November 2, 2011
Allied Home Mortgage Corporation is no longer allowed to do business with the FHA or HUD, according to a November 1, 2011 press release from the Department of Housing and Urban Development. “The U.S. Department of Housing and Urban Development
October 28, 2011
FHA loan applicants naturally want to know how much mortgage they are qualified to get–how much can an FHA borrower receive on an FHA insured home loan? The answer isn’t as simple as a fixed dollar amount. There are many things that factor in to the final FHA home loan amount and not all of them are connected to the sale price of the home. Your FHA loan amount is influenced by the current state of the housing market, the interest rate on the loan, the asking price on the property and the fair market value of the home. The first and most obvious factor that can affect an FHA home loan amount is the borrower’s qualifications. How much are you qualified to borrow based on your income and debt | more...
October 27, 2011
There are many frequently asked questions about FHA loans in connection with rental properties. Some borrowers purchase a home with an FHA insured mortgage and live there for a while, then decide to explore their options for renting the existing home out and purchasing a new one to live in. One of the most common questions in this case has to do with qualifying income for a new FHA loan. “Can I rent my current home and use the income to qualify for a new FHA mortgage?” According to the FHA official site, there was concern that borrowers might exaggerate the amount of rental income received on the first property. To address those concerns, the FHA instituted a new policy which took effect in late 2008. “Beginning with case number | more...
October 26, 2011
A frequently asked question about FHA home loans concerns the length of time it takes to learn whether the loan application has been approved or not. This is a part of the FHA loan process that can be stressful for some borrowers, especially those who have never applied before and don’t know what to expect. The simple answer is that FHA requirements include a rule that the lender must take action on your application and let you know about that action no later than 30 days after the application has been completed and turned in. FHA rules emphasize the application must be complete for this rule to take effect. But what does that mean? Some borrowers mistakenly think submitting partial information on credit data, employment history or other information might | more...
October 18, 2011
When an FHA loan applicant finds a home they are serious about purchasing, an offer is made for the property and a process is set in motion that leads to the FHA loan being approved or denied. When the loan is approved, it means the property has been appraised by an FHA-approved appraiser. In some cases a home may pass the appraisal process with few or no required improvements or repairs. In other cases a home may be rejected as unsuitable because of the condition of the property, but in many other cases a home may be approved for an FHA mortgage provided certain repairs or improvements are made as a condition of the sale. In such cases, depending on the repairs, the borrower or seller may be required to | more...
October 17, 2011
A recent reader question came in about FHA appraisals. “How do I file a complaint about a lemon home? It was inspected by an FHA approved inspector.” This question raises two very important issues. Does the FHA “inspect” properties? If not, who does? The FHA requires an appraisal before an FHA loan will be approved and can move to closing. The appraisal is designed to insure the property meets minimum standards, is safe and livable, and the appraisal also establishes a fair market value. But an FHA appraiser is not an inspector. The FHA appraisal process is not designed to guarantee the home is free from defects or problems. The appraisal process does not guarantee your home is problem-free. Before a borrower commits to purchasing the home, or as a | more...
October 5, 2011
FHA mortgages have a number of features which make them more advantageous for qualified borrowers than many conventional loans. A low down payment requirement is one of those advantages, as is more forgiving requirements for credit history. Contrary to what some believe, there is also no maximum income limit for a typical single-family FHA home loan. In addition to these advantages, there are also a list of rights all borrowers have that protect them in the loan application and purchasing process. Did you know all borrowers have the right to know which fees are refundable and which are not should the loan agreement be canceled? You have the right to have these fees explained to you before you commit. Home buyers also have the right to be fully informed when | more...
October 5, 2011
Borrowers who seek FHA insured home loans are required to submit credit, employment and income information to the lender in order to be approved for the loan. The borrower’s information is reviewed by the lender, but must also be verified to insure the information is current and accurate. In addition to verifying the information submitted, the lender is also required to get credit reports on the borrower. But what happens when the borrower disputes information on a credit report? For example, if a credit report states that a collection action is outstanding, but the borrower claims the bill has been paid, the lender may be required to use something called a Residential Mortgage Credit Report (RMCR) instead of the standard credit report known as a three repository merged credit report | more...
September 15, 2011
The FHA requires an appraisal for any property to be financed with an FHA insured mortgage. The appraisal insures the home meets FHA standards and establishes a fair market value for the home. But an appraisal is not considered an inspection, and just because the home passes the appraisal process with little or no recommendations for repairs or improvements does not mean the house is free from defects. FHA encourages borrowers to hire a home inspector to examine the home prior to purchase. Borrowers should consider putting a clause in their purchase agreements that make final commitment to the loan contingent on the results of a home inspection. The borrower is responsible for paying for the inspection, and choosing one is just as important as having the work done. Some | more...
September 13, 2011
A recent press release issued by the Department of Housing and Urban Development underscores the FHA and HUD’s commitment to the Fair Housing act. The release details actions taken by HUD against a Wisconsin landlord for alleged violations of the Fair Housing Act. While a press release about a discrimination issue connected with rental property might not seem to have much to do with FHA home loans at first glance, it does underscore the need for FHA borrowers to report such discrimination wherever they encounter it in the loan or house hunting process. According to HUD press release 11-207, “The U.S. Department of Housing and Urban Development (HUD) is charging a La Crosse County, Wisconsin landlord with violating the Fair Housing Act for refusing to rent a house to a | more...