Timely news, information and advice concentrating on FHA, VA and USDA residential mortgage lending.

Vimeo Channel YouTube Channel

Articles Tagged With: FHA Appraisals

June 6, 2012

FHA Loans and Government Assistance Payments–Do They Count As Verifiable Income?

By Joe Wallace

One frequently asked questions about FHA home loans involves government benefits and/or government assistance payments. Can these income sources be used for the purpose of getting an FHA guaranteed home loan? Under the right circumstances, the answer is yes. It’s not automatic–the lender must verify the source of the income and also determine how long that income will last. According to HUD 4155.1 Chapter 4 Section E, “Income received from government assistance programs is acceptable for qualifying, as long as the paying agency provides documentation indicating that the income is expected to continue for at least three years.” Borrowers aren’t simply out of luck if that income will not last for three years; it can’t be used as income, but it can be considered in other ways according to the | more...

 

May 29, 2012

FHA Loan Reader Questions: Unsettled Credit Report Details

By Joe Wallace

A reader asks, “There are two old debts from 2003 that I have not been able to verify on my credit report. The total of this is $520, the underwriter on the mortgage has been relentless about this debt. I will not pay for something that do not know what it is for. Does this affect my FHA loan?” Reader questions like these come in quite often. Some of them seem to be asking whether the FHA has a rule that gets around a lender’s insistence on a specific issue connected with the FHA loan; a requirement such as a minimum waiting period following a bankruptcy proceeding or the example cited in the reader’s question here. Do FHA loan rules trump the financial institution’s policies in such cases? Can the | more...

 

May 25, 2012

FHA Rules For Streamline Refinancing With or Without a Credit Check

By Joe Wallace

FHA Streamline Refinancing loans–which are issued for those with existing FHA mortgages–are available in two ways. One is a non-credit qualifying streamline loan which is available to qualified borrowers, the other is the “with credit check” or “credit qualifying” streamline refinance. When is a borrower eligible for a no-credit check FHA streamline loan? Part of the answer requires a look at the FHA definition of the streamline loan. According to the FHA official site, “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 that are not to exceed $500.” The FHA permits streamline refinancing loans with no credit check with the borrower has owned the property for | more...

 
FHA Home Loan Basics

May 23, 2012

More on FHA Loan Pre-Purchase Counseling

By Joe Wallace

Recently we reported on a study conducted by FHA/HUD that examined the effects of pre-purchase counseling for house hunters. According to a May press release, HUD No. 12-085, the Pre-Purchase Counseling Outcome Study, “enrolled 573 individuals seeking pre-purchase counseling services in fall 2009 from 15 HUD-funded counseling agencies across the country.” “The objectives of the study were to examine the characteristics of pre-purchase counseling clients, the types of services they received, and whether and under what circumstances they purchased housing in the 18 months after starting counseling.” The results of this study have been published by the FHA and HUD, and for those on the fence about whether or not to take advantage of such counseling services, the data is quite convincing. Potential FHA borrowers who find themselves in the | more...

 

May 21, 2012

FHA Loan Rules For Credit Qualifying Streamline Refinancing Loans

By Joe Wallace

FHA home loans aren’t just for new purchase mortgage transactions, there are also different types of refinancing loans available. FHA streamline refinancing, so named because of the reduced amount of paperwork and procedures associated with underwriting the refinancing, is one such option. FHA streamline loans come in two basic types–no-credit-check refinancing and credit qualifying refinancing loans. Borrowers may or may not be eligible for the no-credit-check version of the FHA streamline loan, depending on the circumstances. For borrowers who are applying for a credit qualifying FHA streamline loan, the FHA has a set of rules to be aware of–when applying for credit qualifying streamline refinances, the lender is required to do the following: –View and verify the borrower

 

May 18, 2012

HUD Studies Reveal Important Benefits Associated With Housing Counseling

By Joe Wallace

A press release from the Department of Housing and Urban Development says FHA/HUD approved housing counseling offers significant benefits “for families who purchase their first homes and those struggling to prevent foreclosure”. Those benefits were the focus of two HUD research projects. According to HUDNo.12-085, ” HUD found housing counseling significantly improved the likelihood homeowners remained in their homes” . That finding comes from two housing counseling research projects, one that involved pre-purchase counseling and one focusing on foreclosure avoidance counseling by HUD-approved agencies. “Both the pre-purchase counseling and foreclosure counseling studies enrolled clients in the fall of 2009 and early 2010. HUD found that 35 percent of participants became homeowners within 18 months of pre-purchase counseling and only one of those buyers subsequently fell behind in their mortgage payments.” | more...

 

May 16, 2012

FHA Loan Reader Questions: Loan Approval For Self Employed Borrowers

By Joe Wallace

A reader asks, “Is it true that FHA will not approve a loan if you have only been self-employed at your current business for 1 1/2 years? Applied for an FHA loan, was self-employed in a retail business for 5 years, sold my interest in the business and opened another retail business. My newest business has been open 1 1/2 years. Can I still get financed (credit score and debt to income ratio is excellent)?” The FHA loan rules are clear about minimum employment times in general–there are no minimum requirements for the amount of time spent on any one job. According to HUD 4155.1, Chapter , Section D; “To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held | more...

 

May 8, 2012

FHA Appraisal Questions and Answers

By Joe Wallace

There are many frequently asked questions about FHA appraisals, and while this is not meant to be an exhaustive list of answers, we do cover some of the most common questions here: Am I required to get an appraisal for an FHA home loan? The FHA rules say all properties to be purchased with an FHA mortgage must be appraised by an FHA appraiser. There is only one type of exception–the FHA rules permit “certain streamline refinance transactions” to be processed without an appraisal. It’s important to remember that a lender is free to require an appraisal even when the FHA does not require one. What is the FHA policy on reusing appraisals? The official word on this subject is found in the HUD publication 4155.2. The section titled “FHA | more...