Articles Tagged With: FHA Loan News

November 3, 2015

FHA Energy Efficient Mortgages: New Standards For 2016

In 2016, FHA borrowers looking to add Energy Efficient Mortgage loans to their transaction will have some new standards to use related to the energy efficient improvements they wish to add. Thanks to a new partnership between the FHA, HUD, and the Department of Energy, certain ratios will be increased in 2016, according to a press release found at the FHA official site. “FHAs existing EEH policy allows stretch ratios for homes that are built or retrofitted to the 2000 International Energy Conservation Code (IECC). For standard FHA loans, debt-to-income (DTI) ratios are limited to 31 percent (front-end) and 43 percent (back-end).” “Under FHA policy for the EEH mortgage, these DTI ratios can be increased to 33 percent and 45 percent respectively. To increase opportunities for homeowners to achieve and | more...

October 28, 2015

Mortgage Rate Trends: Sideways to Slightly Better Pre-Fed

By Joe Wallace

Wednesday is potentially a big day for mortgage rates–there’s an FOMC announcement today that could influence mortgage loan rates depending on the contents of that announcement and investor reaction to it. The Fed has been debating a hike in interest rates once the economy is deemed in the right position to accept the hike. Any talk of raising rates has in the earlier times put investors in a mood to react in ways that put upward pressure on mortgage rates. That said, some feel there’s no rate hike coming–at least not today. According to a Marketwatch.com piece this morning by columnist Frank Gold, “Almost no one is looking for the Federal Open Market Committee (FOMC) to raise short-term interest rates when it ends its October meeting on Wednesday.And few expect | more...

October 21, 2015

FHA Loan Rules: Frequent Changes of Employment

By Joe Wallace

HUD 4000.1, the recently published Single Family Home Loan policy rule book, has either reprinted, revised, updated, or restated FHA loan policy for all single family home loan transactions. That’s why we’re examining some of the most important-to-the-borrower sections of the new rules–bringing you the latest FHA requirements so you can make informed decisions about your FHA loan or refinance loan. One area we get asked questions about on a regular basis is FHA loan policy toward borrowers who have recently changed jobs, or frequently change jobs due to the nature of their work. How do FHA loan rules address such issues? The answers, found in HUD 4000.1, Section II, Part A, include the following introductory statements about borrowers with frequent or recent job changes: “If the Borrower has changed | more...

October 20, 2015

FHA Loan Rules: Self Employment Income

By Joe Wallace

Ever since the FHA and HUD published the new guidelines for single-family home loans, HUD 4000.1, we have been reviewing the new rules and discussing important issues as the new rules affect them. One of these areas has to do with income verification for credit-check-required FHA mortgages and refinance loans. The last time we discussed the FHA loan rules on income verification for self-employed borrowers, the old FHA loan rulebooks HUD 4155.1 and HUD 4155.2 were still in effect. What does HUD 4000.1, which supersedes all previous FHA loan rules for single family mortgage loans, have to say about borrowers who are self-employed? For a start, the FHA defines what it means by “self employment income”: “Self-Employment Income refers to income generated by a business in which the Borrower has | more...

October 15, 2015

FHA Loans, Early Payoff, And Prohibited Fees: HUD 4000.1

By Joe Wallace

With the publication of HUD 4000.1, existing FHA loan rules have been restated, updated, modified, or reprinted. In some cases nothing has changed, in other cases there have been major or minor alterations to the language, terms or conditions of these FHA loan rules. We’re examining many sections of the new rulebook and discussing common issues that may be affected by those changes, even if in some cases the rules haven’t changed. Knowing what’s in HUD 4000.1 as opposed to the old FHA single family home loan rules found in HUD 4155.1 and 4155.2 is important as HUD 4000.1 is THE definitive source for the program now. One big question some borrowers have about FHA loans is what happens if an early payoff is chosen. Can the lender penalize or | more...

October 14, 2015

Mortgage Rate Trends: Moving Lower To Start The Week

By Joe Wallace

Monday was a holiday, so no new mortgage rate information was published, but on Tuesday after the three-day weekend (for banks, federal offices and some businesses) mortgage loan rates began moving lower. The recovery, such as it was, wasn’t enough to push rates into a new best execution range or rates–borrowers in some cases may notice the difference in closing costs rather than an actual change in the rate. 30-year fixed rate conventional mortgages were reported at, best execution, 3.875% depending on the lender. Some more competitive lenders may be offering rates below that number at the time of this writing, but much depends on the borrower’s financial qualifications and other factors. FHA mortgage loan rates are holding at a best-execution 3.5%, though it’s too early to say whether this | more...

October 13, 2015

FHA Loan Credit Questions: Delinquent Rent Payments

By Joe Wallace

A reader asked us a question in the comments section recently about FHA loan applications and missed payments. “I have let family members rent 2 apartments in my name and they left them early which left me with the bill–will that keep me from qualifying for a FHA loan?” The answer to this question depends on several things. Was this simply a case of breaking a lease? If so, was the rent paid on time before the lease was broken? If there are late or missing payments, that could be an issue depending on circumstances, the lender, and whether the payment issue was ever resolved. Any debt in the borrower’s name would be examined by the lender, even if it was to help out another family member. Co-signing is also | more...

October 9, 2015

Mortgage Rate Trends: Moving Higher

By Joe Wallace

It’s been a harder week for rates–last week we saw improvement on a daily or near-daily basis. This week, the opposite was true. On Thursday rates climbed higher, pushing 30-year fixed rate conventional mortgage loan interest rates out of their previous best-execution range (between 3.75% and 3.875%, depending on the lender and other factors) into a single, higher rate (3.875% best execution). FHA mortgage rates are still being reported at a best execution 3.5%, though if the upward trend persists, we’ll likely see that break out into a range of rates with 3.5% at the bottom end. If upward pressure continues over the short term, that range could consolidate into a higher best-execution rate. FHA rates have in the past tended to find a “comfort zone” and remain there, but | more...

October 3, 2015

Mortgage Rate Trends: Still Lower Depsite Ups And Downs

By Joe Wallace

On Friday a much anticipated jobs report came and went, offering what some market watchers describe as a strong excuse for the Fed not to raise interest rates. Rates on Friday started off strong, but some bond market turmoil did force a reversal of fortune, but not enough to keep rates from ending the day stronger than yesterday. How strong? 30-year fixed rate mortgage rates are squarely in 3.75% territory, best execution, with some more aggressive lenders offering best execution rates even lower than that. FHA mortgage loan rates moved out of the previously reported range and solidly into 3.5% territory, though FHA mortgage loan rates do tend to vary more among participating lenders than their conventional counterparts. Best execution rates are offered to those with outstanding FICO scores and | more...

October 2, 2015

Mortgage Rates: Lower Ahead Of Jobs Data

By Joe Wallace

At the end of the business day on Thursday, mortgage loan rates had fallen again, making a fourth straight day this week of improvement ahead of today’s (Friday) jobs report. That report (the “Employment Situation Report”) has the potential to move rates in either direction depending on the contents of that report and investor reaction to it. Borrowers who have been floating up to this point–not making an interest rate lock decision/agreement with the lender–should know that while there’s always a risk associated with floating, the risk increases with scheduled economic data releases like this one. Best advice if you aren’t sure–ask your lender which way he or she thinks the wind is blowing, so to speak, with rates at the moment. The numbers are very good at this point | more...