Articles Tagged With: FHA Loan News

December 8, 2015

FHA Mortgage Loans and Home Inspections

When you buy a home with an FHA mortgage, there is a process known as a appraisal that must happen prior to loan approval. An FHA appraisal involves a professional who reviews the property to insure it meets FHA minimum standards for safety, economic viability, and livability. Some mistake the FHA appraisal process for a home inspection, but the FHA and HUD are quick to point out that the appraisal is NOT a complete, top-to-bottom review of the home. We get comments and questions about this process in our comments section, and many of them have a familiar theme. Consider this recent reader comment: “…it boggles my mind how I could have bought my home 5 short months ago with an FHA loan and found out that it was infested | more...

December 7, 2015

Mortgage Rate Trends: Sharply Higher, Then Lower

By Joe Wallace

On Thursday, mortgage loan interest rates took a significant jump higher, pushing 30-year fixed rate conventional mortgages to a best execution range between 4.0% and 4.125%. On Thursday FHA mortgage loan rates remained in their 3.75% best execution comfort zone (though you will see more variation among participating lenders for FHA mortgage loan rates). All eyes were on Friday’s Employment Situation Report as make-or-break factor–was Thursday a portent of things to come? Or was it just a “moment”? Come Friday, rates actually took back some of that lost ground in spite of an employment report that was, according to our sources, stronger than anticipated. The report didn’t have the anticipated effect (strong economic data is often a catalyst for rising mortgage loan rates based on the investor reaction to that | more...

December 4, 2015

FHA Loan FICO Score Requirements: A Reader Question

By Joe Wallace

A reader got in touch with a question in the comments section about FHA loan FICO score requirements, asking, “I have a client that was denied by my lender but has an approval by another. My situation is this.parents are putting $200k down for the purchase. The boys will be qualifying for the $150k balance. Mid FICOS are 600 and 602 and one son has two lates within the last 6 months. My lender said that with a score below 640, they fall into a different category that prohibits any lates in the past 12 months. Can you please clarify?” Lender standards vary from one financial institution to another, so it’s entirely possible what the reader is asking about here is a specific lender’s standard. In general it’s strongly discouraged | more...

When Is An FHA Loan Better Than A Conventional Loan?

November 18, 2015

HUD 4000.1 Minimum Property Standards: Encroachment, Power Lines, Property Access

By Joe Wallace

The FHA loan rules in HUD 4000.1 include plenty of updates, changes, revisions, and restatements of FHA loan policy. The FHA didn’t provide a comparison from the old rules (HUD 4155.1 and HUD 4155.2) and the new, stating it was up to the end user to be aware of the new policies found in HUD 4000.1. That’s why we’re taking a look at some of the crucial areas of the FHA loan rules–to get a closer look at today’s rules and how they might affect your FHA loan transaction. FHA Minimum Property Requirements (MPRs) are a big part of the appraisal process as these requirements inform the appraiser’s work. We begin our examination of FHA MPRs with a look at a few of the basics. Encroachment HUD 4000.1 says, “The | more...

November 17, 2015

FHA Loan Minimum Property Standards In HUD 4000.1

By Joe Wallace

The FHA home loan rules published in HUD 4000.1 include a set of minimum property standards that a home purchased with an FHA mortgage must live up to. The FHA appraisal is the process used to determine whether a property meets these minimum standards, also known as MPRs (Minimum Property Requirements) and MPS (Minimum Property Standards). According the HUD 4000.1: “As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUDs Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). Minimum Property Requirements refer to general requirements that all homes insured by FHA be safe, sound, and secure.” HUD 4000.1 defines MPS as, “regulatory requirements relating to the safety, soundness and security of New Construction. When examination of | more...

November 17, 2015

Mortgage Rate Trends: Slightly Lower On Monday

By Joe Wallace

Monday was the fourth day that mortgage loan rates didn’t move higher–and after six solid days previously of upward movement, that’s a welcome development. We’re seeing what appears to be a cautious, gradual move lower after that sustained upward pressure. How long that move lower might continue isn’t clear, but we are seeing rates move rather than simply maintain the previous day’s position. 30-year fixed rate conventional mortgage loans are closer to 4.0% (best execution) than they have been in many days. Some lenders may still be offering best execution rates closer to 4.125%, but if the downward trend persists we may see many more lenders headed towards the rock bottom end of the four percent range. FHA mortgage loan rates are still at 3.75%, best execution. You may see | more...

November 10, 2015

Mortgage Rate Trends: Highest Since Summer

By Joe Wallace

Monday say mortgage loan rates move higher for yet another day in a row, putting rates at their highest best-execution numbers since mid-summer. Much of the upward trend at present is blamed on Fed discussions of an interest rate hike, and it seems likely (at least according to our sources) that a December rate increase could be on the table. Any talk of rising rates at this point or indications that the Fed might be inclined to raise them could put more upward pressure on mortgage loan rates due to investor reaction to such news or indicators. Some of those indicators don’t come from the Fed directly, but from economic data releases the Fed is likely to take into consideration when it comes to the overall health of the economy | more...

November 9, 2015

Mortgage Rate Trends: Higher On Friday After Strong Jobs Report

By Joe Wallace

Last week was a tough one for mortgage loan rates–a strong jobs report, Fed testimony on a possible December interest rate hike, and more have combined and helped to push mortgage rates higher. Since our last report, 30-year fixed rate conventional mortgages have broken into the low four percent zone; at the time of this writing those rates (best execution) are reported in a range between 4.0% and 4.125%. FHA mortgage rates have also moved higher, leaving the previous comfort zone (best execution) of 3.5% behind in favor of rates at 3.75%. Rates shifted so dramatically that FHA mortgage best execution rates didn’t even move into a range of rates with the previously reported 3.5% at the low end–we just saw them shift from 3.5% to 3.75%. Remember, these are | more...

November 4, 2015

HUD 4000.1 On “Flipping”

By Joe Wallace

Ever since the publication of the new FHA single family home loan rule book, HUD 4000.1, have been examining loan rules as published in the new guide. One important area of the FHA single family loan rulebook involves the guidelines for buying property with an FHA mortgage that is being sold after having been recently acquired by the seller. HUD 4000.1 states that, in order for a home to be eligible for an FHA mortgage, a certain amount of time must elapse between the sale of the home to the new owner and the subsequent sale of the property to another buyer–this time requirement is known as the HUD “anti-flipping” rule. It states: “Property Flipping is indicative of a practice whereby recently acquired Property is resold for a considerable profit | more...

November 4, 2015

Mortgage Rate Trends: Moving Higher For A Second Day In A Row

By Joe Wallace

Last week, mortgage rates moved higher on Thursday, then leveled out and didn’t lose any more ground on Friday. But Monday and Tuesday we’ve seen the rates move to their highest numbers in four weeks or so, pushing best execution rates for 30-year fixed rate conventional mortgages farther away from that 3.75% zone we saw last month. 30-year fixed rate conventional mortgages have moved recently into a range between 3.875% and 4.0%; if upward pressure continues we could see 4.0% (best execution) become far more prevalent. At the time of this writing, FHA mortgage rates are still at their 3.5% best execution comfort zone but this time around that might not last as long as the previous FHA mortgage loan rate comfort zone–we’re likely to see rates break out into | more...