Articles Tagged With: FHA Loan Application

December 5, 2012

New Hampshire Gets FHA/HUD Hurricane Sandy Relief

New Hampshire is the latest state to receive FHA/HUD relief in the wake of Hurricane Sandy. On Monday, December 3 2012, the FHA and HUD issued a press release announcing foreclosure relief, FHA loans and refinancing plus other help for those recovering from storm damage. According to HUDNo.12-184, “U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to the State of New Hampshire in addition to resources being provided by FEMA and other federal partners. HUD will provide support to homeowners and low-income renters forced from their homes due to Hurricane Sandy.” Some may wonder why at takes time for all areas to get such disaster assistance from the FHA and HUD. The answer is simple–these benefits become available once an affected region | more...

November 30, 2012

FHA Foreclosure Protection, Home Loans and Refinancing For West Virginia Storm Victims

By Joe Wallace

The FHA and HUD have issued yet another Hurricane Sandy press release, this time announcing assistance for home owners in West Virginia affected by Hurricane Sandy. According to HUDNo.12-181, U.S. Housing and Urban Development Secretary Shaun Donovan has announced that FHA/HUD will “speed federal disaster assistance to the State of West Virginia in addition to resources being provided by FEMA and other federal partners. HUD will provide support to homeowners and low-income renters forced from their homes due to Hurricane Sandy.” On Wednesday November 28, 2012, President Obama issued a disaster declaration for the following West Virginia counties: Barbour, Boone, Braxton, Clay, Fayette, Kanawha, Lewis, Nicholas, Pendleton, Pocahontas, Preston, Raleigh, Randolph, Taylor, Tucker, Upshur, Webster, and Wyoming. This federal disaster zone declaration allows HUD to offer foreclosure relief and other | more...

November 19, 2012

Minimum Property Requirements: FHA Loan Reader Questions

By Joe Wallace

A reader asks, “I have an appraisal prepared by FHA approved appraiser. This is a short sale and appraiser has made comment that carpet in master bedroom has been removed and has bare concrete floors.” “Yet does not pose a health hazard. She has done the appraisal “As Is” but stated floor covering is required. Question is does FHA accept the floor to be painted with a sealer. Borrower does not want to put carpet in until the property is in their name. Seller will not do anything as it is a short sale. Thanks.” FHA mortgagee letters have in the past indicated that “exposed sub-flooring” or missing carpet can be grounds for issuing a correction. In this question the reader states that the missing carpet does not pose a | more...

November 13, 2012

FHA Loan Credit Scores: A Reader Question

By Joe Wallace

A reader asks, “I want to buy a home. I am renting a house that cost me $ 1300.00 plus lights and water bill. I filed bankruptcy almost 3 years ago and my credit score is bad. I am working at the same place for almost 7 years for about 42,000.00 yearly. Could I get a FHA loan to buy a house?” FHA loan rules, as described in HUD 4155.1 Chapter Four, explains what (from a lender’s point of view) is required when applying for an FHA home loan. Under the section of Chapter Four titled, “Hierarchy of Credit Review” we learn that FHA requires the lender to take several issues into account when evaluating credit: “Evaluating credit involves reviewing payment histories in the following order: first: previous housing expenses, | more...

November 7, 2012

FHA Loan Rules For Flood and Hazard Insurance

By Joe Wallace

In the wake of Hurricane Sandy, it seems like a good time to review a recent FHA Mortgagee Letter which addresses issues regarding hazard and flood insurance payments. While not all FHA borrowers may be affected by either storm damage or the rules in this FHA mortgagee letter, those that are affected should know the latest FHA guidance. FHA mortgagee letter 2012-19, titled “Hazard and Flood Insurance Requirement Reminder” reminds lenders about the Department of Housing and Urban Development’s “existing servicing procedures as they pertain to releasing hazard insurance proceeds for damaged properties securing Federal Housing Administration (FHA) insured mortgage loans.” According to the letter, the FHA “standard mortgage document” requires that the mortgagee–the lender–is named as a “Loss Payee” on the hazard insurance policy issued in connection with an | more...

October 31, 2012

FHA Energy Efficient Mortgages: Is Escrow Required?

By Joe Wallace

When learning abo0ut FHA home loans, escrow is one issue some borrowers have questions about. The FHA frequently asked questions pages include the following about escrow, which is governed by something called the Real Estate Settlement Procedures Act or RESPA: “Does RESPA require borrowers to maintain an escrow account? NO. It is the lender’s decision whether the borrower must maintain an escrow account for the purpose of paying taxes and other items. The HUD regulations only limit the maximum amount that a lender can require a borrower to maintain in an account.” That Q&A from the FHA official site seems to indicate that the FHA does not require escrow; indeed, it is the lender’s choice to require escrow or not. But are there situations where an escrow account may actually | more...

October 26, 2012

Are You Eligible For an FHA Mortgage?

By Joe Wallace

FHA loans are sometimes misunderstood–some people think FHA mortgages are only for low-income families, others wrongly assume only first-time home buyers can qualify for an FHA loan. The FHA does provide a list of guidelines that list who is eligible–and who is not–to apply for an FHA mortgage or refinance. The FHA loan rules include guidelines on credit scores and minimum age–which we discuss below. The rulebook that describes these things is called HUD 4155.1. In this guideline you’ll find the following: “FHA insures mortgages made to individuals with valid Social Security numbers (SSN), and under the conditions described in this section, to state and local government agencies, and approved nonprofit organizations. Note: Employees of the World Bank, foreign embassies, etc., may not be required to have an SSN. Conclusive | more...

October 25, 2012

FHA Loan Reader Question: What Does “Endorsed” Mean?

By Joe Wallace

A reader asks, “Can you please explain what “endorsed” means? I started my FHA streamline refi process March 11, 2009 through Countrywide. In the meantime BoA purchased Countrywide and the refi wasn’t finalized until June 29, 2009. Its not my fault the process took so long, and I sincerely hope I am not losing out on a refi or decrease PMI because of their delays!” This reader question most likely refers to FHA mortgagee letter HUDNo.12-045, which includes the following information about FHA Streamline Refinancing: “…Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA

October 24, 2012

FHA Loan Eligibility

By Joe Wallace

When a borrower applies for an FHA guaranteed mortgage, the lender is required to determine whether the borrower is a good risk by examining credit rating, the applicant’s debt-to-income ratio, and employment. But the lender also has some other checking to do. FHA loan rules state, “To determine whether a borrower is eligible to participate in an FHA mortgage loan transaction or must be rejected, the lender must: examine HUD’s LDP list, the GSA List and CAIVRS, and document the reviews on the HUD-92900-LT, FHA Loan Underwriting and Transmittal Summary.” What do all those abbreviations mean? “LDP” stands for “Limited Denial of Participation”. GSA is short for “U.S. General Services Administration List of Parties Excluded from Federal Procurement or Non-procurement Programs”. The acronym “CAVIRS” refers to “HUD’s Credit Alert Interactive | more...

October 23, 2012

FHA Loan Reader Questions: Bankruptcy and Foreclosure

By Joe Wallace

A reader asks, “My bankruptcy has been discharged for 3 years but the house has not been foreclosed on yet. Can I get an FHA loan?” There are several unanswered questions here that don’t allow a definitive answer. The nature of the bankruptcy (Chapter 7 or Chapter 14) plays a part in the answer. Is the house in foreclosure now? More information is needed to provide a clear answer. In general, FHA loan rules do require a “seasoning period” for bankruptcy and foreclosure. A home that is currently in foreclosure will likely interfere with a borrower’s attempts to get a new home loan of any kind. A home purchased with a government-backed loan that has been foreclosed upon may result in the borrower being indebted to the government. VA loans, | more...