Articles Tagged With: FHA Home Loan

June 29, 2017

What Is An FHA Loan Appraisal?

What is an FHA appraisal? Simply put, it’s a tool used by the lender to make sure the property to be purchased with an FHA mortgage meets minimum standards. It’s also used by the lender to establish the fair market value of the property for the purpose of setting the proper FHA loan amount. FHA appraisals require a trained, impartial professional who is approved by the FHA. The lender and the appraiser do not “work together” in such a way that puts the appraiser in a compromising position by the lender. Instead, the appraiser is selected, she does her work and submits reports that detail the results of the appraisal. How do FHA loan appraisals work? The appraiser must visually inspect the property, noting any defective conditions, building code issues | more...

What Is The FHA One-Time Close Program? Part Two

June 26, 2017

What Is The FHA One-Time Close Construction Program? Part Two

By Bruce Reichstein

What is the FHA One-Time Close / Single-Close Construction Program? In our previous blog post, we discussed the basics of this FHA construction loan program-what it means to the borrower seeking an FHA new construction loan and how having a single loan (instead of two loans as with typical construction loan situations) can be an advantage for the borrower. FHA One-Time Close mortgages are for those who want an FHA construction loan for a property that has yet to be built. They can be more complex than typical new purchase FHA loans, but for those who need a construction loan, One-Time Close has definite advantages. They include a single closing date, and an early mortgage loan interest rate lock that can potentially safeguard the borrower against rising mortgage rates should | more...

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

June 26, 2017

What Is The FHA One-Time Close Construction Program? Part One

By Bruce Reichstein

What is the FHA One-Time Close / Single-close construction program? Who is it meant for? These are questions with important answers for potential FHA borrowers who are interested in applying for an FHA mortgage to have property built for them instead of buying an existing construction property. One-Time close mortgages are construction loans that differ from standard construction loans in that there is a single closing date for the loan rather than the traditional two closing dates. The borrower saves money on a one-time close loan thanks to the single loan for construction costs, land purchase, and the typical expenses associated with a home loan. These savings work in ways you might not expect. One advantage of this type of construction loan is that the lender and borrower arrive at | more...

Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

June 22, 2017

Who Qualifies For An FHA Loan? Part Two

By Joe Wallace

Who qualifies for an FHA home loan? Many borrowers want to know if they can get approved for an FHA mortgage even with low FICO scores, past mistakes on their credit history, or other issues. What does your lender have to see in your financial details in order to approve your home loan? FHA Borrower Credit Scores The main confusion over FHA home loan FICO score requirements comes when a potential borrower reads FHA loan program standards but doesn’t understand that lender standards may also apply. FHA home loan rules state that a borrower with a FICO score between 500 and 579 is technically eligible for an FHA home loan provided a larger down payment of 10% is made. But a borrower with a 500 FICO score may discover that | more...

June 19, 2017

FHA Streamline Refinance Benefits

By Bruce Reichstein

FHA Streamline Refinance rules state that in order for the loan to be approved, the lender must determine that the refinance loan has some type of actual benefit to the borrower. What are the benefits of FHA Streamline refi loans and which one is right for you? FHA Refinance Basics FHA refinancing is usually for either existing FHA mortgages or non-FHA mortgages. However, for FHA Streamline Refinance loan transactions, only existing FHA mortgage loans are allowed. FHA refinancing requires a new credit check and appraisal for any transaction that features cash back to the borrower above and beyond refunds of money paid up front for items that wind up being financed into the mortgage loan. However, FHA Streamline loans don’t allow money back to the borrower, so there’s no FHA-required | more...

June 16, 2017

What Is The Average Credit Score Needed To Buy A House?

By Joe Wallace

If you are a first-time home buyer, you’re likely asking a very common (and very important) question. What is the average credit score needed to buy a house? To get the answer, we decided to see what one of the three major credit reporting agencies, Experian, has to say on this subject. On the official Experian website, the answer to this question might surprise you: “There is no set minimum score to buy a house.” That’s right, you just read a direct quote from the official site of the credit reporting agency, Experian. But that statement does NOT mean there are no FICO score or credit score standards. Each lender has a set of credit score ranges it uses to determine creditworthiness. And many federally insured or guaranteed home loan | more...

June 14, 2017

Closing Costs And Earnest Money For FHA Loans

By Joe Wallace

In a recent post we discussed FHA loan down payments and how the lender is required to verify that down payment money is coming from acceptable sources. Did you know the lender is also required to verify the sources of earnest money and funds to pay closing costs? It’s true-FHA home loan rules include requirements that these funds comply with FHA loan rules. For example, if your earnest money comes to you in the form of a gift, those gift funds must meet the rules and requirements of the FHA Loan Handbook HUD 4000.1 section titled Gifts (Personal and Equity): “Gifts refer to the contributions of cash or equity with no expectation of repayment.” This means your earnest money gift must never carry any strings attached. But that isn’t all-the | more...

June 1, 2017

HUD Announces Settlement In California Fair Housing Case

By Joe Wallace

The Department of Housing and Urban Development has announced a settlement in a California Fair Housing Act discrimination case. According to the FHA/HUD official site, HUD “reached an agreement with the owner and manager of a California apartment complex, resolving allegations they discriminated against tenants because of their national origin and familial status. Two related complaints filed with HUD alleged that the manager of the Four Palms Apartments in Mountain View, California, made discriminatory statements about Latino residents and prohibited their children from playing outside”. Such discrimination is not permitted under federal Fair Housing Act laws. “A family’s right to enjoy their home shouldn’t depend on where they are from or whether they have children,” said Bryan Greene, HUD’s General Deputy Assistant Secretary for Fair Housing and Equal Opportunity, who | more...

May 11, 2017

FHA Loan Appraisal Questions: Dug Wells

By Joe Wallace

Are properties with dug wells a problem when it comes to FHA loan approval? That’s what one reader asked us this week in the comments section: “Would like to know if a dug well is OK for an FHA loan.” Short, simple, and to the point. The answer is, unfortunately, not so straightforward. The reader was asking a question in response to a blog post we made back in 2010 which referenced then-applicable FHA loan rules for wells-including dug wells. However, the references in that old blog post have since been replaced with updated guidance and instructions to the FHA appraiser. HUD 4000.1 (the FHA loan rule book) is the most current reference, and contains this section that references dug wells: “The Appraiser must report when water to a Property | more...

May 10, 2017

FHA Mortgages For Multi-Unit Properties

By Joe Wallace

A reader asked us a question this week in the comments section about FHA mortgages for properties with multiple units. “I want to buy a 6 residential unit apartment building with a very small store front commercial space on the property (computer repair shop that takes up about 15% of the property space) I plan on living in one of the apartment units. Is there an FHA loan out there for this situation?” FHA mortgages under the single family loan program do allow FHA loans to qualified borrowers for multi-unit properties. The rules for these purchases are found in HUD 4000.1, which states: “FHAs programs differ from one another primarily in terms of what types of Properties and financing are eligible. Except as otherwise stated in this SF Handbook, FHAs | more...