Articles Tagged With: FHA Energy Efficient Mortgage

September 12, 2012

Can an FHA Lender Enforce Special Requirements For Borrowers On Maternity Leave?

The FHA and HUD issue press releases about enforcement activity related to the Fair Housing Act, which addresses issues and questions such as the one in our headline, “Can an FHA Lender Enforce Special Requirements For Borrowers On Maternity Leave?” To answer that question, let’s look at a boilerplate statement found in almost every FHA/HUD release about anti-discrimination cases. “The Fair Housing Act

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 11, 2012

FHA Loan Reader Questions: Foreclosure Seasoning Periods

By Joe Wallace

A reader asks, “Apparently 2 years ago a home that we sold out-right and even received cash back had a foreclosure initiated. We are in the process of trying to buy a home at this time. Our credit report looks great score of 650 to 720. We were told we were pre-approved. the day before we were suppose to close we got a call saying we were denied because there was an embedded code the underwriter found stating that a foreclosure had been initiated.” “We were told that according to FHA guidelines, you must wait 3 years after a foreclosure. Is this true? Although it didn

August 30, 2012

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

By Joe Wallace

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 29, 2012

FHA Loan Appraisals: Can I Get A Refund?

By Joe Wallace

When a buyer looking for a home to purchase with an FHA mortgage finds a home, before the loan can be approved there must be an FHA appraisal. This appraisal will determine the FHA loan amount which is based on the fair market value of the home, not the asking price set by the seller. In situations where the appraisal comes back with a fair market value lower than the asking price of the property, some buyers struggle with a decision to walk away from the loan. In some cases it’s best to walk away, in others it may be a good idea to re-negotiate the sale price. But some borrowers still walk away from the property, not liking the terms or the price. The first question many of these | more...

August 28, 2012

FHA Loan Reader Questions: FHA Loan Processing Times

By Joe Wallace

A reader asks, “Once an offer has been made on a home. How long should it take a lender who has pre-qualified but not pre-approved a loan to close on the home?” This type of FHA loan question is best answered by the lender; it’s impossible to predict what factors could affect a home loan once the process is set in motion. The financial institution’s work load, the amount of time it takes the appraisal report to be completed and sent back and other factors all depend greatly on the housing market. It’s also important to point out that pre-qualification is not a guarantee of FHA home loan approval; if a borrower did not fully disclose information on the application form that comes to light at another time, that could | 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...

August 21, 2012

FHA Streamline Refinancing: the Net Tangible Benefit Rule

By Joe Wallace

FHA Streamline Refinancing loans have a set of requirements regarding the streamline loan’s benefit to the borrower–requirements that directly affect the borrower’s eligibility for such loans. According to the FHA loan rulebook, there must be a “net tangible benefit” to the borrower as a result of the streamline refinancing loan. The Federal Housing Administration has a specific definition of this term which must be met (with certain exceptions allowed). From HUD 4155.1 Chapter Six, Section C: “The lender must determine that there is a net tangible benefit to the borrower as a result of the streamline refinance transaction, with or without an appraisal. Net tangible benefit is defined as:

August 1, 2012

FHA Loan Prequalification: Does It Expire?

By Joe Wallace

A reader asked recently whether pre-qualification for an FHA home loan has an expiration date. The answer to that question depends greatly on the lender’s policies for pre-qualifying, but there’s a related issue that some borrowers may confuse with pre-qualification–interest rate lock-ins. Pre-qualifying is when an FHA loan applicant applies in advance for an FHA loan amount. The lender will tentatively approve an FHA loan amount based on the borrower’s application data and credit worthiness, but the real FHA home loan isn’t finalized until an offer is made, the appraisal has been accomplished and all the other usual procedures are finished. Pre-qualification is a way for the lender to know approximately how much loan he or she can afford and house hunt accordingly. The interest rate lock-in period is different | more...

July 26, 2012

FHA Refinancing Loans and Up Front Mortgage Insurance Premiums

By Joe Wallace

A reader asks, “I refinanced my home with a lender March 2011. That same lender called me a couple of months ago and said they could refinance me again at a 1/2 % less than what I am paying now at no out of pocket costs.” “They are charging me upfront mortgage insurance premiums of over $2,000.00. Do I have to pay the FHA UFMIP again, or are the trying to stick me with junk fees?” FHA loan rules on this subject are found in Chapter Seven of HUD 4155.2, Refinancing Loans. According to the FHA; “In most of the FHA mortgage insurance programs, FHA collects an