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Articles Tagged With: FHA Loan Application

June 13, 2012

FHA Loan Reader Questions: Can I Buy Another Home With An FHA Mortgage Loan?

By Joe Wallace

A reader asks, “We purchased our first home using an FHA loan – 5% down. We have outgrown our home due to an expanded family and we are looking to purchase another home that is bigger – is it possible to qualify for another FHA loan – we have at most 10% to put down towards a new home. Our plan would be to rent out this current home we have as it is in a good rental area. Any advice on how we can achieve this?” FHA loan rules, according to the official site at FHA.gov, include a restriction on issuing single-family mortgage loans to investors. Due to this restriction, the official site says, “FHA generally will not insure more than one mortgage for any borrower (transactions in which | more...

 

June 7, 2012

FHA Loans: Can Non-Taxable Income Be Used To Qualify For an FHA Home Loan?

By Joe Wallace

FHA loan rules require the lender to verify income sources listed on an FHA home loan application. Only income that the lender deems stable, reliable, and likely to continue can be used to qualify for the loan. Because of this, the FHA loan program has rules covering different types of income and what may or may not be used to qualify for the loan. Income that does qualify is used to calculate the borrower’s debt-to-income ratio–a critical part of the loan approval process. Too much debt and not enough income, and a borrower could face being rejected for the FHA mortgage. One area some borrowers have concerns with is the income from non-taxable sources such as Social Security payments, military allowances, government benefits and other sources. These income sources, when | more...

 

June 6, 2012

FHA Loans and Government Assistance Payments–Do They Count As Verifiable Income?

By Joe Wallace

One frequently asked questions about FHA home loans involves government benefits and/or government assistance payments. Can these income sources be used for the purpose of getting an FHA guaranteed home loan? Under the right circumstances, the answer is yes. It’s not automatic–the lender must verify the source of the income and also determine how long that income will last. According to HUD 4155.1 Chapter 4 Section E, “Income received from government assistance programs is acceptable for qualifying, as long as the paying agency provides documentation indicating that the income is expected to continue for at least three years.” Borrowers aren’t simply out of luck if that income will not last for three years; it can’t be used as income, but it can be considered in other ways according to the | more...

 

May 29, 2012

FHA Loan Reader Questions: Unsettled Credit Report Details

By Joe Wallace

A reader asks, “There are two old debts from 2003 that I have not been able to verify on my credit report. The total of this is $520, the underwriter on the mortgage has been relentless about this debt. I will not pay for something that do not know what it is for. Does this affect my FHA loan?” Reader questions like these come in quite often. Some of them seem to be asking whether the FHA has a rule that gets around a lender’s insistence on a specific issue connected with the FHA loan; a requirement such as a minimum waiting period following a bankruptcy proceeding or the example cited in the reader’s question here. Do FHA loan rules trump the financial institution’s policies in such cases? Can the | more...

 

May 18, 2012

HUD Studies Reveal Important Benefits Associated With Housing Counseling

By Joe Wallace

A press release from the Department of Housing and Urban Development says FHA/HUD approved housing counseling offers significant benefits “for families who purchase their first homes and those struggling to prevent foreclosure”. Those benefits were the focus of two HUD research projects. According to HUDNo.12-085, ” HUD found housing counseling significantly improved the likelihood homeowners remained in their homes” . That finding comes from two housing counseling research projects, one that involved pre-purchase counseling and one focusing on foreclosure avoidance counseling by HUD-approved agencies. “Both the pre-purchase counseling and foreclosure counseling studies enrolled clients in the fall of 2009 and early 2010. HUD found that 35 percent of participants became homeowners within 18 months of pre-purchase counseling and only one of those buyers subsequently fell behind in their mortgage payments.” | more...

 

May 16, 2012

FHA Loan Reader Questions: Loan Approval For Self Employed Borrowers

By Joe Wallace

A reader asks, “Is it true that FHA will not approve a loan if you have only been self-employed at your current business for 1 1/2 years? Applied for an FHA loan, was self-employed in a retail business for 5 years, sold my interest in the business and opened another retail business. My newest business has been open 1 1/2 years. Can I still get financed (credit score and debt to income ratio is excellent)?” The FHA loan rules are clear about minimum employment times in general–there are no minimum requirements for the amount of time spent on any one job. According to HUD 4155.1, Chapter , Section D; “To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held | more...

 

May 7, 2012

Questions and Answers on FHA Condo Loans

By Joe Wallace

FHA home loans include loans for condos, but since condominiums have unique arrangements that can be much different than a traditional suburban home, there are additional rules that govern FHA condo loans. Here’s a list of commonly asked questions about FHA condo loans, and the answers to those questions. Is FHA condo project approval required for an FHA condo loan? Yes.

 

May 2, 2012

FHA Appraisals: Who Is Responsible For Appraisal Quality?

By Joe Wallace

One question about FHA home loans doesn’t usually come up unless someone in the FHA loan process is dissatisfied with the appraisal, but it’s a question asked often enough to be included in the FHA/HUD list of the most frequently asked questions: Who is responsible for the quality of an FHA appraisal? According to the FHA FAQ, “The lender is held responsible, equally with the appraiser, for the integrity, accuracy and thoroughness of an appraisal submitted to FHA for mortgage insurance purposes. FHA may pursue appropriate enforcement actions against both or either party for violations.” In Mortgagee Letter 2009-41, The FHA also says, “FHA requires that all appraisers performing appraisals of properties that will be security for FHA-insured financing be knowledgeable of FHA appraisal reporting requirements…” and, “Appraisals performed for | more...