Articles Tagged With: FHA Counseling

September 28, 2012

Foreclosure Avoidance Counsleing on FHA Home Loans: Should I Pay For Assistance?

Aside from getting the FHA home loan itself, one of the most important benefits to having an FHA mortgage is the availability of free foreclosure avoidance counseling for home owners who need it. FHA.gov reminds borrowers that it is not necessary to pay fees to third-party foreclosure avoidance agencies. Plenty of free counseling and assistance is available from the FHA and HUD. On the FHA official site, under the page titled “Consumer Fees For Housing Counseling” you’ll find the following: “Foreclosure prevention counseling and homeless counseling services are available free of charge through HUD’s Housing Counseling Program. Housing Counseling agencies participating in HUD’s Housing Counseling Program are not permitted to charge consumers for these specific housing counseling services. (Emphasis ours.) Counseling recipients should not pay for these services.” That’s not | more...

September 13, 2012

FHA Loan Reader Questions: Credit Scores

By Joe Wallace

A reader asks, “I don’t have an FHA loan and can’t get a loan. I’m on a fixed income and need HUD assistance due to hurricane Issac damage. Who can I get assistance from? My credit is poor but I can pay mortgage. I am a single parent and don’t know where to turn. We need a home desperately! The one we are in now is not healthy and

September 11, 2012

FHA Loan Minimum FICO Score: A Reader Question

By Joe Wallace

A reader asks, “What is the lowest starting credit score?” This is a difficult question for some borrowers because the answer isn’t as straightforward as quoting the FHA loan rules. Individual lenders don’t have to require a standard identical to the minimum–they are free to require higher scores. For example, in a 2010 press release titled, “FHA Announces Policy Changes to Address Risk and Strengthen Finances ” the FHA and HUD announced a change for minimum FICO scores required in order to be approved for an FHA guaranteed home loan. The press release stated FHA and HUD planned to: “Update the combination of FICO scores and down payments for new borrowers. New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% | more...

September 5, 2012

FHA Loans and Homeowner’s Association Policies

By Joe Wallace

A recent press release issued by the FHA/HUD announced charges against a Florida homeowner’s association for policies the press release claims are in violation of the Fair Housing Act. According to HUDNo.12-145, “The U.S. Department of Housing and Urban Development (HUD) announced…that it is charging a Gibsonton, FL, homeowners association and its Tampa-based former management company with violating the Fair Housing Act by subjecting a family to different rental terms and conditions because they have six children.” The charges allege, according to the press release, “that Townhomes of Kings LakeHomeowners Association (HOA), Inc., and Vanguard Management Group, Inc., violated the Fair Housing Act by telling the family that they had too many people living in their rental townhouse and threatening to evict them if they didn’t reduce the number of | more...

August 22, 2012

What Does My Lender Need To Process My FHA Loan Application?

By Joe Wallace

FHA loan rules specify a list of required documents and paperwork needed to process an FHA home loan properly. In addition to your application data, the lender needs a list of things in order to perform the “mortgage credit analysis”. Not all of these documents are supplied by the applicant, but some of the lender-generated paperwork requires the borrower’s permission in writing, such as the approval to pull credit reports from the three major credit reporting agencies Equifax, TransUnion, and Experian. The list of required documentation also includes “evidence of a Social Security number” which is usually your Social Security card or other documents the lender may accept as proof of your number. The lender must complete a verification of employment, which means following up on the data you provided | 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 13, 2012

HUD Charges Minnesota Condo Association and Management Company With Fair Housing Act Violations

By Joe Wallace

In spite of federal laws, conventional, VA, and FHA loan applicants sometimes experience discrimination when house hunting. While the most obvious types of discrimination involve bias against race, religion, sexual orientation, or national origin, there’s another type of discrimination that’s just as illegal and unfair–discrimination based on family status. According to a press release issued by the Department of Housing and Urban Development, a Minnesota condominium association and its management company, Gassen Company, Inc., have been charged by HUD with violating the Fair Housing Act, “by discriminating against families with children under the age of 18”. The press release says, “According to HUD

July 4, 2012

FHA Appraisal Expiration Dates: Questions and Answers

By Joe Wallace

When buying a home with an FHA guaranteed mortgage loan, one of the most important steps in the process is the appraisal. An FHA appraiser reviews the home to make sure it lives up to minimum property requirements and assigns a fair market value to the property. There are many common questions about FHA appraisals; here are some of them along with the answers. How Long Is An FHA Appraisal Valid? Buyers who purchased property prior to January 1, 2010 may have experienced a different set of standards, but currently, FHA appraisals are considered valid for 120 days. After that time they expire. According to FHA.gov, “Effective for all case numbers assigned on or after January 1, 2010 the validity period for all appraisals on existing, proposed, and under construction | more...

June 26, 2012

FHA Loan Reader Question: Non-Occupying Co-Borrowers

By Joe Wallace

A reader asks, “Hello, I am interested in getting an FHA 203K mortgage to buy a fixer-upper and add repair costs on top of the loan amount. In the conditions of the FHA 203K plan, there is a stipulation that requires the homeowner to occupy the house. Must all of the people listed on the mortgage/loan live in the home? Can just one person listed live there without violating the terms?” FHA loans do make provisions for non-occupying co-borrowers. However, there are limits which apply to these transactions that can affect the amount of the FHA home loan. In most cases an FHA loan with a non-occupying co-borrower has a limit–for qualified borrowers the loan would be approved for 75% of the loan-to-value ratio, rather than the maximum loan amount. | 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...