Articles Tagged With: FHA Home Loans

December 29, 2015

FHA Appraisals And The Cost Of Appraiser-Directed Repairs

When it’s time for the FHA appraisal to happen, a borrower may be understandably nervous about the outcome of the appraisal. What happens if the appraiser finds areas that must be corrected or repaired? In many cases those corrections or repairs are directed as a condition of loan approval. In some instances (which would be handled on a case-by-case basis) the repairs may also require a compliance inspection which the borrower would have to pay for. When repairs or corrections are required, can the borrower request that the cost of making those repairs be added to the home loan? According to HUD 4000.1, “A Mortgagee may add repair costs to the sales price before calculating the mortgage amount if: –the repairs are required by the Appraiser to meet HUDs Minimum | more...

December 8, 2015

FHA Home Loans For Existing Properties: Weatherization

By Joe Wallace

Did you know that in certain cases, FHA single-family home loan rules in HUD 4000.1 permit the borrower to add funds to weatherize an existing construction home being purchased with an FHA mortgage? According to HUD 4000.1: “The weatherization product permits the Borrower to finance the cost of eligible energy-related weatherization improvements, in conjunction with a purchase or refinance.” This is separate from an FHA Energy Efficient Mortgage (EEM) though that can also be included in the loan for qualified borrowers. From HUD 4000.1: “Weatherization improvements may be financed in conjunction with the following: –Section 203(b) purchase transaction (or) no cash-out refinance transaction –Section 203(h) Mortgage Insurance for Disaster Victims –Energy Efficient Mortgages (EEM)” The loan rules for this type of FHA mortgage or refinance includes a list of eligible | more...

December 7, 2015

FHA Refinance Loans: A Checklist

By Joe Wallace

Are you thinking about refinancing your home loan? There are many things you will want to consider in the planning stages that can help speed you to the application stage of your new loan. Here are some basics you should consider when saving and planning to refinance: The Type of Refinancing You Need Are you searching for a Streamline Refinance for your existing FHA mortgage loan? Or so you need to refinance from a conventional or other non-FHA mortgage into an FHA home loan? Do you want cash out? Or do you just need lower payments? All these factors are important to consider when choosing the FHA loan product that is right for you. An FHA Streamline has different rules and requirements than an FHA Cash-Out Refinancing loan. Know the | more...

December 2, 2015

HUD 4000.1 On FHA Loan Limits

By Joe Wallace

Ever since the FHA and HUD updated FHA single-family home loan rules previously found in HUD 4155.1 and HUD 4155.2, we’ve been examining critical areas of the new FHA loan rulebook. One such area involves calculating the maximum FHA loan guarantee limit. FHA issues new guidelines for FHA mortgage loan limits each year, but what does HUD 4000.1 say about this process? “The National Housing Act establishes the maximum Mortgage limits and the mortgage amounts for all FHA mortgage insurance programs…Mortgage limits are calculated based on the median house prices in accordance with the statute. FHAs Single Family mortgage limits are set by Metropolitan Statistical Area and county and will be published periodically.” Furthermore, “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the | more...

November 25, 2015

Mortgage Loan Interest Rate Trends: Holding Steady After Some Upwards Movement

By Joe Wallace

Monday say mortgage rates moving slightly higher, while on Tuesday rates held steady. There’s some market volatility this week for reasons that include the Thanksgiving holiday–rates may well move into a defensive posture on Wednesday in anticipation of the down day on Thursday. Add to that the uncertainty over a Fed interest rate hike in December and you have a combination of factors that equals a risky time to float, at least in the minds of some industry pros. 30-year fixed rate conventional mortgages are, at the time of this writing, between 4.0% and 4.125% depending on the lender (best execution). The rate changes we’ve seen this week so far may be reflected in closing costs rather than an actual higher interest rate, so borrowers should know that when they | more...

What you should know about FHA 203(h) Loans For Disaster Victims

November 18, 2015

FHA Appraisal Rules In HUD 4000.1: The Living Unit, Structural Conditions

By Joe Wallace

The FHA loan rules for minimum property standards in HUD 4000.1 include a section describing general requirements for “the living unit”. These instructions would be considered by the appraiser in addition to, but in replacement of, state and/or local building code. According to HUD 4000.1, “The Mortgagee must confirm that each living unit contains: –a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses; –sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, at a minimum, a water closet, lavatory, and a bathtub or shower; –adequate space for healthful and comfortable living conditions; heating adequate for healthful and comfortable living conditions; –domestic hot water; and –electricity adequate | more...

November 17, 2015

FHA Loan Minimum Property Standards In HUD 4000.1

By Joe Wallace

The FHA home loan rules published in HUD 4000.1 include a set of minimum property standards that a home purchased with an FHA mortgage must live up to. The FHA appraisal is the process used to determine whether a property meets these minimum standards, also known as MPRs (Minimum Property Requirements) and MPS (Minimum Property Standards). According the HUD 4000.1: “As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUDs Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). Minimum Property Requirements refer to general requirements that all homes insured by FHA be safe, sound, and secure.” HUD 4000.1 defines MPS as, “regulatory requirements relating to the safety, soundness and security of New Construction. When examination of | more...

November 17, 2015

Mortgage Rate Trends: Slightly Lower On Monday

By Joe Wallace

Monday was the fourth day that mortgage loan rates didn’t move higher–and after six solid days previously of upward movement, that’s a welcome development. We’re seeing what appears to be a cautious, gradual move lower after that sustained upward pressure. How long that move lower might continue isn’t clear, but we are seeing rates move rather than simply maintain the previous day’s position. 30-year fixed rate conventional mortgage loans are closer to 4.0% (best execution) than they have been in many days. Some lenders may still be offering best execution rates closer to 4.125%, but if the downward trend persists we may see many more lenders headed towards the rock bottom end of the four percent range. FHA mortgage loan rates are still at 3.75%, best execution. You may see | more...

November 10, 2015

Mortgage Rate Trends: Highest Since Summer

By Joe Wallace

Monday say mortgage loan rates move higher for yet another day in a row, putting rates at their highest best-execution numbers since mid-summer. Much of the upward trend at present is blamed on Fed discussions of an interest rate hike, and it seems likely (at least according to our sources) that a December rate increase could be on the table. Any talk of rising rates at this point or indications that the Fed might be inclined to raise them could put more upward pressure on mortgage loan rates due to investor reaction to such news or indicators. Some of those indicators don’t come from the Fed directly, but from economic data releases the Fed is likely to take into consideration when it comes to the overall health of the economy | more...

November 5, 2015

More On FHA EEM Stretch Ratios And Home Energy Scores

By Joe Wallace

Recently we reported on the FHA’s coming rule modification for the Energy Efficient Mortgage program. For loans in 2016 with FHA case numbers assigned on or after January 25, 2016, homes with qualifying energy ratios could be eligible for increased “stretch ratios” as described below (reprinted from 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 benefit from an energy efficient home, FHA is adding a new threshold | more...