Articles Tagged With: FHA Appraisals

January 17, 2013

Virginia Beach-based Realty Company Settles Discrimination Case with FHA

The FHA and HUD have issued a press release announcing the settlement of a housing discrimination case involving a company in Virginia Beach, VA. According to HUDNo.13-006, “Virginia Realty Company of Tidewater, Inc., a property management company based in Virginia Beach, VA, will pay $82,500 to settle allegations that it refused to allow a Hispanic woman to apply for an apartment because she did not speak fluent English. Virginia Realty had a policy of not renting to persons with limited English proficiency. The Fair Housing Act prohibits discrimination in the rental of housing on the basis of national origin.” The press release adds a quote by John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity, who states, “Denying housing because a person does not speak English well violates | more...

January 14, 2013

FHA Loan Questions on Legal and Tax Issues Related to FHA loans

By Joe Wallace

There have been several questions lately about legal issues. Here’s one–a reader asks: “I live in a Michigan condominium that will have a special vote of our co-owners on 1/24/12 to determine if our association will make application under the HUD Review and Approval process (HRAP) to obtain FHA certification for our Association.” “In advance of this vote, our Board of Directors issued an opinion letter to our co-owners urging them to vote NO citing outdated 2008 FHA guidelines as the basis for their opinion, even though they are aware of the HRAP requirements that went into effect in 2010. If this proposal is defeated in our election, has by Board of Directors exposed my association to a potential discrimination suit because they intentionally mislead our co-owners in their opinion | more...

January 10, 2013

FHA Streamline Refinance Loans Without An Appraisal

By Joe Wallace

FHA Streamline loans are described in the official rules (HUD 4155.1) as follows: “Streamline refinances • are designed to lower the monthly principal and interest payments on a current FHA-insured mortgage, and • must involve no cash back to the borrower, except for minor adjustments at closing, not to exceed $500.” The no-cash-out rule makes FHA Streamline Refinance loans different than cash-out refinances. Streamline loans may be done with or without an appraisal. According to FHA loan rules, when a Streamline Refinance is done without an appraisal, the following applies: “Generally, the streamline refinance mortgage amount may never exceed the statutory limits, except by the amount of any new upfront mortgage insurance premium (UFMIP). However, the maximum mortgage may exceed the statutory limits on certain specialty products.” Additionally, there are | more...

January 8, 2013

FHA Loan Reader Questions: Manufactured Home Rules

By Joe Wallace

A reader asks, “What requirements does a factory built home (manufactured or modular)have to meet to qualify for FHA financing? I am particularly interested in any “age” limitations/recognitions/requirements/etc.” It’s true that there are FHA loans for certain types of mobile homes/manufactured homes, modular homes, etc. During the housing crisis, these loans were more difficult to come by; many lenders were not willing to underwrite FHA loans on these types of properties. But with a recovering housing market and rising property values, some borrowers are finding their lenders willing to consider these types of FHA loans once more. To answer the reader’s question, it was necessary to reference the Department of Housing and Urban Development’s Frequently Asked Questions database, which states; “To determine basic eligibility for FHA mortgage insurance, all manufactured | more...

January 4, 2013

Bank Of America Settles In FHA Sexual Orientation Discrimination Case

By Joe Wallace

A press release issued on January 2, 2013 announces a settlement between the Department of Housing and Urban Development and Bank of America regarding a discrimination case filed by the government. According to HUDNo.13-001, “The U.S. Department of Housing and Urban Development today announced an agreement with Bank of America (BOA) to settle a claim that the mortgage lender refused to provide financing to a lesbian couple. The agreement is the first enforcement action taken against a lender involving HUD’s recent rule ensuring that the Department’s core housing programs be open to all eligible persons, regardless of sexual orientation, gender identity, or marital status.” The case involves alleged violations of the HUD rule “Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity” which prohibits lenders from | more...

January 3, 2013

FHA Case Number Cancellation: A Reader Question

By Joe Wallace

A reader asks, “Is it possible for the previous lender to cancel the FHA Case Number?” There is a bit of detail missing from this question that makes it a bit difficult to answer properly–is the reader asking whether a lender may cancel an FHA case number (or should) when the loan is transferred from one bank to another? Is the question simply asking whether it’s possible to cancel an FHA case number as opposed to letting it expire? Assuming this question involves a borrower who tried one lender, but decided to go with another, what do the FHA and HUD have to say about FHA case number cancellation? The rules are clear–lenders do not cancel FHA case numbers in these cases, they are expected to cooperate in the transfer | more...

December 31, 2012

FHA Streamline Refinance Loans: Lower Interest and/or Mortgage Payments

By Joe Wallace

With interest rates at lows not seen in many years, many FHA borrowers are considering refinancing their existing FHA home loan even if they have previously refinanced in the last few years. While some consider the term “serial refinancing” to be negative, this practice is in vogue once more as many rush to get better interest rates than they had access to when they first applied for a mortgage loan. Refinancing is especially popular at present due to concerns over the “fiscal cliff” and its potential to affect the average person’s bottom line through higher income taxes, the possible reduction or elimination of certain tax breaks including the mortgage interest deduction. Is now the right time to pre-qualify for an FHA refinance loan or apply for FHA streamline refinancing? That’s | more...

December 28, 2012

What You Should Know About FHA Loan Rules For Investment Property Vs. Single Family Homes

By Joe Wallace

While there are some exceptions described in the FHA loan rulebook, FHA loans for single-family homes are limited to what the FHA describes as “owner-occupied principal residences only”. The FHA describes “principal residences” as a property that “will be occupied by the borrower for the majority of the calendar year”. We’ve covered this topic elsewhere in previous posts; what we’re discussing today is situations where the borrower may perceive a gray area in the rules–what situations are considered purchases for investment purposes versus single-family home loans as described above? In general, any loan where the following applies to the borrower may be considered a non-investment type purchase: “FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower’s principal residence within 60 days of | more...

December 24, 2012

FHA Revises Flood Zone Determination Policy

By Joe Wallace

The FHA and HUD have issued revised and updated guidance for borrowers and lenders regarding its flood zone determination policy. On December 11, 2012, the FHA official site was updated to include Mortgagee Letter 2012-28, which is intended to overrule a previous Mortgagee Letter issued in 2010 on the subject. At one time, those applying for FHA loans were not affected by a mandatory flood zone determination policy. In the past lenders were “strongly encouraged” to get a flood zone determination for home purchased with an FHA insured mortgage. That policy was revised, and is now updated and re-stated in FHA Mortgagee Letter 2012-28. According to the new mortgagee letter, “FHA requires all mortgagees obtain a flood zone determination on all properties. The documentation provided to evidence the flood zone | more...

December 21, 2012

Can A House Seller’s Appliances Reduce The Amount of My FHA Loan?

By Joe Wallace

When you want to buy a home with an FHA loan, unless you’re having a house built to spec, chances are good that appliances like a washer/dryer, stove, refrigerator and other items could be included in the purchase. In some cases this is not a problem, but depending on what the buyer and seller agree will “come with the house” as part of the purchase, could such items reduce the amount of your FHA loan? There’s an FHA loan rule about something known as an “inducement to purchase”. A seller is permitted to make a contribution to some financial aspects of the FHA loan (but not the down payment) in order to make the deal more attractive. Those contributions are limited as part of “the six percent rule”. According to | more...