Articles Tagged With: FHA Home Loan

September 22, 2016

FHA UFMIP: A Reader Question

A reader asks, “I want to purchase at home for 141,000 and I am paying the 3.5 down payment which totals it 136,065. How much will I pay in Up Front mortgage and annually MIP. If I pay the UFMIP in closing will it still be added into to total amount loan?” Let’s begin with a few basics. UFMIP stands for Up Front Mortgage Insurance Premium, which is required as one of the closing costs of an FHA mortgage loan. According to HUD 4000.1, “Most FHA mortgage insurance programs require the payment of UFMIP, which may be financed into the Mortgage. The UFMIP is not considered when calculating the area-based Nationwide Mortgage Limits and LTV limits.” That last sentence means that your loan limit is unaffected by the amount of | more...

September 21, 2016

FHA Loan Questions: FHA Lenders

By Joe Wallace

A reader asks, “Do you have a local list of approved FHA lenders for first time home owners in the amount of $50,000.00 and lower?” This is a common type of question; we get asked this sort of thing quite frequently in the comments section. There are a variety of reasons why a borrower might wish to apply for a comparatively low-dollar amount FHA loan. One is that some housing markets simply don’t have the higher prices; another is that a borrower wishes to purchase a mobile or manufactured home rather than what’s known as “stick-built” housing which is built on-site. What’s important to know is that lender standards vary from place to place. What’s offered by one lender may not be offered by another. With that in mind, it’ | more...

September 20, 2016

Down Payment Rules For FHA Loans

By Joe Wallace

FHA home loans differ from conventional mortgages in many ways, and one of those ways is that a lower down payment is required with FHA mortgages than for many conventional loans. A conventional mortgage may require a down payment of ten percent or more, depending on the borrower’s financial qualifications and other factors. But the FHA loan minimum down payment is (in most cases) 3.5% of the adjusted value of the property. But there are specific rules governing the down payment for mortgage loans, and FHA mortgages are no exception. The borrower’s “minimum required investment” or MRI (as HUD 4000.1 describes the down payment) must come from approved sources. Those sources can include a borrower’s own funds, gift funds that meet FHA requirements, cashed-out investments, proceeds from retirement accounts that | more...

What You Need To Know About Your FHA Home Loan

September 13, 2016

FHA Loan Reader Questions: “Identity of Interest” And Below-Market Rents

By Joe Wallace

A reader asks, “My wife and I have resided in a three family home for 29 years. We have paid significantly below market rate rent for all these years because 1) initial elderly landlords just wanted good tenants and they liked us, 2) we looked after the elderly landlord after her husband died for many years and 3) the current owner was always appreciative for what we did for her mother (landlord has since passed and property is in Family Trust, their daughter is the trustee).” “She put the property up for sale and we submitted the winning bid. Now, two weeks before closing, the underwriter has said that because we paid less than market value for all those years that now we have an Identity of Interest and required | more...

September 9, 2016

HUD Announces Fair Housing Settlement With City Of Phoenix

By Joe Wallace

The Department of Housing and Urban Development has announced progress in a fair housing issue involving the city of Phoenix, Arizona. According to a press release on the FHA/HUD official site, “The U.S. Department of Housing and Urban Development (HUD) today announced today an agreement between the City of Phoenix, Arizona and two fair housing organizations resolving multiple complaints of housing discrimination. The Southwest Fair Housing Council (SFHC) and the Arizona Fair Housing Center (AFHC) alleged Phoenix violated the Fair Housing Act, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act, and Title II of the Americans with Disabilities Act (ADA) in its administration of the City’s federally funded Housing Choice Voucher program.” The press release goes on to say that complaints filed by | more...

Can I buy a manufactured home with an FHA loan?

September 8, 2016

FHA Loans For Mobile Homes and Manufactured Homes: A Reader Question

By Joe Wallace

A reader asked recently, “Why does FHA not finance single wide mobile homes?” This question reveals one of the most common misconceptions about FHA loans-that the FHA itself will process your home loan paperwork. It does not; instead, participating FHA lenders will furnish, process, and approve or deny your mortgage application. In some cases the lender may be required to submit this paperwork to the FHA for review before a final decision is made, but the lender is the borrower’s point of contact for the transaction. With that in mind, let’s examine what HUD 4000.1 says about mortgage loans for mobile homes/manufactured housing: “Manufactured Housing refers to Structures that are transportable in one or more sections. They are designed to be used as a dwelling when connected to the required | more...

September 7, 2016

FHA Loan Rules For Residency: A Reader Question

By Joe Wallace

One not-so-commonly asked questions about FHA loans is still an important issue to address. Here’s a recent reader question on a borrower’s ability to be approved for an FHA mortgage without being a U.S. citizen: “Ive just moved to the US from the UK on a K-1 Fiance Visa. Ive been here around 5 months. Just received my work authorization card through the mail, waiting for my social security number now. Ive been working voluntarily since I arrived…would we qualify for an FHA Mortgage Loan? Ive contacted two lenders who have told us that we might be entitled to a loan but they’re unsure.” The short answer to this questions is that technically speaking, non-U.S. citizens are eligible for FHA home loans unless they are in the United States illegally. | more...

September 2, 2016

Foreclosure Avoidance on FHA Mortgages: The Trial Payment Plan

By Joe Wallace

The FHA recently announced changes to its policies designed to help those who purchased homes with FHA mortgages and have since fallen into financial trouble to avoid foreclosure. There are many government programs to help borrowers keep their homes in hard times including the Obama mortgage, and the FHA Home Affordable Modification Program or HAMP. If you have fallen behind on your mortgage payments on an FHA mortgage, the information here will be of special interest to you. Those who are under consideration for HAMP may learn they have to complete a trial payment plan before the HAMP modification can be finalized and approved. But what does this trial payment plan (also referred to as TPP) entail? The FHA announced modifications to the HAMP program this summer, and in FHA | more...

September 1, 2016

FHA Loan Reader Questions: Judgments and Loan Approval

By Joe Wallace

A reader asks, “I have a judgment for a car that was repossessed in May 2010. It was a car purchased by my husband with myself as cosigner. I didnt plan on paying it off as we are waiting on a divorce and he has no plans to help pay it off. Will I be able to get a FHA mortgage with this lingering on my credit? I do have credit scores in the 650 range and higher.” Community property laws in a given state, where applicable, may affect the answer to this question, but in general, FHA loan rules in HUD 4000.1 state that judgments on a borrower’s credit history must have some kind of resolution. On pages 177 and 178 of HUD 4000.1 we learn a great deal | more...

Buying A Fixer-Upper With An FHA 203(k) Rehab Loan

August 30, 2016

FHA Loans and Foreclosure Avoidance: The FHA HAMP Loan

By Joe Wallace

When you purchase your home with an FHA mortgage loan, chances are you’re thinking more about moving in, getting settled, and making the home your own than you are the possibility that you could encounter financial hardship at some point and miss mortgage payments. But these things do happen to some borrowers, and the FHA has a program set up to help those who get into financial trouble. The FHA HAMP program was created to help borrowers avoid foreclosure and keep them in the home. FHA HAMP is a loan modification program and not a refinance loan, which is an important distinction to make. Under the terms of the FHA HAMP program, the FHA permits ” the use of a partial claim up to 30 percent of the unpaid principal | more...