Articles Tagged With: FHA Loan Questions

January 15, 2015

FHA Loan Requirements Post-Bankruptcy: A Reader Question

A reader asks, “We recently went through CH7 BK. We have high 500′s for both of our scores and have no debt besides one student loan at $90.00 a month and two credit cards with $0 balance and no payments due. What would our chances be of obtaining an FHA for first time home buyers. We have $5000 to put down and have a city program that will also help with more $ for closing/down payment. We want to buy in September/October. which would be 10 months after our BK discharge.” There are a variety of issues at work in this reader question that should be addressed. Regardless of the bankruptcy issue, borrowers in general will find lenders requiring FICO scores upward of 620 for FHA home loans. It’s true | more...

January 9, 2015

FHA Announces Mortgage Insurance Premium Cut

By Joe Wallace

Some homeowners who purchased homes with FHA loans could save as much as $900 a year thanks to a reduction in the FHA mortgage insurance premium announced by the FHA and HUD. An FHA/HUD press release (HUDNo. 15-001) announced the change, which could take effect as early as the end of the month. According to the release, “As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent.” Half a percent may not sound like a lot to some, but according to the FHA official site, that half-percent reduction “is projected to save more than two million FHA homeowners an average of $900 annually | more...

January 6, 2015

FHA MIP Refunds Part Two: Exceptions

By Joe Wallace

In a recent post, we discussed a reader question about FHA Mortgage Insurance Premiums and the refunds that may be due some FHA borrowers at loan payoff time. The reader asked, “I like to know why FHA MIP don’t send any refund after pay off of my FHA loan pay off 4 months ago.” We replied that FHA borrowers, “may or may not be eligible for a mortgage insurance premiun refund depending on circumstances, but assuming the reader is eligible for a refund, consider the advice found on the FHA official site at www.FHA.gov:” “If you do not receive a check or an application within 45 days after you have paid off your loan, check with your mortgage company to confirm that they have sent HUD a request to terminate the | more...

January 6, 2015

FHA Loan Rules: New Loans Following Short Sales

By Joe Wallace

A reader asks, “How long is the waiting period after a short sale?” There are two standards that may apply. One is the lender’s standards which may or may not go beyond FHA minimum requirements. For that you would need to discuss your situation with a loan officer. But the FHA minimum standards are very clearly defined in FHA Mortgagee Letter 09-52, which begins by saying: “Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to • take advantage of declining market conditions, and • purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.” That said, borrowers may be eligible for a new FHA loan without a minimum wait time (according to | more...

January 5, 2015

FHA Loan Mortgage Insurance Refunds: A Reader Question

By Joe Wallace

A reader asks, “I like to know why FHA MIP don’t send any refund after pay off of my FHA loan pay off 4 months ago.” FHA borrowers may or may not be eligible for a mortgage insurance premium refund depending on circumstances, but assuming the reader is eligible for a refund, consider the advice found on the FHA official site at www.FHA.gov: “If you do not receive a check or an application within 45 days after you have paid off your loan, check with your mortgage company to confirm that they have sent HUD a request to terminate the mortgage insurance on your loan. If they confirm that the correct termination information was sent, contact HUD. If you do not receive a refund or any other documentation from HUD | more...

January 3, 2015

FHA Home Loans and The Fair Housing Act

By Joe Wallace

We have written a great deal in this space about FHA home loans and how they are affected by the Fair Housing Act, which governs fair lending practices connected with home loans (among many other things). The Fair Housing Act governs all housing transactions in the United States and violations of this federal law are, when reported, investigated and prosecuted accordingly. How does the Fair Housing Act work? According to the FHA and HUD official site, “Federal law prohibits housing discrimination based on your race, color, national origin, religion, sex, familial status, or disability.” What doe these terms mean? Race discrimination can be fairly obvious, but questions of sex, family status or disability are often harder to define. An applicant cannot, for example, be denied a home loan or a | more...

December 29, 2014

FHA Loan Eligibility: A Reader Question

By Joe Wallace

A reader asks, ” I bought a home back in 97 I was in the military at the time and in 1999 it went for a short sale and unfortunately they charged my entitlement to my certificate of eligibility $36,000 I got screwed they said they were saving me from foreclosure but in reality I sold the house for more than what I bought it for but now they say I owe that money to get my COE reinstated.” “So that’s why I am now considering using a FHA home loan. My question to you is would I be eligible for the 3.5% down payment with a credit score of 650 and a discharge BK over 2 years its actually 2 1/2 years.” The FICO score portion of this question | more...

December 26, 2014

FHA Loan Reader Questions: Principal Reduction

By Joe Wallace

A reader asks, “I am owner/occupant of a 4 unit residential apartment Bldg which I built 37 years ago. it was successful until wacancies took over after the crash, I have funded the payments with my cash flow but it is now getting lower and lower and need my 6% reduced to the 3% rates with help i a small principal reduction.” This falls far outside the FHA single-family home loan program. The reader doesn’t indicate in the question whether the original loan was an FHA-guaranteed mortgage or not, but in any case, a borrower who seeks a principal reduction needs to work with the lender to see if this is possible. A refinance loan option may be possible depending on the circumstances and the lender, but again, this is | more...

December 16, 2014

FHA Loan Income Requirements: A Reader Question

By Joe Wallace

A reader asks, “I would like to know how can I get a FHA Loan if my husband and me just make 40.000 a year. I went on bankruptcy in Oct 2011. Right now I have no debts, no car loans. I need an answer as soon as possible, we are living place to place, we paid rent on time,but living with more people is difficult. Also we have $10.000 for a downpayment.” FHA loan rules have no specific minimum income requirements for loan approval. FICO scores are used to approve the loan, as is your employment history and the likelihood of your current employment to continue. One of the most important things related to the borrower’s income isn’t the amount of that income, but rather how the income is | more...

December 4, 2014

FHA Mortgage Loan Rate Trends

By Joe Wallace

The Thanksgiving holiday interrupted several days worth of falling mortgage loan rates. We saw gains over six business days (holiday weekend falling in between some of those days) with best execution interest rates moving back into the high three percent zone for 30-year fixed rate conventional mortgage rates. FHA rates benefited as well,–FHA mortgage rates fell (best execution) to 3.25%, and while in many cases we see FHA loan interest rates having a hard time breaking out of a comfort zone at the same time conventional rates change, December 1st saw FHA mortgage loan rates drop from the previous business day’s best execution rate of 3.5%, but would eventually settle into a range of numbers. FHA mortgage loan rates moved into that range of best execution rates following some upward | more...