Articles Tagged With: FHA Energy Efficient Mortgage

December 13, 2011

FHA Loans, Military Applicants, and Occupancy Rules

There are many reasons why a military member could choose to apply for an FHA insured home loan instead of applying for a VA mortgage. Those reasons may include occupancy issues, personal choice when considering FHA loan fee structures versus VA insured mortgage fees, etc. The decision to purchase a home with an FHA mortgage instead of a VA loan could be influenced in part by language in the HUD document 4155.1, Mortgage Credit Analysis for Mortgage Insurance, which addresses occupancy issues. According to the VA official site Frequently Asked Questions list, occupancy rules for a VA Home Loan include a requirement that the veteran or spouse occupy the property bought with a VA insured loan as the primary residence: “Q: I am a single veteran stationed overseas and want | more...

December 13, 2011

FHA and HUD Information In Spanish

By Joe Wallace

The FHA and HUD offer a wide range of information, advice, and news about FHA insured home loan programs. Part of that information includes FHA/HUD resources in Spanish. Did you know there’s an entire Spanish-language site dedicated to the same information provided in English? The Spanish language version of these pages is available at http://espanol.hud.gov/home.html and features information about buying vs. renting, home economics, FHA loan advice and other valuable resources. For those who have already purchased homes with an FHA mortgage, there are resources including topics on FHA/HUD refunds and “refund tracers,” refinancing options, foreclosure avoidance and other important details. When it comes to foreclosure avoidance advice, borrowers in trouble on their FHA loans in need of Spanish-language resources should see the page titled, “Gu

December 9, 2011

FHA Home Loan Resources By State

By Joe Wallace

Did you know that the FHA and HUD offer by-state listings of FHA-related news, programs, home loan resources and other information? While FHA home loans are available nationwide, there are many state and local programs designed to help home owners, FHA borrowers, veterans and others affected by such programs. For example, on the Alabama page at http://portal.hud.gov/hudportal/HUD?src=/states/alabama there is a press release detailing a Department of Housing and Urban Development grant to the State of Alabama to the tune of $120 thousand to fight housing discrimination and uphold fair housing initiatives. On the North Dakota page there are stories of the latest initiatives on the state and local level to assist low-income families. These state page on the FHA official site also contain valuable links to information for foreclosure avoidance, | more...

December 7, 2011

Can an Energy Efficient Mortgage Loan Be Used With an FHA 203(k) Loan?

By Joe Wallace

The most common FHA insured home loan is called the FHA 203(b). This is the loan most people considering a first time home purchase will apply for when they look into the FHA loan program. Another type of FHA loan is the 203(k), which according to the FHA official site, “enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage

December 5, 2011

FHA Loans and the Debt To Income Ratio

By Joe Wallace

The debt to income calculation is a very important part of a borrower’s FHA loan application review. The lender must analyze the amount of verified income and compare it to the amount of debt the borrower has to see whether the borrower can afford his or her current monthly obligations and the projected monthly FHA mortgage loan payment. To do this, the lender takes income (only income which can be verified as stable and reliable) and compares it to all current debt and calculates what percentage the debt takes of the verified income. How is this done? The lender adds up the total mortgage payment, which includes principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners’ dues, and any other payments that are considered part of | more...

November 25, 2011

HUD Rules Proposed To Refine Fair Housing Laws

By Joe Wallace

Those applying for FHA home loans for the first time soon learn about the wide range of federal laws enacted to insure fair treatment in the lending and housing markets. But according to Department of Housing and Urban Development Secretary Shaun Donovan, those laws need to be modified to be more inclusive. In Donovan’s official HUD blog, he writes, “…I

November 22, 2011

FHA Loans, Escrow Accounts, and the Real Estate Settlement Procedures Act

By Joe Wallace

If you’re new to the home buying process, chances are good you’re learning plenty of new things about banking, the loan process, and escrow accounts. An escrow account is often required by lenders as part of an FHA home loan in order to pay property taxes, home insurance and other required expenses. But what are the rules governing escrow and what should the borrower know? To begin, the Real Estate Settlement Procedures Act or RESPA states that escrow is NOT mandatory as a condition of applying for an FHA home loan. That said, the lender is free to require an escrow account–but the FHA does not insist upon one. When a lender does require money to be held in escrow, the financial institution is limited by RESPA–there’s a maximum calculation | more...

November 18, 2011

FHA Home Loans: Is There a Minimum Square Footage Requirement?

By Joe Wallace

Some of the most frequently asked questions about FHA home loans involve the FHA’s minimum property requirements–the standards homes must be built or modified to in order to meet FHA approval. FHA minimum property requirements address basic issues such as safety–the property can’t be located near a high voltage easement, for example. But FHA minimum property requirements also address habitability concerns. All mechanical systems on the property must be in working order and be at the proper capacity to serve the home they are installed in. The FHA rules do not permit heating or central air conditioning systems that are too small to properly heat or cool the home, and electrical systems must be powerful enough to serve the entire building adequately. Areas of standing water in the basement are | more...

November 16, 2011

FHA Financial Report: 440,000 Families Helped Through FHA Refinancing Loans

By Joe Wallace

In a troubled economy, it’s easy to see why an FHA refinancing loan would be widely used–who doesn’t want to lower their monthly mortgage payments? Even in the best of times, a lower monthly commitment is attractive; when money is tight refinancing is on the minds of homeowners across the U.S. On Tuesday, November 15, 2011, the FHA and HUD released a financial report to Congress which included some figures that might surprise you. In 2011, the FHA “Served more than 1.2 million households and insured $218 billion in single-family mortgages, bringing the active single family portfolio to more than $1 trillion” according to an FHA press release. The press release, HUD No. 11-270, also noted that the FHA “…enabled more than 585,000 families to become homeowners for the first | more...

November 3, 2011

FHA Loans and Foreclosure Avoidance: Some Basics

By Joe Wallace

There have been several reader questions lately about the foreclosure process on FHA home loans. What options do FHA borrowers have when facing the risk of default and/or foreclosure on their FHA mortgages? A quick look at the FHA official site’s page on the subject of foreclosure avoidance at http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure reveals several options. One program known as HAMP is the Home Affordable Modification Program, which “lowers your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income to make your payments more affordable.” According to the FHA, a typical FHA loan modification under HAMP “results in a 40 percent drop in a monthly mortgage payment. Eighteen percent of HAMP homeowners reduce their payments by $1,000 or more.” Another program borrowers may consider is the Principal Reduction Alternative, | more...