Articles Tagged With: FHA Energy Efficient Mortgage

September 18, 2013

FHA and HUD Announce Assistance for Colorado Storm Victims

The FHA and HUD have issued a press release announcing help for victims of recent storms and flooding in Colorado. According to HUDNo.13-142, foreclosure relief, FHA home loans for disaster victims, and other forms of assistance are now available to those in Adams, Boulder, Larimer and Weld Counties. The press release says, “U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to the State of Colorado and provide support to homeowners and low-income renters forced from their homes due to severe storms, flooding, landslides and mudslides.” This type of assistance generally comes after the affected area has been declared a disaster zone by the president. “Families who may have been forced from their homes need to know that help is available to begin | more...

September 18, 2013

FHA Loan Reader Questions: Old Foreclosures

By Joe Wallace

A reader asks, “Is a person eligible for an FHA loan if they had one 20 years ago that went into foreclosure?” FHA loan rules address the issue of past foreclosures on FHA home loans in HUD 4155.1, Chapter Four Section A. It states: “If the borrower has had past delinquencies or has defaulted on an FHA- insured loan, there is a three-year waiting period before he/she can regain eligibility for another FHA-insured mortgage.” Additionally, “The three-year waiting period begins when FHA pays the initial claim to the lender. This includes deed-in-lieu of foreclosure, as well as judicial and other forms of foreclosures. Lenders should contact the Homeownership Center (HOC) having jurisdiction over the area where the property subject to default is located for information such as the • date | more...

September 17, 2013

FHA Reverse Mortgage (HECM) Guidelines: Credit Issues

By Joe Wallace

Recently the FHA issued new rules and instructions to the lender that affect how FHA Reverse Mortgages or Home Equity Conversion Mortgages are processed. According to FHA Mortgagee Letter 2013-28, effective for all HECM case numbers assigned on or after January 13, 2014, the lender, “must perform a financial assessment of all prospective mortgagors on all HECM transaction types, i.e., traditional, refinance, and purchase.” What does that mean for the HECM loan applicant? For starters, when you apply for an FHA reverse mortgage or HECM, the lender is charged with doing the following things with your application data according to Mortgagee Letter 2013-28: performing the credit history analysis. performing the cash flow/residual income analysis; documenting and verifying credit, income, assets and property charges evaluating extenuating circumstances | more...

September 13, 2013

Can a VA Borrower Have More Than One FHA Loan at a Time? The Rules

By Joe Wallace

One of the more common questions we’ve been asked recently is connected to FHA loan rules about investment properties and whether or not an FHA borrower can have more than one FHA-insured home loan at a time. According to the FHA official site, “To prevent circumvention of the restrictions on FHA-insured mortgages to investors, FHA generally will not insure more than one mortgage for any borrower (transactions in which an existing FHA mortgage is paid off and another FHA mortgage is acquired are acceptable).” There are some exceptions, though. The FHA official site features a Q&A section about FHA loans that includes this quote, saying “We do not object to homebuyers using FHA mortgage insurance more than once if compatible with the homebuyer’s needs and resources” as described by FHA | more...

September 10, 2013

HUD Announces Changes To FHA Home Equity Conversion Mortgage Program

By Joe Wallace

The FHA and HUD have announced changes to the FHA Home Equity Conversion Mortgage program designed to manage risks and make the program more secure. According to a press release issued recently, the new rules will, “manage risk associated with the Federal Housing Administration’s (FHA) reverse mortgage or Home Equity Conversion Mortgage (HECM) Program. This is part of the Department’s continuing effort to reform, strengthen and protect FHA’s Mutual Mortgage Insurance (MMI) Fund” “The changes being announced today will realign the HECM program with its original intent which will aid in the restoration of the MMI fund and help ensure the continued availability of this important program,” said Federal Housing Commissioner Carol Galante. “Our goal here is to make certain our reverse mortgage program is a financially sustainable option for | more...

September 9, 2013

FHA Loans, Late Student Loan Payments, and Home Loan Approval: A Reader Question

By Joe Wallace

A reader asks, “My wife and I are trying to get a FHA loan. Me as the primary borrower and her as co-applicant. She has lates on her student loans, which have been consolidated and are current for the last 8 months. we provided the lender a letter of explanation, detailing the reason she was late…underwriter has made a decision to deny, stating the reason was/is not good enough. Is there anything we can do?” There are two important things a borrower should consider when applying for an FHA mortgage in circumstances like these. The first is that not all lenders have the same standards. The financial institution that turns you down today may have more strict requirements than the one that offers you an FHA mortgage tomorrow. It’s very | more...

September 6, 2013

FHA Loan Rules on Second Loans: A Reader Question

By Joe Wallace

A reader asks, “I am a co-borrower on another FHA loan. Do I not have the right to acquire a FHA loan where I would be the primary borrower and the secondary residence would be my primary residence? I was informed I could not have or be on two FHA loans by my tentative mortgage company.” FHA loan rules covering issues like these are found in HUD 4155.1, Chapter Four Section B. It states, “To prevent circumvention of the restrictions on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any borrower.” “FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the | more...

August 29, 2013

HUD Brings Housing Discrimination Charges Against Fifth Third Bank, Fifth Third Mortgage Company and Cranbrook Mortgage Corporation

By Joe Wallace

The FHA/HUD official site has issued a press release announcing charges against Fifth Third Bank, Fifth Third Mortgage Company and Cranbrook Mortgage Corporation. According to HUDNo.13-128, “The U.S. Department of Housing and Urban Development (HUD) announced today that it is charging Fifth Third Bank, Fifth Third Mortgage Company and Cranbrook Mortgage Corporation with discriminating against a couple with disabilities who were attempting to refinance their home mortgage. HUD’s charge alleges that the Cincinnati, Ohio-based mortgage lender and the Clinton Township, Michigan-based mortgage broker required unnecessary medical documentation in order to qualify the couple for a Federal Housing Administration (FHA) loan.” Fair Housing Act laws forbid discrimination in the home loan process or loan modification process, “based on disability, race, color, religion, national origin, sex, or family status, including imposing different application or | more...

August 27, 2013

FHA Loan Reader Questions: Spouse Credit Issues

By Joe Wallace

A reader asks, “My husband and I are looking to apply for an FHA loan. We just recently got married. He is more than qualified to apply on his own, with a good credit score and great income. I, unfortunately, have terrible credit and unresolved debts (prior to marriage). Is it possible for him to apply on his own without factoring in my debt? Our loan agent told us that I had have my credit checked and my debt would also be factored into the debt to income ratio, but not my income. Is this true?” The answer to this question is fairly simple–it depends on the laws of your state. The first thing a borrower in this situation should do is check to see if they are living in | more...

August 20, 2013

New FHA Loan Guidelines For “Back to Work”

By Joe Wallace

The FHA recently issued a mortgagee letter detailing new guidelines for lenders working with borrowers who have had financial setbacks that might not indicate their ability to make monthly mortgage payments or other financial obligations. According to FHA/HUD Mortgagee Letter 2013-26, “FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.” The letter continues, “As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively | more...