Articles Tagged With: FHA Home Loans

February 10, 2016

Mortgage Rate Trends: Moving Even Lower

Normally we don’t post on a near-daily basis about mortgage rate trends, but this week is different as we’re seeing rates moving lower than they have been in quite some time, and it’s unclear how long this trend could last. So we’re paying more attention to this situation until things settle down…. Mortgage rates moved even lower on Tuesday, putting many conventional mortgage best execution rates into the mid-three percent range. At the time of this writing, our sources believe that this is a short-term shift due to economic forces, pending statements from the Fed, and market activity. How long the downward movement continues remains to be seen, but some market watchers point out that when the headlines about the Fed start coming out over the next two days, it | more...

February 9, 2016

Mortgage Rate Trends: Moving Lower

By Joe Wallace

Monday saw mortgage loan rates moving lower–some sources are labeling it the “lowest in a year”, and industry pros are urging borrowers who are undecided to lock in a mortgage rate commitment with the lender due to this move. At the time of this writing, 30-year fixed rate conventional mortgages are in a best execution range with 3.625% at the low end–more lenders are reported as offering this best execution rate than those offering the same or similar on Friday. FHA mortgage loan rates are reported at a best execution rate of 3.5% depending on the lender, but if the downward trend continues we’ll likely see this comfort zone change. It’s entirely possible that the new, lower rate won’t last long unless the downward trend persists. As always, the rates | more...

January 29, 2016

FHA Announces New Insurance Rate Cuts For Multi-Family Loans

By Joe Wallace

The FHA has issued a press release announcing an insurance rate cut for FHA insured multi-family home loans. According to HUDNo.16-008, “In an effort to help preserve and increase the amount of affordable, quality rental housing across the country, the Federal Housing Administration (FHA) today announced a multifamily insurance rate reduction designed to encourage capital financing of affordable and energy-efficient apartments.” The rate reductions announced in the press release are scheduled to take effect on April 1, 2016, and according to the FHA officials site, “directly impact FHAs Multifamily Housing Programs and properties housing low- and moderate-income families and/or developments installing energy-efficient systems or building within federal energy guidelines.” The press release also adds, “U.S. Housing and Urban Development (HUD) Secretary Julin Castro made the announcement today during a visit | more...

January 26, 2016

FHA Condo Loans: Basics You Need To Know

By Joe Wallace

FHA loans for condo projects are possible according to the FHA official site, but the condo unit you want to purchase must be on, or added to, the FHA approved condo project list. There’s a very good reason why FHA requires a condo project to be approved–some condo projects have restrictions that are not permitted under FHA rules–such as any agreement that restricts the borrower’s ability to occupy the property once purchased, or freely dispose or sell the property as the borrower sees fit. What does the FHA official site have to say about condo loans in general? “Section 203 (b) of the National Housing Act provides authority to insure any mortgage covering a one-family unit in a project coupled with an undivided interest in the common areas and facilities | more...

January 15, 2016

HUD Housing Report: Rising Equity, Fewer Homeowners “Underwater”

By Joe Wallace

The Department of Housing and Urban Development (HUD) has issued a housing market report on its official site–“Measuring Progress in the Housing Market” examines the state of the market near the end of the old year and noted that equity is rising, while the number of homeowners still underwater in the wake of the Great Recession is going down. “As 2015 came to a close, we saw our housing market reach key milestones on the path to recovery homeowners equity rose again, the number of homeowners in negative equity continues to decline, and purchases of new homes increased. Its clear that we must continue to support programs that will allow more American families and homeowners to recover from the Great Recession.” HUD offers this report as a regular feature of | more...

January 15, 2016

HUD Charges Three Foreclosure Rescue Companies With Fraud, Discrimination

By Joe Wallace

HUD is bringing charges against three California foreclosure relief/loan modification companies according to a press release issued on the HUD official site. According to HUDNo.16-002, the agency is bringing charges against, “…three Modesto, California, home loan modification companies and nine of their agents with violating the Fair Housing Act by targeting Hispanic homeowners” for their national origin. As mentioned in the press release, laws passed as part of the Fair Housing Act prohibit discrimination in housing transactions (to include rental properties, public housing, and mortgage loans” because of national origin. “Families struggling to stay in their homes need real help, not false promises that make a bad situation worse,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity, who was quoted in the press release. He adds, | more...

What happens to my FHA loan in a natural disaster?

January 11, 2016

FHA Home Loan Appraisals: Some Basics

By Joe Wallace

In 2015, the FHA and HUD published HUD 4000.1, a new and comprehensive rulebook for FHA single family mortgage loans. This new set of rules updated, revised, expanded, and restated FHA single family mortgage loan policies. One area critical to the entire home buying process with an FHA mortgage is the appraisal process, so we are examining this process as described in HUD 4000.1 to give you a better idea of FHA/HUD policy as it now stands with the new rules. HUD 4000.1 begins by defining its terms. The rules say the FHA appraiser is responsible for insuring a home to be purchased or refinanced (where an appraisal is required to refinance) meets FHA/HUD standards–Minimum Property Requirements (MPRs) and Minimum Property Standards (MPS). “The Appraiser must observe, analyze and report | more...

January 11, 2016

Mortgage Rate Trends: Lower In Spite Of Jobs Report

By Joe Wallace

On Friday, mortgage rates moved lower in spite of a scheduled economic data release (Friday’s jobs report) that showed a more robust job market. That news has in the past had the power to negatively affect mortgage loan rates–good economic news often comes out to the detriment of mortgage rates depending on investor reaction to that data. On Friday rates moved lower due to other economic factors including market woes in China and declining oil prices. Investor behavior in reaction to those factors had more of an influence on Friday than the jobs report. That’s not unusual in the grand scheme of things. Much depends on what factors hold investor attention on a given day. On Friday the jobs report was not (but easily could have been) the main event | more...

January 6, 2016

HUD 4000.1 On Self Employment Income For FHA Home Loans

By Joe Wallace

HUD 4000.1 has rules that govern the procedures a participating FHA lender must use to verify the income of a self employed borrower or owner of a family business. The fact that an FHA mortgage loan applicant is self-employed is not a barrier to loan approval, but there are different requirements for those who own a family business or who are considered self employed. HUD 4000.1 has instructions for the lender in these cases, beginning with a definition of who is affected by these rules: “Self-Employment Income refers to income generated by a business in which the Borrower has a 25 percent or greater ownership interest. There are four basic types of business structures. They include: –sole proprietorships; –corporations; –limited liability or S corporations; and –partnerships.” How does a lender | more...

January 6, 2016

FHA Home Loan Rules For Employment: Seasonal Work, Family Businesses

By Joe Wallace

In our last blog post we discussed FHA loan rules for employment/income verification for salary, hourly, and part time work. FHA loan rules published in HUD 4000.1 also cover other aspects of income from sources such as family businesses and seasonal work. It might be easy to assume that because a borrower does work that does not last the entire year due to its seasonal nature that a lender might dismiss it–but FHA loan rules anticipate this type of income too, and have specific requirements for lenders to use when considering it for the purposes of a debt-to-income ratio calculation for an FHA mortgage. For seasonal work, FHA loan rules in HUD 4000.1 define the income as follows: “Seasonal Employment refers to employment that is not year round, regardless of | more...