Articles Tagged With: FHA Home Loan

February 29, 2016

Mortgage Rate Trends: Higher Friday

Mortgage rates moved higher on Friday, pushing closing costs up for some, actual rates up for others. At the end of the day many were still offering a best execution 3.625% for 30-year fixed rate conventional mortgage loans. FHA mortgage loan rates are holding in a range between 3.25% and 3.5% depending on the lender and other factors. FHA mortgage loan rates tend to vary more among participating lenders than conventional rates, so your experience may vary. As always, the rates mentioned here are best execution rates, meaning your FICO scores, loan repayment history and other financial qualifiers will play a big role in your access to rates at or near the ones listed here. Best execution rates are not available to all borrowers or from all lenders. Even though | more...

February 16, 2016

FHA Loan Rules In HUD 4000.1: Signatures On Loan Documents

By Joe Wallace

FHA loan rules in HUD 4000.1 spell out a variety of procedures and requirements for the handling of new purchase mortgage loans and refinance loans. One portion of this new (published in late 2015) FHA single family home loan rulebook governs the requirement for borrower signatures on key documents in the FHA loan process. Borrowers must not be asked to sign blank pages or incomplete documents–that’s one of the most basic requirements of the FHA loan procedure. But what are the other rules? Can a borrower use a power-of-attorney for portions of the loan process? What other documents require the borrower’s signature? A section of HUD 4000.1 titled, “Signature Requirements For All Application Forms” states: “All Borrowers must sign and date the initial and final Fannie Mae Form 1003/Freddie Mac | more...

February 12, 2016

HUD Proposes Changes To Manufactured Housing Standards

By Joe Wallace

One common question asked by some about the FHA single-family home loan program is whether an FHA mortgage can be used to purchase an RV-type mobile home or a houseboat. The answer in both cases is no because a house boat or recreational vehicle/RV motor home cannot be affixed to a permanent foundation. Therefore they cannot be sold as “real property” under the law, which makes them ineligible for an FHA mortgage. The lines between recreational vehicles and manufactured housing or mobile homes can be blurry sometimes–why do some people confuse an RV with a mobile home? Foundation issues and real property status aside, it seems to be due to the fact that some people live out of their RVs in a similar way to a mobile home–they can be | more...

February 11, 2016

FHA Loan Questions: The Importance of a Home Inspection

By Joe Wallace

What is the difference between a home inspection and an FHA appraisal of a property to be purchased with an FHA mortgage loan? The appraisal is required, but not as complete as a home inspection (which is optional but vital to being a fully informed borrower). The FHA appraisal only insures the home meets MINIMUM standards and state/local building code. The confusion over FHA appraisals and home inspections is one reason why we sometimes get reader questions like the one that came in recently asking about a roof issue: “I have a question regarding our we bought in August 2014. When we 1st bought the home we were told that the roofing was fixed and replaced 3 yrs before we bought it. Well now we have leaks and mold and | more...

February 10, 2016

HUD Settles Connecticut Fair Housing Discrimination Case

By Joe Wallace

The Department and Housing and Urban Development and a group of Connecticut landlords have reached a settlement in a housing discrimination case. According to a HUD press release, “The U.S. Department of Housing and Urban Development (HUD) today announced an agreement with a group of Connecticut landlords to resolve allegations they discriminated against families with children. HUD reached the agreement with New Britain-based Green New Britain, LLC, and PBJ Management, and their on-site property manager for allegedly refusing to rent a two-bedroom apartment to a single mother and her two young children.” Violations of Fair Housing Act laws can affect the home buying process at every level. In this case, the victims were renters, but plenty of people seek rental housing while searching for a new home to purchase. The | more...

February 4, 2016

HUD Reaches Settlement In Home Loan Discrimination Case

By Joe Wallace

The Department of Housing and Urban Development issued a press release this week announcing a $1.9 million settlement with a bank in Tennessee over a housing discrimination complaint. According to HUDNo.16-009, the settlement with First Tennessee Bank resolves “allegations that the bank discriminated against African-American and Hispanic applicants by denying them mortgage loans and by allegedly failing to place bank branches in minority-concentrated areas” according to the press release. The Fair Housing act makes it illegal to discriminate, according to the HUD official site, “in the terms, conditions, or privileges of sale of a dwelling because of race or national origin. The Act also makes it unlawful for any person or other entity whose business includes residential real estate-related transactions to discriminate against any person in making available such a | more...

Can I buy a manufactured home with an FHA loan?

February 4, 2016

FHA Loan Assumption Rules (Part 2)

By Joe Wallace

In a recent blog post we discussed the rules for assuming an FHA mortgage. FHA home loans are assumable in most cases with the participation and approval of the lender. HUD 4000.1 spells out the rules for all FHA single family home loan assumptions including outlining when a down payment may be required and when a credit check is necessary. For borrowers who assume an FHA mortgage with the intent of using the property as the primary residence, no down payment is usually required. Regardless of whether a down payment is required or not, one important question about loan assumptions for the “seller” of the home remains–is the original owner of the property released from liability once the FHA loan is assumed by the “buyer”? According to HUD 4000.1, “The | more...

February 2, 2016

FHA Mortgage Loan Down Payment Rules

By Joe Wallace

FHA loans require a minimum down payment of 3.5%–that’s typical for many FHA mortgages. In some cases, depending on the nature of the loan and the borrower’s financial qualifications and FICO scores, the required down payment may be higher. But no matter what the down payment amount might be (and it will vary from loan to loan) the FHA has specific rules governing the sources of and verification for down payment funds. The FHA loan rulebook for single family mortgage loans is HUD 4000.1, which refers to the down payment as a “minimum required investment”: “Minimum Required Investment (MRI) refers to the Borrowers contribution in cash or its equivalent required by Section 203(b)(9) of the National Housing Act, which represents at least 3.5 percent of the Adjusted Value of the | more...

February 2, 2016

FHA Loan Rules In HUD 4000.1: Inducements To Purchase (Part 2)

By Joe Wallace

In our last blog post, we discussed FHA loan rules found in HUD 4000.1 on inducements to purchase and what happens if a seller or other interested third party contributes more toward closing costs or other allowed expenses than is allowed by FHA mortgage loan rules. According to HUD 4000.1, “Inducements to Purchase refer to certain expenses paid by the seller and/or another Interested Party on behalf of the Borrower and result in a dollar-for-dollar reduction to the purchase price when computing the Adjusted Value of the Property before applying the appropriate Loan-to-Value (LTV) percentage.” This information is helpful–but what constitutes an inducement to purchase? HUD 4000.1 lists them–they include but are NOT limited to the following: –contributions exceeding 6 percent of the purchase price; –contributions exceeding the origination fees, | more...

February 1, 2016

FHA Mortgage Loan Rules In HUD 4000.1: Inducements To Purchase

By Joe Wallace

There are many rules for FHA home loans that govern what buyers and sellers can and cannot do. For example, the borrower must make a minimum down payment, and the source funds from that down payment cannot come from credit card cash advances or payday loans. But there are rules for the seller (and interested third parties) as well. Did you know FHA loan rules govern what a seller can and cannot contribute towards the purchase of the property? In some cases there are contributions that are permitted but only within certain limits. From HUD 4000.1, we learn the following: “Interested Parties may contribute up to 6 percent of the sales price toward the Borrowers origination fees, other closing costs and discount points. The 6 percent limit also includes: –Interested | more...