of this option including the maximum mortgage loan possible and details of the Up Front Mortgage Insurance Premium requirements. The rules that govern these types of refinancing loans are found in HUD 4155.1 in Chapter Three. Borrowers should note that there is no fixed single dollar amount limit for an FHA loan–your loan amount is determined by the fair market value of the home (which is determined by an appraisal) and your loan amount can be affected by the FHA loan guaranty limits in your county, plus any approved add-ons to the mortgage. When it comes to percentages, however, there are specific numbers. According | more...

November 21, 2013

Basic Information on FHA Refinance Loans

By Joe Wallace

When it’s time to refinance a home loan with an FHA loan, borrowers may wonder whether their situation qualifies for an FHA refinance, whether that’s a Streamline Refinance or a Cash-Out refinance loan. Obviously an homeowner with an existing FHA mortgage wouldn’t have a problem getting a streamline refinance loan, but what about those who have conventional or even VA loans? What do FHA loan rules say it takes to qualify for an FHA refinance? FHA loan rules on this subject are found in HUD 4155.1 Chapter Three Section A, under the heading, “General Information on Refinance Transactions”. It says in part: “A refinance transaction is used to pay off an existing real estate debt with the proceeds of a new mortgage for borrower(s) with legal title, and on the | more...

November 21, 2013

FHA Loans and “Non-Occupying Borrowers”

By Joe Wallace

We’ve gotten a variety of questions lately about the FHA loan rules for occupancy related to buying a single-family home. FHA loan rules state that a borrower must occupy the home purchased with a single-family FHA mortgage as his/her personal residence. But what about when two or more people are obligated on the FHA home loan? Are both required to meet this occupancy rule? FHA loan rules in HUD 4155.1 state that at least one person obligated on the FHA loan must live in the home as the primary residence. In cases where not all the borrowers will do so, the loan is classified differently and there are different rules that may affect the mortgage. According to HUD 4155.1, Chapter 2 Section B, “A non-occupying borrower transaction involves two or | more...

November 19, 2013

Credit Qualifying Information For FHA Loans: What Your Lender Needs

By Joe Wallace

It’s good to understand the process of FHA loan approval. Knowing what your lender is looking for on your credit application is an important part of being ready for an FHA mortgage application. When you fill out your credit forms, what does your lender do with all that data? When it comes to your credit information, the lender doesn’t just rely on what’s provided on your paperwork; FHA loan rules listed in HUD 4155.1 say the lender must request a credit report that consists of information from the three major credit reporting agencies in something called a Three Repository Merged Credit Report or TMCR. That data must include: –all inquiries made within the last 90 days –all credit and legal information not considered obsolete under the Fair Credit Reporting Act (FCRA), | more...

November 14, 2013

Looking For An FHA Loan In Another Part Of The Country? A New HUD Tool Could Help

By Joe Wallace

Not everyone looking for a home with an FHA loan has the luxury of being able to drive through a lot of neighborhoods to look at all the “for sale” signs. Some are forced to look for a new home out of necessity–a job relocates to a new city, a new promotion requires a change of address, sometimes even natural disasters can urge a house hunter to look elsewhere. A lot of people feel at a disadvantage when it comes to looking for homes in a city other than their own, which is why the Department of Housing and Urban Development has created a new tool to help FHA loan applicants and anyone else looking for a home loan. According to a recent FHA/HUD press release, U.S. Housing and Urban | more...

November 12, 2013

Current FHA Loan Rules For Applying For A New Loan After a Short Sale

By Joe Wallace

Mortgage loan rules can change over time for a variety of reasons. Borrowers who researched their loan options a year or more ago may be surprised to learn that the rules that applied at the time they explored their options may have changed due to regulatory requirements, financial institution policies, or FHA program rule updates. With that in mind, here is the current FHA guidance regarding a borrower’s options for applying for a new FHA mortgage loan following a short sale. FHA loan rules published in HUD 4155.1 state that while having a short sale on your financial record is not grounds in itself for disqualifying a borrower, certain requirements and restrictions may apply. “A borrower is not eligible for a new FHA-insured mortgage if he/she pursued a short sale | more...