Articles Tagged With: FHA Home Loan

January 27, 2022

FHA Home Loan Approval Problems: New Credit Applications

You may have heard advice about seeking new credit while you are in the home loan process. Much of this advice is definitely applicable. Anyone who advises you NOT to apply for new credit once you have started your home loan journey is thinking with your best interests in mind, but what is it about this advice that makes it so critical? A lender doesn’t pull your credit reports just once during the home loan process and if your lender sees new information that potentially changes your ability to qualify for the mortgage it may be necessary to re-approve you for the loan. And that’s just the presence of new credit in your report. What about how a new line of credit potentially affects your debt-to-income ratio? When you apply | more...

January 26, 2022

FHA and HUD Expand REO Sales Options For Owner-Occupiers

By Joe Wallace

They are sometimes known as HUD homes, more formally as HUD real-estate owned homes–properties that were purchased with FHA mortgages that later fell into loan default and ultimately foreclosure. The FHA and HUD, in such cases, have a reimbursement program for the lender but the property itself reverts back to HUD upon foreclosure. The HUD official site states, “A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.” And now, thanks to a move by the FHA and HUD, there are expanded opportunities for borrowers who want to be owner-occupiers to bid on and purchase these HUD homes before | more...

January 25, 2022

FHA Loans: Do Appraisals Transfer When Switching Lenders?

By Bruce Reichstein

Sometimes a home loan goes smoothly from start to finish. Other times, it may not. In some cases, a borrower may choose not to purchase a particular home after all and continue looking. In others, a borrower may be happy with the home, but not so pleased with the lender. In situations where a borrower wants to switch lenders, is it possible to transfer an FHA appraisal to the new lender? This is a not-so-common question, but an important one for those who need to know. What does HUD 4000.1 have to say about appraisal transfers? Quite a bit, it turns out. From HUD 4000.1: “In cases where a Borrower has switched Mortgagees, the first Mortgagee must, at the Borrowers request, transfer the appraisal to the second Mortgagee within five | more...

January 21, 2022

HUD Announces Disaster Relief For Alaska, Missouri, And Tennessee

By Joe Wallace

The U.S. Department of Housing and Urban Development has announced federal disaster assistance to three states affected by natural disasters in 2021 and in 2022. Certain counties in Tennessee, Alaska, and Missouri are now eligible for federal disaster relief, FHA foreclosure moratoriums, and more. Tennessee was affected by severe storms, high winds, and tornadoes from December 10 to December 11, 2021; in January of 2022 the President issued a major disaster declaration for the following Tennessee counties: Cheatham Davidson Dickson Gibson Henderson Henry Lake Obion Stewart Sumner Weakley Wilson The President also announced a major disaster declaration for portions of Alaska affected by severe storms, high winds, floods, landslides, and mudslides from October 29 to November 1, 2021. In January 2022 the President declared the Kenai Peninsula Borough a major | more...

January 20, 2022

Using Military Pay To Qualify For An FHA Mortgage

By Joe Wallace

Some house hunters have questions about the ability to be approved for an FHA mortgage using military benefits as qualifying income. What will a participating FHA lender consider and what will they reject? Much depends on the nature of the benefit and whether it is likely to continue. Why would currently serving military members or military veterans consider an FHA loan instead of using their zero-down VA home loan benefit? There are several reasons why the FHA loan might be a choice these buyers make–some might want to save their VA loan for a bigger home, or they may have already used their VA loan entitlement in an earlier purchase. To qualify for any home loan you need verifiable income. Military income is not a lump sum payment for services | more...

January 19, 2022

Is A Second FHA Loan Possible?

By Joe Wallace

Is it possible for borrowers to apply for second FHA loans, resulting in paying on two mortgages at once? Here is a variation on a common reader question about this issue: “I relocated to another state over 400 miles away. Will I be able to get an FHA loan even though I still own my first home?” There’s no one single answer to a question like this. Aside from FHA loan rules, a borrower’s credit rating, loan repayment history, and debt-to-income ratio may all play a part in whether a lender is able to approve or deny an FHA loan. In cases like these, one of the most important factors would be (all other considerations aside) focused on the borrower’s debt-to-income ratio. With an existing mortgage payment, will the borrower | more...

January 18, 2022

Home Loan Myths: 20 Percent Down Payments

By Bruce Reichstein

Why do people still believe you MUST make a 20% downpayment on a home loan? Like other persistent home loan myths (including the one that holds that FHA mortgages are ONLY for first-time homebuyers), the 20% issue has been passed along to unsuspecting first-time home buyers for decades. What is the reality? FHA mortgages require 3.5% down at a minimum. That’s for borrowers who financially qualify with FHA and lender credit score requirements. FHA loan rules in HUD 4000.1, the FHA Single-Family Lender’s Handbook, says that 580 or better is the FHA standard. You will need to ask the lender you choose whether there are higher FICO score requirements with that financial institution. (There often are.) With conventional mortgages, 20% down is typically required for borrowers who want to avoid | more...

January 10, 2022

Buying Your Very First Home With An FHA Mortgage

By Joe Wallace

If you are buying your first home, published reports say you aren’t alone. In December of 2021, a Marketwatch article noted that in 2021, the number of first-time homebuyers increased from 31% to 34%. That information comes via the National Association of Realtors, which also notes that historically, some 40% of buyers have traditionally been first-timers. Do you need a first home or starter home? Those who buy with FHA mortgages are in a good position to buy thanks to lower down payment requirements–only 3.5% for those who financially qualify. Lower down payments can help in ways some don’t expect–such as having more money to pay closing costs and other expenses related to buying a home. Down payment assistance programs in your local area may be able to offset the | more...

December 31, 2021

Things To Consider: FHA Loans In 2022

By Joe Wallace

What do you need to know about home loans in 2022? There are a few things to keep in mind that may affect your planning and choices about a new mortgage or refi loan. Here are some issues to think about going into the new year: FHA Loan Limits Are Higher In 2022 FHA loan limits go up in most markets, but there are some areas where the limits may not necessarily change. Keep in mind that there are high-cost markets AND low-cost housing markets. \Depending on where you are house hunting the limits may be different than what you are used to–it’s a great idea to check the limits ahead of time to get an idea of what to expect. Interest Rates May Rise In 2022 With the Fed | more...

December 29, 2021

HUD Announces Settlement In California Fair Housing Case

By Joe Wallace

The FHA and HUD have announced a voluntary settlement agreement in a Fair Housing Act complaint in California. A press release on the HUD official site announces a Conciliation/Voluntary Compliance Agreement with National Community Renaissance, National Community Renaissance of California, Desert Meadows Housing Partners, Victorville Housing Partners, and Cathedral Family Housing Partners, management agents, and owners of four HUD-subsidized apartment complexes in Southern California. The agreement is meant to close the book on complaints that the property managers “refused to rent to or provide adequate language services for applicants with limited English proficiency (LEP)” according to the HUD official site. The Fair Housing Act makes it illegal for housing providers to discriminate because of national origin at any stage in the housing process. Furthermore, the Civil Rights Act contains additional | more...