Articles Tagged With: FHA Condo Loan

October 18, 2012

Rules For Credit Reports Associated With FHA Loan Applications

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 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...

September 26, 2012

FHA Loan Rules: Occupancy Requirements

By Joe Wallace

A reader asks, “I purchased a home in 2006 with an FHA loan. At the time, I remember a stipulation that I was required to reside in the house, for three years (I believe), which I did.” “I have since moved and rented out the property, and just received a letter from my mortgage company that they had received word that my mailing address had changed, and that per the terms of my FHA loan, I was required to occupy the house until the mortgage was paid off, and that I may be facing tax penalties.” “They have asked me to sign a form verifying that I still occupy the house and will do so until the mortgage is paid in full. Are there any types of first time homeowners | more...

September 24, 2012

FHA Condo Project Approval Guidelines Change: Homeowners Association Rules

By Joe Wallace

We’ve reported many new changes to the FHA condo approval process that allows a condominium project to be considered for an FHA loan for individual units. Condo projects must be FHA approved before a borrower can apply for an FHA guaranteed mortgage on a unit in that condo project; that means a project’s compliance with FHA loan rules is very important. For example, a condo project may not be approved for an FHA mortgage loan if there are restrictions on the borrower’s ability to freely sell the property. The FHA has gone back and forth on an issue related to “the right of first refusal” which limits a borrower’s ability to sell. Condo loan applicants have reported problems with the right of first refusal clause, getting turned down for FHA | more...

September 20, 2012

FHA Loans After Foreclosure: A Reader Question

By Joe Wallace

A reader asks, “I filed for bankruptcy over 3 years ago. My home was included because I did not sign a reaffirmation agreement. However the bank did not require me to move out because I was not in arrears with the mortgage and never missed a payment.” “About 18 months ago I was forced to move to be closer to my job due to vision problems. My doctor told me to not drive. I had to move out of the blue and the bank foreclosed a year ago. I was told that foreclosures was necessary to get my name off property but I was not legally responsible for the debt due to bankruptcy. Will the foreclosures prevent me from qualifying for an FHA home loan?” This is a complex situation | more...

September 19, 2012

FHA Condo Loan Rules: Pre-Sale Requirements

By Joe Wallace

The FHA recently updated its condo project approval rules to include changes in pre-sale requirements. FHA loan rules permit loans on condo units as long as the condo project is FHA approved. Part of the process of getting condo approval includes meeting FHA guidelines on critical areas such as pre-sale requirements. The new FHA loan rules for pre-sales are now updated. According to FHA Mortgagee Letter 2012-18, “The requirements of Section 3.4 of the Guide are replaced by the following updated policy guidance.” That guidance includes: “At least 30 percent of the total units must be sold prior to endorsement of a mortgage on any unit.

September 19, 2012

FHA Loan Rule Changes For Condominium Project Approval: Investor Ownership Guidelines

By Joe Wallace

The FHA and HUD recently updated condo project approval guidelines in the Mortgagee Letter 2012-18. The mortgagee letter states, “It was determined that certain policy adjustments were needed to address current housing market conditions”. The letter adds, “This ML is effective for all condominium project approvals,recertifications, annexations or reconsiderations submitted for review as of the date of this directive unless otherwise specified in a particular information block. This approval process will apply until August 31, 2014, unless further extended by FHA.” Part of the revised guidelines for condo project approval? Investor ownership rules. Under the section title, “Investor Ownership Section 2.1.4” you’ll find the following: “The requirements of Section 2.1.4, Investor Ownership are replaced by the following updated policy guidance. A unit that is occupied as a principal residence is | more...

September 18, 2012

FHA Issues Revised Condo Project Approval Guidelines For Non-Residential Use

By Joe Wallace

The FHA and HUD have issued revised condo project approval guidelines for a number of areas, including the rules governing non-residential use of condo project floor space. According to Mortgagee Letter 2012-18, “This Mortgagee Letter (ML) puts in place temporary condominium project approval guideline changes to some of the current FHA condominium approval policy provisions.” The letter also says, “These changes replace, for the period specified by this ML, certain approval requirements specifically identified in this ML that were established in ML 11-22 and the attached Condominium Project Approval and Processing Guide (Guide). It was determined that certain policy adjustments were needed to address current housing market conditions.” (Emphasis ours.) A section of the mortgagee letter addresses the FHA rule on non-residential use and/or commercial use of condo space in | more...

September 17, 2012

FHA Makes Revisions To Condo Project Approval Process

By Joe Wallace

The Federal Housing Administration has issued revised condo approval guidelines applicable for

September 14, 2012

FHA Loan Reader Question: FHA Loan Approval

By Joe Wallace

A reader asks, “How long does it take a lender to let you know if you qualify for the FHA loan?” The answer to this question varies greatly depending on the lender. There are many factors that can play a part in the processing time for an FHA mortgage including the lender’s backlog of work waiting to be processed and other issues. But there is an FHA loan rule that states the lender does have a time limit to take action on your loan application. There is a 30 day time limit–the lender must act on your application within 30 days and inform you of that action. That’s not necessarily a mandate to have your loan approved in 30 days, and there are caveats to the 30 day rule which | more...