Articles Tagged With: FHA Appraisals

November 5, 2012

FHA Loans: What is the 203(b) Home Loan Program?

If you go to the FHA official site to do some research on your FHA loan options, it can be a bit challenging to navigate the programs–there are a lot of different types of FHA loans to choose from including the 203(b), the 203(k), and many others. Some borrowers want to cut through all the names, acronyms, and jargon to learn about the FHA’s basic home loan program. If you’re one of those people, know that the FHA 203(b) home loan program is the one you’re looking for. In the words of the Federal Housing Administration, the purpose of the FHA 203(b) loan is to “provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a | more...

November 1, 2012

What is the FHA Minimum Credit Score: A Reader Question About FHA Loans

By Joe Wallace

A reader asks, “What is the minimum credit rating score needed to be considered for an FHA loan?” This question comes up very frequently, and the answer is always a two-parter. For starters, borrowers should understand the FHA’s minimum FICO credit score requirements. These requirements are described on the FHA official site as follows: For FHA loans with case numbers “assigned on or after 10/04/10”, FHA loan rules state: When the decision credit score is:

October 26, 2012

Are You Eligible For an FHA Mortgage?

By Joe Wallace

FHA loans are sometimes misunderstood–some people think FHA mortgages are only for low-income families, others wrongly assume only first-time home buyers can qualify for an FHA loan. The FHA does provide a list of guidelines that list who is eligible–and who is not–to apply for an FHA mortgage or refinance. The FHA loan rules include guidelines on credit scores and minimum age–which we discuss below. The rulebook that describes these things is called HUD 4155.1. In this guideline you’ll find the following: “FHA insures mortgages made to individuals with valid Social Security numbers (SSN), and under the conditions described in this section, to state and local government agencies, and approved nonprofit organizations. Note: Employees of the World Bank, foreign embassies, etc., may not be required to have an SSN. Conclusive | more...

October 25, 2012

FHA Loan Reader Question: What Does “Endorsed” Mean?

By Joe Wallace

A reader asks, “Can you please explain what “endorsed” means? I started my FHA streamline refi process March 11, 2009 through Countrywide. In the meantime BoA purchased Countrywide and the refi wasn’t finalized until June 29, 2009. Its not my fault the process took so long, and I sincerely hope I am not losing out on a refi or decrease PMI because of their delays!” This reader question most likely refers to FHA mortgagee letter HUDNo.12-045, which includes the following information about FHA Streamline Refinancing: “…Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA

October 18, 2012

Rules For Credit Reports Associated With FHA Loan Applications

By Joe Wallace

Some FHA loan applicants may consider the credit check something of a mystery. Borrowers should know and understand how the FHA loan application process works–including the credit check–as it can help better prepare the borrower for the preparation needed to get an FHA loan approved. What does the lender need–and get–from the credit check process? Many lenders rely on something known in the industry as the “three repository merged credit report” or TRMCR to gather the borrower’s credit information. According to FHA loan rules, this report must contain information on all credit inquiries made within the last 90 days, any credit and legal data “not considered obsolete under the Fair Credit Reporting Act (FCRA)” which may include the last seven years worth of information about bankruptcy, court judgments, lawsuits, tax | more...

October 16, 2012

Exceptions to the FHA Mortgage Insurance Payment Eligibility Date Rule: A Reader Question

By Joe Wallace

On March 6, 2012, the FHA and HUD issued Mortgagee Letter 2012-4, which included the following description of a decrease to the annual Mortgage Insurance Premium for “certain Streamline Refinance transactions”: “For all SF Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 bps, regardless of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012.” Additionally, the same document describes further changes to the up front mortgage insurance payments for these same loans: “For all SF Forward Streamline Refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, the | more...

October 15, 2012

FHA Streamline Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “I am curious about how to get a lower interest rate on my currently FHA backed SFR home loan. I have a 30-year fixed 5% interest rate and am trying to lower my monthly payments with the current low interest rates

October 12, 2012

Can I Use A Power of Attorney To Apply For An FHA Home Loan?

By Joe Wallace

A not-so-commonly asked question, but a very important one about FHA loan rules, involves the use of a power of attorney to apply for or commit to an FHA mortgage loan. FHA loan rules state, “All borrowers applying for the mortgage and assuming responsibility for the debt must sign Fannie Mae Form 1003, Uniform Residential Loan Application (URLA), and all addenda.” “Either the initial loan application or the final, if one is used, must contain the signatures of all borrowers. The initial loan application may not be executed by power of attorney except for military personnel and incapacitated borrowers…” What does this mean? In short, there are only two types of FHA borrowers permitted to have a loan executed on their behalf by a power of attorney; the FHA official | more...

October 10, 2012

FHA Loan Reader Questions: FHA Loans for Manufactured Homes and Land

By Joe Wallace

A reader asks, “Since FHA loan program includes Manufactured homes what about if you want to have your own land to put the house on. Will the loan cover the home and land?” Here’s a partial answer from the FHA official site: “HUD’s FHA program insures two types of mortgages. Title II insures mortgages on qualifying manufactured homes sold with land and meeting other requirements. FHA’s Title I program can provide information to consumers interested in obtaining HUD-insured loans. You may also want to contact lending institutions in your area (or the area where you want to purchase your home) for additional financing options.” The FHA Title II program mentioned above includes a requirement that the mortgage is intended for “both the manufactured unit and its site”. FHA Title II | more...

October 9, 2012

FHA Loan Reader Question: Why Couldn’t I Qualify For an FHA Loan?

By Joe Wallace

A reader asks, “I have really been working on my credit to be able to purchase a home. My scores are 618 – 595 – 540. I paid my student loan off in full. I went and got a unsecured credit card to help boost my scores…when people check your credit the numbers roll back…I have an auto loan for just over a year that is in good standing.” “I also paid off 2 vehicles and have been at my job now for just over 16yrs….Why, Why, Why couldn’t I qualify for this loan?” There are a number of reasons why a borrower might not be approved for an FHA mortgage, but in this reader’s case the FICO score could be one of those reasons. Why? According to FHA loan | more...