Articles Tagged With: Graduated Payment Mortgages

October 2, 2013

Bad Credit FHA Loans? A Reader Question

We get a lot of questions about FHA loans and bad credit. One of the latest examples comes from a reader who asks; “I am wanting to buy me a single family home but my credit is messed up. I know my score is bad! I am a single mother with 4 kids and I want my own house. I am in need of help on which way to go. Do I need to file chapter 13 or 7 or is there a way to get my credit fixed so that I can make another one of my dreams come true? Help me please.” While we cannot advise or answer questions on issues that fall outside how FHA loans work and their related issues (appraisals, Private Mortgage Insurance, etc.) | more...

May 30, 2013

FHA Loan Reader Questions: Credit Scores

By Joe Wallace

A reader asks, “My credit score is in the ‘poor’ range (low score 475. Hi score 585) and I will need assistance with down payment. However, I have an excellent income and have been on the job over 15 yrs. I have recently been approved for an auto loan which I am using to I prove my credit scores. Might I qualify for FHA, and what assistance is available for the down?” The FHA has rules about minimum credit scores needed for FHA loan approval. According to the FHA official site: “When a credit score is available, it must be used to determine eligibility for FHA insured financing. The score that is used to determine eligibility is called the ‘decision credit score’. When the credit report reflects: • 3 credit | more...

May 13, 2013

FHA Energy Efficient Mortgage Rules For Streamline Refinance Loans

By Joe Wallace

The FHA Energy-Efficient Mortgage (EEM) option is available for borrowers who want to apply for additional money to be used for energy-efficient upgrades on the home being purchased or refinanced with an FHA mortgage. An FHA EEM is subject to certain rules and requirements, especially when paired with a Streamline Refinance. For example, one of the requirements of a Streamline Loan is that the borrower must get a benefit from the refinance–usually in the form of lower interest or monthly payments. But with some FHA EEMs, the payments may actually go up. Is this permitted under the rules? HUD 4155.1 spells out when those higher payments may be allowed–the guidence is found in Chapter Six, Section D. Under “Streamline Refinance Transactions with EEM” where you’ll find the following: “For a | more...

January 17, 2013

Paying The Up Front Costs Of Your FHA Loan

By Joe Wallace

The FHA loan program is designed to help borrowers get into an affordable home. However, those new to the FHA loan program might not realize there are up front expenses which must be budgeted for; unlike the VA loan program administered by the Department of Veterans Affairs, the FHA loan program does not feature a “no down payment” option. FHA home loans have a required down payment the FHA regulations describe as a “minimum investment”. FHA loan rules as found in HUD 4155.1 describe the up-front costs of an FHA loan (including the down payment) as follows: “Under most FHA programs, the borrower is required to make a minimum downpayment into the transaction of at least 3.5% of the lesser of the appraised value of the property or the sales | more...

November 8, 2012

FHA Relief For Rhode Island Storm Victims

By Joe Wallace

An FHA press release announces help for Rhode Island storm victims in the wake of Hurricane Sandy. According to the FHA/HUD press release HUDNo.12-169; “U.S. Housing and Urban Development Secretary Shaun Donovan…announced HUD will speed federal disaster assistance to the State of Rhode Island and provide support to homeowners and low-income renters forced from their homes due to Hurricane Sandy.” The help comes after a presidential declaration of a federal disaster area in Bristol, Newport and Washington Counties. “The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in these counties” according to the press release. “Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said Donovan. “Whether it’s foreclosure relief for | 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 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 17, 2012

FHA Loans and Employment Verification

By Joe Wallace

When you apply for an FHA mortgage loan, you’re required to list your employment history so it can be verified before loan approval. For borrowers who have had steady jobs with the same employer for two years or more, this isn’t a great cause for concern. Borrowers who have changed jobs more frequently than that may be worried that their job history might work against them on the FHA loan application. Is this fear grounded in reality? Or does the FHA make provisions for borrowers with recent job changes, a history of seasonal employment or other issues? According to the FHA loan rules found in HUD 4155.1, these issues are circumstantial and must be reviewed on a case-by-case basis to avoid discriminating against legitimate, qualified FHA borrowers who happen to | 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

February 17, 2012

FHA Loan Reader Question: Bankruptcy and Job Loss

By Joe Wallace

A reader recently sent us a lengthy comment as part of a request for assistance on FHA loan topics. He writes, “I had a foreclosure in a bk chap 7 that was discharged in Nov 2009. This was due to a job lost in 2008 like most of the country. I had to get unemployment for I went over one year looking for another job. I went back to work full time in Dec 2009…” We won’t reproduce the entire correspondence here, but we thought it important to address the issues mentioned above as there are plenty of other readers who may be facing similar circumstances. Is it possible to get a new FHA home loan with conditions like the ones previously mentioned as part of the borrower’s history? Let’s | more...