Articles Tagged With: FHA Condo Loan

August 30, 2012

FHA Loan Reader Questions: How Long To Close The Home Loan?

A reader asks, “Once an offer has been made on a home, how long should it take a lender who has prequalified but not preapproved a loan to close on the home?” There are many variables at work with an FHA home loan, so there is no set time period. Many lenders may use a stock answer of between 30 and 45 days, but you should not expect an FHA loan to close within a week to ten days of the mortgage application. It is very important to point out that pre-qualifying for an FHA loan is not the same as having the lender process the loan application data, verify income and employment, and pull your credit reports. That process definitely takes time, which is why the 30-45 day window | more...

August 24, 2012

FHA Loans For Disaster Victims: The 203(h) Program

By Joe Wallace

With all the natural disasters in the news lately, plus areas with federal natural disaster declarations in Wisconsin, Maryland, and Montana counties, it seemed like a good time to discuss the FHA 203(h) loan program for disaster victims. The FHA/HUD official site summarizes the FHA 203(h) program as follows; “The Section 203(h) program allows the Federal Housing Administration (FHA) to insure mortgages made by qualified lenders to victims of a major disaster who have lost their homes and are in the process of rebuilding or buying another home.” Not everyone can apply for this particular FHA home loan program. According to FHA.gov, “Individuals are eligible for this program if their homes are located in an area that was designated by the President as a disaster area and if their homes | more...

July 31, 2012

FHA Loan Rules: Owner Occupancy

By Joe Wallace

A reader asks, “When applying for an FHA loan, how long must I live on the property?” Assuming the reader wants to know how long he or she must own the home before it can be sold, borrowers with this question should know there FHA loan rules that do apply to occupancy and how long a seller has owned the property. For example, HUD 4155.1 Chapter Four Section B contains the FHA Requirement for Establishing Owner Occupancy, which states: “At least one borrower must occupy the property and sign the security instrument and the mortgage note in order for the property to be considered owner-occupied. FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower

July 20, 2012

Closing an FHA Home Loan: Settlement Requirements

By Joe Wallace

FHA loan rules include a list of items–settlement requirements–needed to properly close the FHA mortgage loan. HUD 4155.1, Mortgage Credit Analysis for Mortgage Insurance, lists these requirements. They begin with the “Lender Responsibility for Estimating Settlement Requirements”. According to HUD 4155.1 Chapter Five Section A, “For each transaction, the lender must provide the initial Good Faith Estimate (GFE), all revised Good Faith Estimates and a final HUD-1 Settlement Statement, consistent with the Real Estate Settlement Procedures Act (RESPA), to determine the cash required to close the mortgage transaction.” FHA loan rules say that in addition to the down payment required for FHA home loans (3.5% at a minimum), other borrower expenses are to be included in the amount due at settlement time. “Such additional expenses include, but are not limited | more...

July 9, 2012

FHA Loan Reader Question: Condo Approval

By Joe Wallace

A reader asks, “I own one of the eight units in a condominium building. Where can I find the procedures to qualify the building for FHA approval ? Several of the owners want to sell their units and having FHA financing available for the potential buyers would be a great help.” In 2009, FHA loan rules for condo approval were changed. According to FHA Mortgagee Letter 2009-19, the the Housing and Economic Recovery Act (HERA) of 2008 fave the FHA the ability to modify approval procedures for condo projects: “FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD

May 7, 2012

Questions and Answers on FHA Condo Loans

By Joe Wallace

FHA home loans include loans for condos, but since condominiums have unique arrangements that can be much different than a traditional suburban home, there are additional rules that govern FHA condo loans. Here’s a list of commonly asked questions about FHA condo loans, and the answers to those questions. Is FHA condo project approval required for an FHA condo loan? Yes.

April 11, 2012

FHA Loan Questions: Mortgage Insurance Payments

By Joe Wallace

A reader asks, “I am refinancing my home with FHA. I am financing $54,540.00 and the appraisal (by FHA) is $180,000.00. Since I have almost $125,000.00 in equity why are they making me purchase FHA mortgage insurance at $50.00 a month? How long will I have to pay this on a 30 year loan at 4.25%?” Mortgage insurance, also known as MIP, is required by the FHA because it protects the government and the lender against a loss should the borrower default on his or her FHA loan. FHA requirements include mortgage insurance for borrowers making a down payment of less than 20 percent. Mortgage insurance is also required on refinance loans and is included in various rules governing FHA refinancing loans such as the following: “The lender must determine | more...

April 9, 2012

FHA Loan Questions: FHA Condo Approval

By Joe Wallace

A reader asks, “I own a unit in a condo building. I would like to buy another unit in the building, but I have been told by the board I cannot due to the FHA rule that not more than ten percent of the units in the building can be rented out.” “Of course if I bought the unit, I would then rent it out. Otherwise, the building could loss FHA financing.

April 2, 2012

FHA Loan Questions: Mortgage Insurance Premiums

By Joe Wallace

A reader asks, “I thought that it was announced recently that FHA insurance premiums were being decreased not increased?” Effective June 11, 2012, FHA Up Front Mortgage Insurance Premiums (UFMIP) will decrease for certain types of FHA Streamline Refinance Loans. According to the FHA Mortgagee Letter 12-4, “For all SF Forward Streamline Refinance transactions that are

March 30, 2012

FHA Loans and Credit Reports

By Joe Wallace

One frequently asked question about FHA home loans involves the credit check. Many borrowers want to know what credit score the lender is looking for, (many lenders require a minimum score of 620) but many more also want to know what kind of credit reporting data the loan officer needs to approve or deny an FHA home loan application. There are many areas the lender must review as part of the FHA loan application. A typical credit check includes a review of all credit inquiries over the last three months–one reason why many lending experts recommend not applying for new credit cards or other lines of credit before or during a home loan application. The lender must also review credit information from the last seven years of the applicant’s credit | more...