Articles Tagged With: FHA Home Loan

December 8, 2017

Higher FHA Loan Limits For 2018

The FHA has announced FHA loan limits for 2018, and the new numbers mean good news for those looking to buy a home in the new year. The “national conforming loan limit” for 2018 is set at $453,100, up from last year’s limit of $424,100 (see below). The higher limit means more potential borrowing power for qualified FHA loan applicants. According to the announcement on the FHA official site, there are higher limits for 2018. The Federal Housing Administration calculates “forward mortgage limits based on the median house prices in accordance with the National Housing Act. FHA’s Single Family forward mortgage limits are set by Metropolitan Statistical Area (MSA) and county and are published periodically.” The FHA sets loan limits “at or between the low cost area and high cost | more...

December 6, 2017

FHA Loan Rules For Income Verification: Part-Time Employment Income

By Joe Wallace

Is it possible to be approved for an FHA home loan using part-time employment income? There are indeed FHA loan rules for this type of income and instructions to the lender for how it is to be reviewed. HUD 4000.1, the FHA home loan handbook, states that all verifiable income must meet certain FHA minimum requirements including the ability to verify two years of employment (not necessarily with the same employer). One area some borrowers may be concerned with in this area is part-time income. Does the FHA allow a lender to verify and count as income the earnings from a part-time job? The rules for this are found on page 200 of HUD 4000.1, which begins by defining what the FHA considers part-time income: “Part-Time Employment refers to employment | more...

December 1, 2017

Can I Get an FHA Home Loan For a Commercial Property?

By Joe Wallace

Can I get an FHA home loan for a commercial property? The answer to this question is more complicated than a simple yes or no-much depends on what local zoning laws will allow, and how “residential” the property is. FHA home loans are not just for typical suburban homes. There are a wide variety of house hunters, all looking for different types of properties to suit their needs, and there are plenty of options available aside from the suburban home. A two bedroom home in the suburbs may not be right for borrowers looking for a new home close to work in the city, or for those interested in a different type of residence than a standard house. FHA insured mortgages are available for condos, duplexes and manufactured homes. FHA | more...

November 29, 2017

FHA Loan Rules For Loan Approval: Federal Debts and Tax Liens

By Joe Wallace

FHA loan rules for loan approval include instructions to the lender about unpaid federal debts and tax liens. Your chosen participating FHA lender is responsible for verifying your income, employment record, and your monthly financial obligations-which may include tax obligations such as a lien, or a federal debt. Unresolved taxes and federal debt can be a serious issue that will affect a home loan application. The status of such debt is one of the most important factors. According to HUD 4000.1, “Mortgagees are prohibited from processing an application for an FHA-insured Mortgage for Borrowers with delinquent federal non-tax debt, including deficiency Judgments and other debt associated with past FHA-insured Mortgages.” The FHA loan rules in this section also add that the lender is required to determine “whether the Borrower(s) have | more...

November 21, 2017

What Are The FHA Loan Rules For Occupancy?

By Joe Wallace

What are the FHA loan rules for occupancy? This is a question many borrowers are curious about, especially those who are interested in becoming landlords and earning rental income from their property. Does the FHA single family home loan program allow a borrower to rent out the property purchased with an FHA mortgage? FHA Loans Are Specifically For Owner/Occupiers HUD 4000.1, the FHA loan handbook, states clearly that at least one person obligated on the FHA mortgage is required to use the property as their primary residence: “At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year.” Furthermore, the FHA clearly defines what it considers to be a “principal residence”. On page 140 of | more...

November 20, 2017

HUD To Provide $5 Billion For Hurricane Harvey Recovery In Texas

By Joe Wallace

The Department of Housing and Urban Development (HUD) has announced a multi-billion dollar pledge to help Texas recover from Hurricane Harvey. According to a press release on the HUD official site, the funds will “support the repair of damaged homes, businesses and critical infrastructure in the State.” According to the press release, the funds are possible via the Continuing Appropriations Act, 2018 and the Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017. This “appropriated $7.4 billion in CDBG-DR funding for major disasters declared in calendar year 2017. To distribute these funds, the Act requires HUD to direct the funds to the areas most impacted by qualifying disasters.” The press release adds that HUD will announce additional grants “to other jurisdictions as more data become available on the unmet needs | more...

November 16, 2017

What Should I Know About FHA Loan Requirements?

By Joe Wallace

What should I know about FHA loan requirements? The first thing to keep in mind is that no single factor determines your ability to borrow. Your FICO score is an important part of the loan approval process, but it’s not the only thing you will need to pay attention to in the 12 months leading up to your loan application. FHA Loan Approval Requirements FHA loan standards include a review of your FICO scores to determine whether you are eligible for maximum financing with a 3.5% minimum down payment. Those with FICO scores at 580 or higher are technically eligible for maximum financing. However, this is the FHA loan program minimum standard and your lender may have higher FICO score requirements. FICO scores affect your down payment, interest rate offerings, | more...

November 14, 2017

Do First Time Home Buyers Have Different FHA Loan Requirements? Part Two

By Bruce Reichstein

Do first time home buyers have different FHA loan requirements than those who have owned a home before? The short answer is no-FHA mortgages do not have different terms or requirements for different types of borrowers. First time home buyers may find that an individual lender or financial institution offers incentives for first time buyers, but these programs are not mandated or regulated by the FHA. The FHA loan FICO score minimum requirements, appraisal rules, regulations governing verification of down payment funds and other requirements are identical no matter who is applying. That is not to say that FICO scores and other financial qualifications don’t change how an FHA mortgage loan is handled-in that area borrowers will find different requirements depending on whether the borrower is deemed a good credit | more...

November 6, 2017

Why Do People Prefer FHA loans? Part Two

By Joe Wallace

Why do people prefer FHA loans? That’s a question we’ve been examining recently. In a recent blog post we discussed FHA loan down payments, credit requirements, and related issues-all reasons people might turn to an FHA mortgage instead of a different kind of home loan. But there are other reasons to think about FHA mortgages, reasons that aren’t as as top-of-mind as what kind of down payment you might need. Consider the consumer protections and benefits built in to FHA mortgages that make these loans attractive. FHA Loans Permit Early Payoff Of The Mortgage Without Penalty The FHA lender handbook, HUD 4000.1, states that the borrower cannot be penalized for early payoff of the mortgage. In a section covering pre-payment of FHA loans, “pre-payment” is defined as follows: “A Partial | more...

November 6, 2017

Why Do People Prefer FHA Loans?

By Bruce Reichstein

Why do people prefer FHA loans? It’s a question many ask, especially when comparing loan options to conventional, VA, or other non-FHA mortgages. What’s the appeal of the FHA mortgage loan? Why should first-time home buyers consider this option? FHA Loans Are Flexible FHA home loans aren’t just for one type of home, or for one type of buyer. There is no income limit for an FHA mortgage, the borrower has to be able to afford the mortgage based on the borrower’s debt-to-income ratio (how much money you have coming in compared to the amount going out each month for financial obligations). Credit ratings, employment, and other factors are also important, but the misconception that FHA mortgages are only for those who need financial help isn’t true. Any financially qualified | more...