Articles Tagged With: FHA Home Loan

August 11, 2023

FHA Loan Rules For Borrowers With Non-Traditional Credit

FHA loans have flexible standards regarding the kinds of credit history a borrower brings to the loan application process. By that, we mean that applicants who have non-traditional or even insufficient credit history may be able to get a loan approved depending on the circumstances. Getting a loan with insufficient credit history is harder, but borrowers can call the FHA at 1-800 CALL FHA to get a referral to a local housing counselor who can provide advice. Applying For An FHA Loan With Non-Traditional Credit Borrowers with non-traditional credit or insufficient credit history may be asked to provide additional documentation and paperwork as part of this process. You could be required to furnish tax documents, utility bills, and/or any other recurring payment that could help establish credit history. FHA loan | more...

August 7, 2023

FHA Loan Reader Questions: Foreclosure Wait Periods

By Joe Wallace

Here is a variation on a common reader question. “I had a foreclosure on my house. What is the waiting period before I qualify for an FHA mortgage?” The first thing to do is call the FHA at their toll-free number, 1-800 CALL FHA, and ask for a referral to an FHA/HUD-approved housing counselor in your local area. A housing counselor can assist in areas like this with advice on how to proceed toward becoming a homeowner once again after a foreclosure, bankruptcy, job loss, or other issues. The answer to the reader’s question varies greatly depending on circumstance, lender standards, and whether or not the home foreclosed upon was purchased with an FHA mortgage. While the FHA loan program does include options for borrowers who have experienced a qualifying | more...

August 4, 2023

FHA Loan FICO Score Requirements

By Joe Wallace

“Is my credit score good enough to get a mortgage?” That is among the most common questions about FHA loans and it’s easy to understand why. In times of high interest rates and competitive housing markets, every advantage counts. Do borrowers with lower credit scores still have a shot at getting a home loan? FHA loan rules for single-family home loans technically permit FHA loan approval for borrowers with FICO scores above 500. If your credit scores are within the 500-579 range you may be asked to make a higher down payment. But if your FICO scores are 580 or higher you qualify by FHA standards for the lowest 3.5% down payment. Here is the official FHA loan FICO score table from the FHA official site which lists the FICO | more...

August 3, 2023

Researching Your FHA Home Loan

By Joe Wallace

If you are a first-time FHA home buyer, there are important resources that can help you make smart choices in the earliest stages of the loan. Some of those resources come from your local real estate agent or lender, but more help can come from the FHA itself. Do Some Early Research If you include some time to research home loans in the early stages of being a first-time homebuyer, along the way you’ll likely find some information that sounds good but doesn’t really apply to you. One example comes by way of those financial commentators warning first-time home buyers away from VA and FHA mortgages. Their argument? FHA or VA loans might cost you thousands more than other mortgage loan options. The argument goes something like this. “First-time home-buyer | more...

July 27, 2023

Buying A Home? Questions For Your Lender

By Joe Wallace

If you have never purchased a home before, you might be wondering how you can improve the overall experience, get good advice, and make a more informed decision on purchasing a house. One way to do that is to compare lenders (five is a good number) and ask some important questions of each one. Ask Your FHA Lender Which Loans Are Most Popular Some lenders have a lot of interest in some loans and none at all for other FHA loan options. Ask each lender, “What are the most popular mortgages you offer. Why are they so popular?” If the lender can’t offer the type of loan you need, you will need to move on. Not all lenders offer all FHA loans. Some lenders won’t issue manufactured home loans, others | more...

July 25, 2023

Which FHA Loan Is Right For You?

By Bruce Reichstein

There are some home loan options some won’t consider. A shorter loan term is one. In an era where lower monthly payments seem to be the priority for some borrowers more than saving money over the entire course of the loan, a longer loan term makes sense. But for some, these are essential aspects of the loan to consider. If you can afford to pay more each month on your mortgage, would you do so to shorten your loan term? FHA Condo Loans, FHA Manufactured Homes Are you surprised there are separate FHA loans for each property type listed above? These different loans are needed simply because each property type’s considerations differ. Manufactured homes can’t be older than regulations allow, but existing construction homes don’t have the same rule. Condo | more...

July 14, 2023

FHA Loan Options To Consider

By Joe Wallace

There are many options for those who want to buy or refinance a home using an FHA mortgage. Did you know that FHA loans feature a choice between fixed and adjustable rate loans, and that you can add energy efficient features to the home you buy or refinance? These options and many more are option to qualified borrowers who get approved for FHA mortgages. The choices you have with a new purchase FHA loan are varied. In addition to the type of loan–fixed rate mortgage, adjustable rate mortgage, growing equity mortgage loans and others–you also have a choice of housing available to you under the FHA loan program. You can select a typical suburban home, but are not limited to doing so. FHA Loan Types: Condos, Manufactured Homes There are | more...

June 30, 2023

Is an FHA Home Loan Right For You?

By Joe Wallace

Mortgage loan interest rates have increased significantly since hitting all-time lows in years past. In 2023, some renters are now wondering whether it’s smarter to rent or own in the current housing market. Some can afford to wait to buy until the rates return to a consistently lower range, but others have to buy soon, no matter what the state of the housing market. FHA Loans Versus Conventional Loans And for these borrowers, FHA loans, being government-backed, often feature interest rates and terms competitive with some conventional alternatives. They can also be competitive with conventional loans when it comes to terms. No penalty for early payoff, the ability to refinance with an FHA Streamline should conditions make that option more viable, and a lower down payment requirement are all features | more...

June 26, 2023

Is It Possible To Have Multiple FHA Loans?

By Joe Wallace

Many people want to know if they can apply for more than one FHA loan at a time. In some cases this is because the potential borrower wants to buy a home they don’t intend to use as their primary residence. In others, the issue might be that a larger home is needed due to a change in family size. Are these reasons for having more than one FHA loan valid under FHA loan rules? What FHA Loan Rules Say FHA loan rules for the single-family home loan program in the FHA Single-Family Handbook generally permit FHA loans only for owner-occupiers. The short answer to the question, “How many FHA loans can I have at the same time?” is ONE. The home must be occupied by at least one person | more...

June 22, 2023

FHA Loan Rules For Income: Investments, Trusts, and Promissory Note Payments

By Joe Wallace

Part of the FHA loan approval process involves the lender verifying an applicant’s income. FHA rules state that for purposes of calculating a borrower’s debt-to-income ratio, only verifiable income can be counted in that ratio. Do FHA rules allow a borrower’s interest or dividend payments from investments to be counted as verifiable income? For some borrowers, this can be an important question. According to the FHA Lender’s Handbook, “The Mortgagee must verify and document the Borrower’s Investment Income by obtaining tax returns for the previous two years and the most recent account statement.” Additional instructions to the lender for this issue include the requirement that when making the calculation. “The Mortgagee must subtract any of the assets used for the Borrower’s required funds to close to purchase the subject Property | more...