Articles Tagged With: FHA Loan Application

January 30, 2013

New Hampshire Real Estate Agency Settles Housing Discrimination Case

Those viewing FHA.gov will find a recent press release by HUD announcing a settlement in a New Hampshire housing discrimination case that many families looking for homes should definitely read. According to the press release HUDNo.13-009, Scott Walker and his company Premiere Real Estate, LLC, in Concord, New Hampshire, have agreed to pay $9,000, “to settle allegations that they refused to rent to families with children in violation of the Fair Housing Act.” The press release adds, “The days of ‘no children allowed’ are long over,” according to John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “For 25 years, the federal Fair Housing Act has guaranteed families with children the same rights to housing as those without children, and HUD will continue to take swift enforcement action | more...

January 23, 2013

FHA Loan Credit Requirements: A Reader Question

By Joe Wallace

A reader asks, “My wife’s uncle just passed away not to long ago and I want to keep his property in the family. I make very good money,but i only have a 590 credit score.How can I go about buying his property and keeping everything the way it always has been?” Without addressing the credit score issue, in general one good way to go about buying a home with an FHA home loan is to get pre-approved for a loan amount–fill out the online application at FHALoan.com (a private company, not a government agency) and work with the loan officer to get the property appraised. This process–pre-approval, appraisal, and etc.–is fairly typical for many borrowers. Credit scores are a separate issue. The FHA Loan program has minimum credit score requirements | more...

January 16, 2013

FHA Loan Rules For Applications: Your Tax Returns

By Joe Wallace

As part of the home loan application process for FHA insured mortgages, applicants are required to furnish a set of paperwork that includes tax documents. According to the FHA loan rulebook, HUD 4155.1, in a section titled “Federal Income Tax Returns”, the rules tell the lender to get the applicant’s: • federal income tax returns for the most recent two years, both individual and business, including all applicable schedules, for self-employed borrowers, and • individual federal tax returns for commissioned individuals. ” The phrase “all applicable schedules” refers to things like Schedule C and other forms required. If you don’t know what Schedule C is, you likely have not needed to file one. (It’s for borrowers who report business income or self-employment income. FHA loan rules also state that the | more...

January 9, 2013

FHA Loan Reader Questions: Can Another Homeowner Co-Sign My Loan?

By Joe Wallace

A reader asks, “Can my mother co-sign an FHA mortgage for me even if she has a veteran’s loan for her home? Will they use my credit, or just hers, or both? I am confused. My credit is not so good but she is willing to help so I don’t know…” FHA loans require credit, income and employment data on all parties financially obligated on the mortgage. What specifically does the FHA require from co-signers or co-borrowers? Here’s some information from the FHA official site, which states: “Co- borrowers take title to the property and are obligated on the mortgage note and must also sign the security instrument. The co-borrower’s income, assets, liabilities, and credit history are considered in determining creditworthiness.” Additionally, “Co-signers do not hold ownership interest in a | more...

January 2, 2013

FHA Loan Questions: Appraised Value Versus Buyer Offer

By Joe Wallace

Our very first reader question of 2013! A reader asks, “We had a property under-contract for sale at an attractive price in exchange for a 12/31 close…but they were unable to close. The property appraised at the sales price. Now we have an offer at a higher price…also using FHA financing. Will the previous lower appraised value be a problem for us?” Not to be deliberately vague, but it really depends on how you define “problem”. According to FHA loan rules, “The maximum mortgage amount that FHA will insure on a purchase is calculated by multiplying the appropriate loan-to-value (LTV) factor by the lesser of the property’s sales price, subject to certain required adjustments, or appraised value. In order for FHA to insure this maximum loan amount, the borrower must | more...

December 26, 2012

FHA Loan Applications: What Your Loan Officer Needs

By Joe Wallace

FHA loan applications are designed to give the lender the information needed to start the approval process. It’s true that a loan application can be lengthy–it’s a major line of credit, after all. What does the bank need from the borrower to move forward? The application is designed to help the lender obtain a range of details including: • general mortgage credit analysis documents • evidence of Social Security Number • verification of deposit • verification of employment (VOE) • federal income tax returns, and • appraisal documentation. That’s reprinted from the FHA loan rulebook for lenders, HUD 4155.1, which adds, “Lenders must obtain the most recent documents required to perform the mortgage credit analysis. “Most recent” refers to the most recent document available at the time the loan application | more...

December 17, 2012

FHA Loan Question: Minimum Property Requirements and “Old Wiring”

By Joe Wallace

A reader asks, “I’m looking to purchase a home though a loan from FHA. The home is old but only occupied by a single family, very nice condition in and out, but has old 100 amp wiring and has a old heating system. No problems with either. Will this affect the process of the purchase?” Questions like these are common, and before we answer it’s important to point out that the FHA itself does not lend money. It guarantees the home loan which is issued by a private lender. We only mention this because some reader questions are worded in such a way that it seems there may be a mistaken impression that FHA actually offers the loan money–it does not. With respect to this reader question, FHA loan rules | more...

December 14, 2012

FHA Home Loans: What The Lender Does With Your Application

By Joe Wallace

When it’s time to apply for an FHA home loan or get pre-approved for an FHA loan, there is paperwork that must be completed and submitted to the lender. This can be a bit time consuming and requires more detail than a typical credit card application or similar lines of credit. But what does the lender do with all that information? Why is the borrower required to submit so much detail for a home loan? It’s obvious that the size of the amount has a lot to do with that, but there are rules the lender must follow for these applications that adds to the paperwork reqiurements. According to the FHA official site, “The purpose of the mortgage credit analysis is to determine ? a borrower’s credit performance ? a | more...

December 10, 2012

How FHA Loan Limits Work

By Joe Wallace

Recently the FHA announced the new maximum loan limits for 2013. These limits are normally revised annually, but sometimes changes in the law may cause the limits to be recalculated depending on the new regulations put into place. The FHA limits published for 2013 are in effect for the entire calendar year from 1 January 2013 to 31 December 2013 unless otherwise changed by law. According to the FHA official site, maximum loan limits are developed as follows: “The statutory provisions of the National Housing Act establish the maximum loan limits and mortgage amounts for all FHA mortgage insurance programs. Maximum loan limits vary depending upon the • specific program under which a loan is insured • number of dwelling units in the property (one to four units), and • | more...

December 7, 2012

FHA Refinance Loan Options

By Joe Wallace

Recent news headlines related to “fiscal cliff” include warnings of possible tax hikes, a loss of (or cap on) mortgage loan interest rate tax breaks and other bad-news type possibilities. Those headlines make some homeowners seriously think about refinancing their FHA mortgages–getting into lower interest rates and/or lower payments to offset the higher costs of owning a home should the fiscal cliff issue enter a worst-case scenario. While no homeowner should rush into such a decision, those who are ready to commit should know their FHA refinance loan options. According to the FHA official site, borrowers with FHA or conventional home loans have the following choices as described in HUD 4155.1 Chapter Three: “FHA insures several different types of refinance transactions, including –Streamline refinances of existing FHA-insured mortgages made with | more...