Articles Tagged With: FHA Energy Efficient Mortgage

July 20, 2012

Closing an FHA Home Loan: Settlement Requirements

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 18, 2012

FHA Loan Qualifying Factors–The Relationship of the Mortgage Payment to Gross Income

By Joe Wallace

When a borrower applies for an FHA home loan, the lender must analyze the applicant’s debt-to-income ratio in order to approve the loan application. That ratio is basically described in FHA loan rules as the amount of verifiable income versus the amount of debt the borrower has. But that’s not the only factor in the equation when the lender is trying to insure the borrower is a good risk for an FHA mortgage loan. According to the FHA official site, the lender must establish whether the borrower can afford his or her current financial obligations AND the amount of the new obligations under the FHA mortgage. According to Chapter Four of the FHA loan rules (HUD 4155.1), “The relationship of the mortgage payment to income is considered acceptable if the | more...

July 17, 2012

General FHA Refinancing Loan Rules

By Joe Wallace

There are many things borrowers ask when applying for an FHA refinancing loan for the first time. Some borrowers are interested in lowering their monthly payments, others are interested in cash-out refinancing loan options. But there are some basics every borrower should know about FHA refinancing loans, regardless of what kind of refinancing they wind up applying for. For example, FHA loan rules as written in HUD 4155.1 Chapter Three state that a borrower must be current on any loan being financed. “The borrower must be current on the loan being refinanced for the month due prior to the month in which he/she closes the refinancing, and for the month in which he/she closes.” “Example:

July 10, 2012

FHA Announces Disaster Assistance For Minnesota Storm Victims

By Joe Wallace

The FHA and HUD have announced disaster relief for victims of severe storms and flooding in parts of Minnesota. According to an FHA press release dated July 9, 2012, “Last week, President Obama issued a disaster declaration for Aitkin, Carlton, Cook, Crow Wing, Dakota, Goodhue, Kandiyohi, Lake, Meeker, Pine, Rice, Saint Louis, and Sibley Counties. The declaration also includes Fond du Lac, Grand Portage and Mille Lacs Indian Reservations. The President

June 26, 2012

FHA Loan Rules For 203(K) Rehab Mortgages

By Joe Wallace

The FHA describes its 203(K) Rehab loan as, “the Department’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities.” “Since these are the primary goals of HUD, the Department believes that Section 203(k) is an important program and we intend to continue to strongly support the program and the lenders that participate in it.” But what are the rules for an FHA 203(k)? There are some restrictions on the type of property that can be rehabbed under this program, as well as requirements for the condition of eligible properties. For example, “To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one | more...

June 25, 2012

FHA Home Loans and “Qualifying Ratios”

By Joe Wallace

One frequently asked question about FHA home loans goes something like this: “Why do different banks seem to have different standards for FHA home loans?” It’s a legitimate question–some lenders require different credit scores than others, some are stricter about certain types of credit issues or require longer wait times after bankruptcy or foreclosure. Why? The FHA loan rulebook for lenders, HUD 4155.1, has a section in Chapter Four called “Qualifying Ratios” which can help borrowers understand why some of these variances may occur. Every bank has its own set of standards, based on the need to effectively manage risks in lending while allowing credit access to the largest number of qualified borrowers the company can support. What do the FHA rules require a lender to take into consideration when | more...

June 20, 2012

FHA Loan Reader Question: Unpaid Debts and FHA Loan Applications

By Joe Wallace

A reader asks, “Can a I obtain an FHA loan with an unpaid charge-off reported on my credit report for over $10,000? I tried to pay/settle the debt, but the bank refuses to accept any payment because the account is in transition. The statute of limits has expired for the the bank to pursue debt collection; however, it has not been seven years for the account to be completely removed from my credit. I

June 15, 2012

Important New HUD Rules For LGBT Home Buyers Seeking FHA Home Loans

By Joe Wallace

There are federal laws in place to prevent housing discrimination on the basis of race, color, creed, national origin, religion, and any number of other factors which have nothing to do with a borrower’s financial qualifications for credit. The Fair Housing Act is one such law, but many other rules apply. No matter if a borrower is applying for a conventional home loan, a VA guaranteed mortgage or an FHA mortgage loan, lenders, brokers, agents, landlords and other parties cannot discriminate in any aspect of the housing process. That said, one important set of protections has been, until recently, missing from the rulebooks for those in need of FHA/HUD services and programs. But in recent times, the Department of Housing and Urban Development has finalized a new set of rules | more...

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 30, 2012

FHA Loans: How Can I Estimate My Monthly Mortgage Payment?

By Joe Wallace

One commonly asked question about FHA home loans involves the process of determining how much a borrower could pay on a monthly basis on the FHA guaranteed loan. For this purpose, the FHA official site refers potential borrowers to a loan calculator provided by GinnieMae.gov, which is designed to help borrowers get a general idea of what the costs might be per month based on user-provided details including the sale price of the home, the housing market that home is in, etc. Specifically, the loan calculator asks for the sale price of the property, the state and county where that property is, the term of the loan plus interest rate, and the amount of down payment. Once these fields are filled in, the GinnieMae.gov calculator returns the results with plenty | more...