Articles Tagged With: FHA Loan Application

February 1, 2012

FHA Announces New Fair Housing Rules

Nearly 30 percent of same-sex couples were treated differently when trying to buy or rent a home. That figure was published in a 2007 report by Michigan’s Fair Housing Centers. FHA and HUD have announced new regulations designed to end that sort of discrimination and much more. According to HUDNo.12-014, new regulations have been implemented to “ensure that HUD’s core housing programs are open to all eligible persons, regardless of sexual orientation or gender identity” according to the press release.

January 24, 2012

FHA Loan Rules: Proposed Seller Concession Changes

By Joe Wallace

When a house hunter wants to buy a home with an FHA insured mortgage, he or she may find a seller willing to offer incentives–known as seller concessions–to make the deal more attractive. Seller concessions can include interest rate buydowns, discount points or other contributions that are related to closing costs. At the time of this writing, FHA loan rules state that these concessions can total no more than six percent of the sales price. Any more than six percent is considered an inducement to purchase the property and the FHA requires an adjustment in the loan amount. According to the FHA official site, “Each dollar exceeding FHA

January 23, 2012

FHA Loans Reader Question: Chapter 7 Bankruptcy

By Joe Wallace

There have been many reader questions in the last six months about bankruptcy, foreclosure, and the required waiting period for new FHA home loans after these procedures. One reader asks, “When does the waiting period began per FHA Guidelines? If you included a conventional loan in a Chapter 7 bankruptcy, does the waiting period began at the discharge date? Or does the waiting period began at the trustee sale?” The short answer is that after Chapter 7 bankruptcy, the borrower must wait out the minimum “seasoning” period plus any additional amount required by the lender–three years in many cases though some lenders may be willing to work with qualified borrowers after the FHA two-year minimum for Chapter 7. This waiting period begins from the time the bankruptcy is discharged. Since | more...

January 20, 2012

FHA Loan Reader Question: Why Was I Denied an FHA Home Loan?

By Joe Wallace

Many readers write in with questions similar to the one we received this week, which includes the following: “I am recently divorced. While married, went through two bankruptcies (both discharged) have/had issues with back taxes (installment plans made and determined to be paid in full by ex per divorce decree). Have moved to another state, working (1.5 years), full time student. Was living with children, have moved into an apartment paying $600.00 per month (comfortably), because I could not get qualified for a loan. Have two major credit cards (visa/master credit cards not debts) established in my name for 1.9 years, never late, never over limit. Credit score is 620. Is there a main reason why, I did not or cannot be approved for a FHA loan?” Before addressing an | more...

January 19, 2012

FHA Loan Reader Question: FHA Loans and Credit History

By Joe Wallace

Sometimes, shopping around for a participating FHA lender is a bit more complex that you might think. There are basic issues related to competitive interest rates, getting the most favorable terms, even the simple chemistry between the borrower and the bank can be an issue. But what about situations where the borrower feels the lender hasn’t quite done right in terms of customer service? One reader left this comment; “I owned my home for 12 years (FHA loan) and sold it December 2010. I am now told that I have NO CREDIT SCORE!!! I paid cash for car and have no credit cards. I

January 17, 2012

FHA Loan Reader Question: Do I Qualify For an FHA Mortgage?

By Joe Wallace

FHA loans have minimum credit standards which include requirements for timely bill paying, dependable work history and other factors that can affect an FHA mortgage application. But FHA rules are designed to be flexible depending on a borrower’s circumstances. In general the FHA rules tend to be more forgiving when borrowers can show that financial difficulties were beyond the borrower’s control and have been resolved successfully. With that in mind, we turn to a recent question from one of our readers: “I am looking to buy, my current residence from a family member.

January 11, 2012

FHA Loan Limits: Family Member Purchases

By Joe Wallace

Recently we posted about FHA loan limits and something called “identity of interest” transactions, which the FHA official site describes as “a sale between parties with family or business relationships.” For example, if a business partner wanted to sell property to a fellow partner, that could constitute an “identity of interest” transaction. The same would be true of family members selling to other family members. According to FHA loan rules, the “maximum loan-to-value (LTV) factor for identity-of-interest transactions on principal residences is restricted to 85%.” That means the borrower would be approved for the FHA home loan, but only for 85% of the value of the property. Fortunately for many borrowers, the FHA has exceptions to this 85% rule. “Financing above the 85% maximum for identity-of-interest transactions is permitted under | more...

January 10, 2012

FHA Home Loan Interest Rates

By Joe Wallace

The FHA loan rulebook provides lenders with a set of guidelines and requirements for FHA loans. One important section of those rules, as found in HUDdoc 4155.1, has to do with interest rates and something called interest rate lock-in periods. The government does not set the interest rates for FHA loans. According to the FHA loan rules, “Under all currently active FHA single family mortgage insurance programs, the borrower and the lender negotiate the interest rate and any discount points.” But the fact that those rates and points are negotiable does not mean interest rates are not regulated by FHA loan rules–once those rates are agreed upon, the lender must abide by the rules for the FHA loan program. For example, the amount of time the lender is bound to | more...

January 3, 2012

Reader Question: Qualifying For an FHA Home Loan

By Joe Wallace

We get plenty of reader questions in the FHANewsBlog.com comment section, which we’re always happy to answer as best we can. One of the most recent questions was about basic qualifications for an FHA guaranteed loan: “My girlfriend and I have lived together for about 9 and a half yrs in a rural area 15824 of Penn…She has a low paying job as a waitress but, has worked there since she graduated high school. Ive been at my current position for a little under a year and make a little more than she does.” “The only debt we have is my school loan. I do not know my current credit score and she has good credit. I feel that as a couple we might be able to afford a home | more...

December 30, 2011

FHA Loans, Verifiable Income and Alimony/Child Support

By Joe Wallace

When a borrower applies for an FHA insured home loan, part of the qualifying process includes having all sources of income reviewed and verified. Some income can’t be used for purposes of qualifying for an FHA mortgage–usually anything which is not steady, reliable, and likely to continue can’t be claimed. By the same standards, some types of income are not required to be listed, but if they are not listed and verified that source of income can’t be considered for the purposes of qualifying for the FHA mortgage. Alimony, child support, and maintenance income falls into this category. If a borrower chooses not to list that type of income, it’s his or her choice–but the income must be listed and verified in order to be used to qualify for the | more...