Articles Tagged With: FHA Loan Limits

April 30, 2013

FHA Loan Answers: How Long Is An FHA Loan?

One common FHA loan question is fairly simple and straightforward; how long can an FHA loan be? In general, FHA loans are available for 15 or 30 year terms. FHA loan rules as spelled out in HUD 4155.1 state that there is a maximum loan term–one that depends on the type of transaction and other factors. “The maximum mortgage term may not exceed 30 years from the date that amortization begins. In the case of adjustable rate mortgages (ARMs), the term must be for 30 years. FHA does not require that loan terms be in five year multiples.” FHA loan rules add, “Some programs require a shorter term, including certain streamline refinances made without appraisals.” For FHA Streamline Refinances made without an appraisal, FHA loan rules state, “The streamline refinance | more...

April 23, 2013

FHA Credit Report Rules

By Joe Wallace

When you apply for an FHA loan, your loan application will include forms you sign to give your loan officer permission to pull your credit reports, check your employment history and other items that are required in order to approve your VA home loan. But what are the rules for the lender when pulling your credit reports? What is the loan officer obligated to review and how is the process regulated? FHA loan rules, as printed in HUD 4155.1, give the lender a long set of instructions when it comes to accessing credit data. For starters, the lender can only accept credit report information directly from the credit agencies. It cannot come from any third party including the borrower. Additionally, HUD 4155.1 Chapter One Section Five states, “A credit report | more...

April 17, 2013

FHA Refinance Loans, Disaster Assistance, and Loan Forbearance

By Joe Wallace

The FHA has updated its disaster relief policies to help those recovering from the effects of Hurricane Sandy, but also natural disasters in a federally declared disaster area in general. One area that hasn’t gotten much attention until now is the FHA policy on refinance loans in such cases. What assistance is there for someone with an FHA insured refinance loan who is struggling in a federal disaster area? According to the new FHA mortgagee letter, 13-11, “In accordance with HUD Handbook 4155.1, Mortgage Credit Analysis for Mortgage Insurance One- to Four-Unit Mortgage Loans, for the purpose of determining the acceptability of the borrower’s payment history for any FHA refinance, when a borrower has withheld mortgage payments pursuant to either a Formal or Informal Forbearance drafted under this Mortgagee Letter, | more...

April 16, 2013

Coldwell Banker Settles In HUD Housing Discrimination Claim

By Joe Wallace

A press release on the FHA/HUD official site announced the recent settlement of a housing discrimination claim involving Coldwell Banker. According to HUDNo.13-051B, ” The U.S. Department of Housing and Urban Development (HUD) announced today a $90,000 Conciliation Agreement with Coldwell Banker Residential Brokerage and the seller of a home in Worcester, Massachusetts, settling allegations they violated the Fair Housing Act by preventing the sale of a house to be used as a group home for persons with disabilities.” Fair Housing Act laws forbid discrimination in both rental procedures and property sales–including discriminatory standards or requirements based on disability. In this particular case, the requirements included a housing covenant that prevented the property from being used as a group home for disabled persons. “HUD is committed to promoting housing opportunities | more...

April 15, 2013

FHA Loan Answers: FHA Loan Applications, Separation, and Divorce

By Joe Wallace

A reader asks, “I’m married, the current home is FHA loan under my husbands name only….can i buy a home for 120,000 under FHA to live in? If so, will they count my husbands debts against me getting the loan? We have agreed to live separate, stay married though, do they require legal separation?” This question doesn’t have a one-size-fits-all answer for one very important reason. FHA loan rules go hand-in-hand with state community property laws. What does this mean? If a borrower is divorced, separated, or still legally married in a community property state, each spouse may be liable for all debts incurred during the marriage. In such cases, the FHA lender may be required to include both spouses on the FHA mortgage, run credit checks, etc. on both | more...

April 4, 2013

FHA Loan Refinance Credit Rules: A Reader Question

By Joe Wallace

A reader asks, “I am trying to refinance my FHA loan with my current lender. I was refused they said, because my credit score is too low. I thought this did not matter? I thought the FHA STREAMLINE was intended for situations like ours.” “I have never been late or missed a payment in 4.5 years. My husband is doing well now and we are trying to get back to normal. Does the credit score count against you or not on the FHA streamline? And do the banks have a right to refuse the streamline if you are eligible?” There are several factors that must be considered when looking at a question like this. It’s true that FHA Streamline loans have no FHA requirement for credit underwriting which would include | more...

March 21, 2013

FHA Loan Answers: Child Support and Debt-To-Income Ratios

By Joe Wallace

A reader asks, “What about Child Support? My mortgage broker said that if it doesn’t come up on credit report it will not count as a deduction. However it does reflect on my paycheck every 2 weeks. My question is this considered a voluntary deduction at that point or was I misinformed?” FHA loan rules require a borrower’s debt-to-income ratio to be within certain limits in order to qualify for an FHA home loan, and while it’s true that FHA rules do take compensating factors into account, the amount the borrower is obligated to pay every month before the mortgage amount is important. What do the rules say about debt such as child support, alimony, etc.? The FHA official site says, “Most recurring obligations, including child support and alimony are | more...

February 25, 2013

FHA Loans, Prepayments and Due-On-Sale Clauses

By Joe Wallace

When shopping for a home, some borrowers come into the house hunt with a strategy that includes paying or pre-paying a chunk of the mortgage loan up front. This isn’ necessarily a down payment per se, but it is something to consider when setting a budget for a home loan and the anticipated mortgage loan payments. Does the FHA allow such a strategy? Can borrowers pay down the loan principal? FHA home loans do feature the ability to pre-pay a portion of the loan. This can be helpful for many reasons including lowering mortgage payments and saving money over the lifetime of the loan by reducing the principal and the amount of interest paid on that principal. According to HUD 4155.2 Chapter Three, Section A, “A borrower may prepay a | more...

February 20, 2013

FHA Loans and Closing Costs–What You Should Know

By Joe Wallace

FHA loans require a minimum down payment, but those funds are not the only money needed at closing time. Borrowers should know and budget for a variety of expenses that are due on or before closing time. That’s one reason why finance experts recommend taking a year or more to prepare for any type of home loan–saving for these expenses can make things financially easier once the home buying process begins. But what are the costs and expenses a borrower will need to close the deal? Fortunately the FHA loan rulebook spells out the items needed at closing time–these must be paid for on or before the deal closes. The FHA Loan rulebook, HUD 4144.1, says, “In addition to the minimum downpayment requirement described in HUD 4155.1 5.B.1.a, additional borrower | more...

February 14, 2013

FHA Proposes Down Payment Changes For Larger FHA Loans

By Joe Wallace

The FHA is considering changes to the maximum LTV and down payment rules for certain FHA mortgages (described by the FHA as those “in excess of $625,500”) according to the FHA official site. According to HUDNo.13-010, “FHA will announce a proposed increased down payment requirement for mortgages with original principal balances above $625,500. The minimum down payment for these mortgages will increase from 3.5 to 5 percent.” “This change, coupled with the statutory maximum premiums charged for these loans, will help protect FHA and further facilitate its efforts to encourage higher levels of private market participation in the housing finance market.” In a statement published in the Federal Register Volume 78, Number 25, you’ll find some supplemental information including the following: “…the maximum LTV will be limited to 95 percent | more...