Articles Tagged With: FHA Home Loan

December 3, 2015

Mortgage Loan Trends: Lower, Then Steady Ahead Of Potential Volatility

On Tuesday there was improvement in mortgage loan rates, with some lenders moving back into sub-four percent territory. That’s a welcome development for those who have been floating in hopes of some kind of improvement; Wednesday didn’t bring more of the same, but rates did hold steady or move only a bit higher in some cases. This is a week for a great deal of potential volatility in rates for a variety of reasons connected to scheduled economic data releases, so locking and floating decisions are tricky–the closer we get to Friday, the greater the potential for higher rates. Friday, the Employment Situation Report comes out and that is a very important event depending on both the contents of that report and investor reaction to it. Some industry pros are | more...

November 30, 2015

Mortgage Loan Interest Rate Trends: Holding Steady on Black Friday

By Joe Wallace

Thursday was Thanksgiving, and with banks closed and the markets also not doing business, it was a short week. Mortgage loan rates stayed absolutely quiet on Friday, no surprise there as all eyes were on the Black Friday shopping news and other developments. But the coming week has some important scheduled economic data releases including jobless claims and the employment situation report. Factory orders is also a report due out this week–lots of potential indicators as to where the economy is heading (or is currently at) and that will no doubt fuel speculation about the Fed’s decisions about a possible December rate hike. In short, there is potential for volatility this week that borrowers on the fence about locking or floating should consider while making the choice. Floating could get | more...

November 27, 2015

FHA Loan Limits For 2016?

By Joe Wallace

Close to the end of each calendar year, the FHA and HUD issue a set of FHA loan guarantee limits for the coming new year. These limits, issued by county and variable depending on the housing market and other factors, do not put a cap on the amount of the actual loan you can apply for under the FHA single family home loan program, but the limits do regulate the amount of the loan guarantee by the government. The FHA loan limits are described on the FHA/HUD official site–the following information was issued last year and effective for the 2015 calendar year: “Each year, FHA recalculates its national loan limit based on a percentage calculation of the national conforming loan limit.” “Depending on those limits, FHA’s minimum national loan limit | more...

November 20, 2015

FHA Minimum Property Requirements in HUD 4000.1: Remaining Economic Life Of The Home

By Joe Wallace

HUD 4000.1 has a section with guidelines concerning the minimum property standards for homes to be purchased with an FHA mortgage. There are instructions to the lender concerning issues such as encroachments, overhead power lines, safety and related issues. HUD 4000.1 has specific language that requires certain aspects of the home be functional for the life of the loan. “The Mortgagee must confirm that the Structure of the Property will be serviceable for the life of the Mortgage. The Mortgagee must confirm that all foundations will be serviceable for the life of the Mortgage and adequate to withstand all normal loads imposed.” There is also a section that addresses FHA minimum standards for the remaining economic life of the property. These requirements exist to protect the investment made in the | more...

November 12, 2015

HUD 4000.1 On Lead Paint Disclosures

By Joe Wallace

Since the FHA and HUD published the new single family home loan rulebook, HUD 4000.1 earlier in 2015, we have been examining important aspects of that rulebook. The FHA changed/updated some portions of the rules, added other portions to existing regulations, and issued a message that lenders were expected to become familiar with HUD 4000.1 as a whole, rather than try to explain each and every instance of changed or modified policy in the new publication. So we’ve been tackling some of these relevant issues, discussing them individually as they appear in HUD 4000.1. One such issue has to do with lead paint disclosure requirements. HUD 4000.1 states, “If the Property was built before 1978, the seller must disclose any information known about lead-based paint and lead-based paint hazards before | more...

November 3, 2015

FHA Energy Efficient Mortgages: New Standards For 2016

By Joe Wallace

In 2016, FHA borrowers looking to add Energy Efficient Mortgage loans to their transaction will have some new standards to use related to the energy efficient improvements they wish to add. Thanks to a new partnership between the FHA, HUD, and the Department of Energy, certain ratios will be increased in 2016, according to a press release found at the FHA official site. “FHAs existing EEH policy allows stretch ratios for homes that are built or retrofitted to the 2000 International Energy Conservation Code (IECC). For standard FHA loans, debt-to-income (DTI) ratios are limited to 31 percent (front-end) and 43 percent (back-end).” “Under FHA policy for the EEH mortgage, these DTI ratios can be increased to 33 percent and 45 percent respectively. To increase opportunities for homeowners to achieve and | more...

What if my home was damaged in a natural disaster?

October 30, 2015

HUD 4000.1 On FHA New Construction Loans

By Joe Wallace

When you review your options for an FHA home loan, you’ll run across loan information about FHA mortgages for “existing construction” loans and “new construction” or “under construction” loans. The requirements for new construction versus existing construction may differ due to a variety of reasons including the fact that the borrower can’t always take possession of a new or under construction home right away once the loan has closed. FHA loan rules for existing construction include appraisal requirements that may differ (procedurally) from new construction loans. For these reasons, the FHA has specifically defined what constitutes a new, proposed, or under construction property versus one that is “existing construction”. Existing construction is more or less a home that has already had an owner and has been in existence for a | more...

October 29, 2015

FHA Home Loans: How Mortgage Payments Are Calculated

By Joe Wallace

The FHA loan rulebook for single-family home loans has a section instructing the lender, “For all transactions, except non-credit qualifying Streamline Refinances, the underwriter must calculate the Borrowers Total Mortgage Payment to Effective Income Ratio (PTI) and the Total Fixed Payment to Effective Income ratio, or DTI…” This is required to help the lender determine whether the borrower can afford the new loan or not. And borrowers should know how the mortgage payment is calculated for the same reason. It’s easy to assume that your monthly mortgage payment will be the amount of your home loan divided but the term of the loan (plus any interest), but as you’ll see, it’s not quite that simple. FHA loan rules in HUD 4000.1 spell out a list of things that must be | more...

October 29, 2015

Mortgage Rate Trends: Moving Higher Post-Fed

By Joe Wallace

The Fed announcement on Wednesday did not include a statement that interest rates would be raised, but mortgage loan rates pushed a bit higher yesterday regardless. There were indications from the Fed that December’s statement could include more specific information about a rate hike, and that served to put upward pressure on mortgage loan rates as investors reacted to those indications. Not everything the Fed says and does is clear cut–sometimes the tone of the announcements can be enough when it comes to whether or not a rate hike might happen–when the Fed is down on the economy in general, that’s a good sign that a hike in rates is not forthcoming. But when the Fed makes more positive statements, it can be interpreted as the foreshadowing of actions to | more...

October 26, 2015

FHA Loan Rules For Appraisals Under HUD 4000.1

By Joe Wallace

When the FHA and HUD published the new single family home loan rules found in HUD 4000.1, the agencies did not provide a list of every single rule or portion of the rules affected by changes in HUD 4000.1. HUD specifically stated at publication time that it’s the lender’s responsibility to be familiar with the rules as they are today. We’ve been discussing the new rules with that notion in mind. One important area of the new rulebook that’s important to be familiar with? FHA appraisal requirements, which go beyond minimum property standards and other rules. FHA loan rules spell out what is expected of the lender during the appraisal process, starting with this statement found in Section II Part A under “Loan Origination and Processing”: “The Mortgagee must order | more...