Articles Tagged With: FHA Loan Questions

When Is An FHA Loan Better Than A Conventional Loan?

May 21, 2015

FHA Loan Appraisals and Home Value: A Reader Question

A reader asks, “We built a new home and within a few months started noticing moisture spots on our basement floor. After no action from the builder for 8 months, we have had to hire an attorney to make them start fixing it. It has been recommended that an interior peripheral drain (or a waterproofing system) be put in.” “The builder defect is our exterior drain was put in incorrectly so drainage water from rain and snow melt is ending up under our slab. I am very concerned about how this will effect resale someday. Have you seen an appraisal adjustment made on a home having this sort of system in place?” The problem with appraisal-related questions like this one is that conditions vary from market to market. What may | more...

May 12, 2015

FHA Cash Out Refinancing Loans For Paid-Off Mortgages: A Reader Question

By Joe Wallace

A reader asks, “I have a house paid for and I am looking for a F H A loan for $10 thousand or $15 thousand . According to bankers because I have not bought anything in the past 10 years I have no credit. is it possible to get a loan somewhere?” FHA loan rules printed in HUD 4155.1 Chapter 3 Section B states that it is possible for an FHA cash out refinance loan on a home that has been paid in full. Specifically, the Chapter says: “Cash out refinance transactions are only permitted on owner-occupied principal residences. Properties owned free and clear may be refinanced as cash out transactions”. However, FHA loan standards aren’t the only ones at work in cases like these–the lender’s standards also apply. If | more...

May 11, 2015

FHA Loan Appraisals: Sewer/Septic

By Joe Wallace

A reader asks, “We closed on house on 3/31. Had inspection. Stated was sewer, prev owner said was sewer, realtor said was sewer. On 5/8 found waste backed up in toilet in basement, called plumber, found out we have a septic system, currently waiting on them to come out inspect and pump.” “We have a FHA loan. How was this missed? we have no problem paying to have it pumped, but who is responsible if it more then pumping out issue? The company we called (only one in area) stated he had just pumped it 2 years ago. So prev owners knew it was on septic.” There is one important question which must be answered–did the reader assume the FHA appraisal could substitute for a home inspection, or did the | more...

May 4, 2015

FHA Loan Rules For Re-Selling: A Reader Question

By Joe Wallace

A reader asks, “I purchased a manufactured home 10 months ago. I tried to sell it to a buyer whose lender told her that I as a seller have to won the home for at least a year before a buyer to use FHA for their loan. Is this a fact?” FHA loan rules do place a partial restriction on how the buyer can sell his or her property that has been purchased with an FHA mortgage loan. This restriction, known as the FHA’s “anti-flipping rule” requires borrowers to wait a minimum of 90 days before selling the property. FHA mortgagee letter 2014-06 spells out these rules, which were amended for a time with a waiver to the anti-flipping rule, but since those days are over a review of the | more...

May 4, 2015

FHA Loans Vs. “Low Interest Loans”: A Reader Question

By Joe Wallace

A reader asks, “Would I apply for a FHA loan if I was looking for a Disability low interest loan? I am trying to find out for my nephew. Were confused by the wording and there seems to be very little information out there surrounding this benefit.” “I am told you need as little as $500 down but cannot find out whether some or all of the closing cost can be financed in the loan. Thank you in advance for your response. He just attended the counseling seminar but no one there was able to answer my questions. I was the only one there seeking this type of loan so maybe there is not as much need to know about this type of loan.” The FHA single-family loan program does | more...

April 28, 2015

FHA Loan Rules For Purchasing A Second Home: A Reader Question

By Joe Wallace

A reader asks, “I applied for a fha loan my contract on the house I am to purchase expires Thursday. I found out Wednesday night that I have to apply for an exception for the 2 fha loan rule and the house I am currently in and have on the market is a fha. I did not know this.” “I qualify for both loans but have no clue how to apply for an exception. I am sure I should be able to get it as I travel 1 hr 10 mins to 1 hr 40 mins each way to work due to traffic increase over the years and the new home is only 10 mins from work. Help! My lender is now help and has dragged this on for several | more...

April 27, 2015

FHA Loan Appraisals and Lender Standards: A Reader Question

By Joe Wallace

A reader asks, “I have a client that is FHA approved, and has had their appraisal done but can not locate the well. Well and septic have been tested and municipality has signed off on both stating they were ok with the way they are.” “My clients lender says no way, must meet the 50′ set back, other lenders say we can do it as long as you have the letter from the township My buyers dont want to start over as they are set to close on the house they are selling in 2 weeks. How can one bank say something different from another while following FHA guidelines?” There are several unanswered questions to go along with this reader question–are the lenders interpreting local or state building code or | more...

April 27, 2015

FHA Loan Rules For Co-Borrowers: A Reader Question

By Joe Wallace

A reader asks, “In the case of two names on the deed (only one will be living in the home), are both incomes & debts considered for debt to income ratios?. Also is it required the mortgage co. listed on both of their Home owner Insurance?.” There are many issues that can affect the answer to this question. Are the two people married? Related by blood, marriage, or a family-type relationship? These are important issues that can affect how much the FHA is willing to guarantee on the loan and how much down payment is required. Also, state laws may affect how such a transaction is carried out, especially if the people buying the home are legally married. Community property states may have laws that govern how a lender is | more...

April 24, 2015

FHA Home Loans and Tax Lien Repayment Plans: A Reader Question

By Joe Wallace

A reader asks, “I have a payment plan on a tax lien from 2009 which I have been paying on time for a few years. Other than that, my credit is perfect. I am wondering if this would be okay for an FHA loan. I have records from IRS showing that this is being paid and can present them as well.” This is an important question. FHA loan rules do not permit borrowers who are delinquent on federal debts to apply for an FHA home loan until that delinquency has been addressed. But what about situations like the reader question, where there is no delinquency, but the federal debt still exists? FHA loan rules that govern the tax lien issue can be found in HUD 4155.1, Chapter Four, Section A. | more...

April 24, 2015

FHA Refinance Loans For Investment Property? A Reader Question

By Joe Wallace

A reader asks, “I have rental property with a mortgage balance of $26000. The property shows a current value of $98900. I would like to refinance but seem to have a problem getting it refinanced? What would you advise me to do in order to utilize my equity to finance another investment.” The scope of this blog is FHA single-family home loans, and we answer questions about FHA loans with that scope in mind. Non-FHA loan related questions that deal with general finance topics may or may not be outside our range of topics. The reader question above may have been submitted under a mistaken assumption that the FHA single family home loan program might include refinance loans (which it does) for investment properties or other non owner-occupied residences (which | more...