Articles Tagged With: FHA Home Loan

March 8, 2018

What Goes Into Your FHA Mortgage Payment?

What goes into your FHA mortgage payment? It’s easy to assume that you’re paying principal and interest, divided by the number of months you are obligated to on the mortgage note. But is that really all that goes into your monthly mortgage bill? The short answer is no, there’s more to it than that. FHA Loan Rules For Debt-To-Income Ratios HUD 4000.1, the FHA single family home loan handbook, has instructions for the lender to help determine a borrower’s credit-worthiness. The lender doesn’t just calculate the amount of your income versus how much debt you have going out on a monthly basis-that debt ratio has to be calculated with and without the mortgage payment to see what percentage of your monthly income is taken up by debt. The formula is | more...

Coronavirus And Home Loan Appraisals: What You Need To Know Now

March 7, 2018

Help For Spanish-Speaking HomeOwners In Federal Disaster Areas

By Joe Wallace

Homeowners in federally-declared disaster areas are still working to recover homes, property, and personal lives after the hurricanes, mudslides, fires, and other natural disasters in recent times. Efforts by the federal government including the FHA and FEMA are ongoing. Home owners-including FHA borrowers-have a range of options open to them including FHA loan foreclosure avoidance, loan forbearance, even the addition of a partial claim procedure to help FHA borrowers avoid payment shock as they resume pre-disaster FHA home loan payments. Some of these programs are well-known in the disaster areas they serve. But what might not be so well known? The fact that information about these programs is available in Spanish. The FHA/HUD official site includes information in Spanish about disaster relief options. The publication, “Información Importante Sobre Recuperación Ante | more...

March 2, 2018

FHA Foreclosure Relief For 2017 Disaster Victims

By Bruce Reichstein

In late February 2018, the FHA announced additional foreclosure relief measures for victims in federally declared disaster areas in 2017. According to the FHA official site, the new measures are intended to be an expanded version of “mortgage relief to FHA-insured homeowners who live or work in areas impacted by Hurricanes Harvey, Irma and Maria as well as California wildfires and subsequent flooding and mudslides.” The FHA has ordered participating FHA lenders to offer “additional options to eligible disaster victims in Texas, Louisiana, Georgia, Florida, South Carolina, California, Puerto Rico and the U.S. Virgin Islands, allowing them to remain in their homes while reducing losses that would otherwise negatively impact FHA’s Mutual Mortgage Insurance Fund” according to the press release. At the heart of these new measures is something called | more...

Rent Or Buy? Arguments For Purchasing A Home With An FHA Mortgage

February 27, 2018

FHA Home Loan Down Payment Rules You Should Know

By Joe Wallace

FHA home loan down payment rules you should know include the minimum amount down, acceptable sources of down payment funds, and how other closing costs and associated expenses related to your down payment requirements. Do you know how your chosen FHA lender will calculate your down payment? Knowing before you apply can help plan and save for this and other required closing costs. FHA Loan Down Payments: A Minimum Required Investment FHA loan rules in HUD 4000.1 refer to the down payment as a minimum required investment (also referred to as an MRI for short), not to be confused with the borrower’s Total Required Investment, described in HUD 4000.1 as: “Total Required Investment refers to the amount the Borrower must contribute to the transaction including the Borrower’s downpayment and the | more...

February 19, 2018

Happy Presidents’ Day 2018

By Bruce Reichstein

Happy Presidents’ Day 2018! Today banks and markets are closed, and we pause from our usual schedule of writing posts and answering questions about FHA home loans to observe the holiday. We return with our regular content schedule tomorrow. Thank you very much for reading!

February 12, 2018

Who Can Apply For FHA Reverse Mortgages?

By Joe Wallace

Who can apply for an FHA reverse mortgage? Borrowing money to take advantage of the value in the home is not a new concept, but the reverse mortgage is a type of loan that’s quite different than a standard FHA refi loan. What Is The FHA Reverse Mortgage? A reverse mortgage is a loan that obligates the borrower without requiring monthly mortgage payments. FHA reverse mortgages, also known as Home Equity Conversion Mortgages or HECMs for short, offer the borrower cash or a line of credit in an amount agreed upon between the borrower and lender. That amount is determined in part by the value of the home, so FHA HECM loans will require a new appraisal to see what the current fair market value of the property might be. | more...

What Credit Score Is Needed For An FHA Mortgage?

February 9, 2018

Can I Request An Appraisal Update For An FHA Mortgage?

By Bruce Reichstein

Can I request an appraisal update for an FHA loan? The FHA appraisal expiration issue is one that won’t affect all borrowers, but when it does become an issue, it’s good to know what the FHA loan rules are; in general FHA appraisals have a 120 day validity window, with an option for a 30-day extension. The 30-day extension is, as we discussed in a previous blog post, addressed in the FHA loan handbook as follows: “The 120 Day validity period for an appraisal (see Ordering Appraisals) may be extended for 30 Days at the option of the Mortgagee if (1) the Mortgagee approved the Borrower or HUD issued the Firm Commitment before the expiration of the original appraisal; or (2) the Borrower signed a valid sales contract prior to | more...

February 6, 2018

Why Are FHA Loan Rules Different For Family-Owned Business Employees?

By Joe Wallace

Why are FHA loan rules different for family-owned business employees? Some borrowers fit this category-that where you work for the family business but have no ownership in it-and the rules are important to understand. The FHA definition of income derived from a family owned business is specifically, “Family-Owned Business Income refers to Employment Income earned from a business owned by the Borrower’s family, but in which the Borrower is not an owner.” The major difference in the FHA loan rules for small business owners versus those they employ (but who do not own a stake in the business) basically recognizes the difference between being an employee and an owner. The rules for self-employed FHA home loan applicants differ from employees. Self-employed borrowers are required to show that their employment is | more...

February 6, 2018

HUD Announces Aid Package For Puerto Rico

By Bruce Reichstein

The Department of Housing and Urban Development has announced a billion dollar relief package for Puerto Rico. According to a press release on the HUD official site, the agency “awarded more than $1.5 billion to help Puerto Rico to recover from Hurricanes Irma and Maria.” The funds are available via $7.4 billion in CDBG-DR (see below) funding for major disasters declared in calendar year 2017 thanks to a continuing resolution signed into law in September 2017. The HUD Deputy Secretary Pamela Hughes Patenaude discussed these HUD disaster recovery grants with Governor Ricardo Rosselló during a visit to Puerto Rico in the aftermath of Hurricanes Irma and Maria. Governor Rosselló, quoted in the press release, added, “On behalf of the many thousands of survivors here in Puerto Rico, I want to | more...

February 2, 2018

How Do Student Loans Affect My FHA Home Loan Application?

By Joe Wallace

How do student loans affect my FHA home loan application? Some applicants worry about the amount of student loan debt they carry; after all the lender is required to determine the borrower’s debt-to-income ratio as a means to judge whether the loan is affordable or not. The debt ratio must be calculated using existing monthly debt, including student loans that are in forbearance. The fact that the loans are not being paid on at application time isn’t as critical as the idea that the loans may become a monthly obligation in the future, affecting the borrower’s ability to pay the mortgage loan. What do FHA loan rules say about student loans, and those student loans that are in deferment or forbearance? We use those two terms interchangeably here, defined as | more...