Articles Tagged With: FHA Loan Questions

April 23, 2015

FHA Loan Rule Questions: Chapter 7 Bankruptcy

A reader asks, “I had a Chapter 7 Bankruptcy discharged on 09/16/13. My home was not included in the BK. I have owned the home for 3 years and have never missed or been late on a payment. We are considering selling our current home and purchasing another one closer to where my wife and I work.” “We have over $100,000 in equity in our current home. We have a combined income of $240,000 a year. We have reestablished our credit and have scores in the high 600′s. We currently have an FHA loan. What is the waiting period to qualify for another FHA loan after CH. 7 BK discharge? I have heard 2 years. Is there any way to reduce this time?” The FHA has a Frequently Asked Questions | more...

Can I buy a manufactured home with an FHA loan?

April 23, 2015

FHA Loan Income Rules: A Reader Question

By Joe Wallace

A reader asks, “Where I can find the income limits on FHA loans, if customer is buying for the first time?” This reader question implies two misconceptions about FHA home loans. The first is that there is a preference, advantage, or other special treatment given to first time FHA loan applicants or first-time home buyers. This is not true insofar as the FHA single-family home loan program itself is concerned. It’s true that there may be state or local programs in the borrower’s zip area that might be available to help first time home buyers. It may also be true that some financial institutions offer first time home buyer programs. But the FHA loan process itself shows no preference, gives no special benefits to a borrower who has never applied | more...

April 22, 2015

FHA Loan Employment Rules: A Reader Question About Changing Jobs

By Joe Wallace

A reader asks, “Would I still be eligible for an FHA Loan if I accept a position that with a higher salary with a different employer? Ive been on my current job for almost 7.5 years. My new and current positions are in different fields. However, the new position is in the same field as that I was in prior to my current job. I was told that longevity on the job was part of the criteria aside from creditworthiness, debt/income, etc. I dont want to miss this opportunity to purchase a home and I dont want to miss this job opportunity.” Let’s examine what FHA loan rules have to say on this subject–part of the answer to this reader question is found in Chapter Four, Section D of HUD | more...

April 22, 2015

FHA Loans For Mixed Use Properties: A Reader Question

By Joe Wallace

Many of our reader questions posted in the comments section here come from loan applicants and home buyers, sometimes even sellers, all wanting to know more about certain aspects of the FHA loan process. But one recent question comes from a lender, who asks: “Customer had bankruptcy chapter 7- discharged 1-2012. Wants to but a home that has a convience store attached to it. Can I do the loan with 5% down and count the income from the store?” FHA loan rules for mixed-use property appraisals address this issue. HUD 4150.2 Chapter Three states: “A qualified property must be predominantly residential in use and appearance. Any nonresidential use of the property must be subordinate to its residential use, character and appearance. A property, any portion of which is designed or | more...

April 17, 2015

FHA Home Loans: What Is CAIVRS?

By Joe Wallace

In our last post, we answered a reader question about trouble with an FHA home loan associated with information found in the CAIVRS system. One of the important aspects of that reader question is the definition of what CAIVRS is and how data found in that system could affect an FHA mortgage loan application. The FHA official site has a Frequently Asked Questions section that addresses CAIVRS, which stands for Credit Alert Verification Reporting System. This is a system maintained by the federal government that, as the FHA official site explains, “lists persons who have defaulted or had a loan foreclosed within the last three years on a debt owed to the Federal government or are currently delinquent on a debt owed to the Federal government.” Examples of what the | more...

April 17, 2015

FHA Loans After Foreclosure, CAIVRS, and Lender Standards: A Reader Question

By Joe Wallace

A reader asks, “We have some questions regarding applying for a mortgage. we have extenuating circumstances that are keeping us from being approved and so we are looking for some direction. First my income, I am a Rn working through an agency therefore, a large portion of my weekly pay in non taxed. The first lender could not verify my income because my w2 is less then my take home pay. We went with another mortgage broker and they were able to verify my income. Then as we were going through the process, our CAIVRS # was declined.” “We cleared it up with FHA and they gave us the green light to proceed with a mortgage, however, our lender is still declining us . What happened was we had a | more...

April 14, 2015

FHA Loan Rules For Commission Income: Another Reader Question

By Joe Wallace

A reader asks, “What if a person went from a commission based job as a loan officer to a salary plus commission job as a Mortgage Loan Manager? Would the salary still be averaged over 2 years?” This question is in reference to an earlier post we did back in 2013, which was titled, “FHA Loans and Commission Income: A Reader Question”. In that blog post, we answered a reader who asked us, “Is it true that if you work in a job where your pay is based on commission you have to be with your current employer for at least one year to obtain a FHA loan, even if your prior job was in the same line of work and was also a commission paying job?” The answer we | more...

April 10, 2015

FHA Home Loans and Credit Score Issues: A Reader Question

By Joe Wallace

A reader asks, “I have an average credit score of about 600, the same with my boyfriend. We have a good chunk of money for a down payment but have been turned down by two lenders.” “We make good money also. We don’t currently have revolving credit but have just been approved for secured credit cards. We would like to purchase in the next month or so rather than waiting. Is there anything we can do?” Borrowers in this situation should call the FHA directly at their toll-free hotline: 1-800 CALL FHA. Request a referral to an FHA/HUD approved housing counselor in the local area who can help advise on pre-purchase issues including credit. Pre-purchase counseling can be a big help to house hunters, especially those who are new to | more...

April 10, 2015

FHA Loan Rules: Student Loan Debt And Mortgage Applications

By Joe Wallace

A reader asks, “if I have a student loan with a 0 payment and can not get the payment what % will fha use for the student loan payment?” The answer to this question depends greatly on the status of the student loan. Is the student loan in deferment? And if so, for how long? FHA loan rules in HUD 4155.1 Chapter Four Section C state: “Debt payments such as a student loan or balloon note scheduled to begin or come due within 12 months of the mortgage loan closing must be included by the lender as anticipated monthly obligations during the underwriting analysis.” FHA loan rules in Chapter Four also add, “Debt payments do not have to be classified as projected obligations if the borrower provides written evidence that | more...

April 7, 2015

FHA Loans and Verifiable Income Sources: A Reader Question

By Joe Wallace

A reader asks, “I have a notarized agreement with the father of my child to receive a total amount of cash distributed in two or more deposits during the month in my account.” “I receive it on Cash and then I deposited in my bank account. My lender deny me the loan because they need to see the whole amount agreed in only one single deposit. Is that true? How can I properly prove and evidence this income?” It’s important to remember that FHA home loans have two sets of standards which must be followed–basic FHA loan guidelines are one, and participating lender standards are another. Depending on the laws of your state, lender requirements, and other factors, a borrower may find questions such as these tough to get a | more...