Articles Tagged With: FHA Loan Regulations

What you should know about FHA 203(h) Loans For Disaster Victims

October 7, 2015

FHA Loans, HUD 4000.1, and Second Appraisals: When One Can Be Ordered

In our last blog post we discussed FHA appraisals, and the fact that FHA loan rules do not permit the request of a second appraisal simply to raise the value of the property or to eliminate required corrections listed on the original appraisal report. So when can the lender order a second appraisal? What circumstances justify this action? The answer can be found in HUD 4000.1, Section II, Part A. According to this part of the FHA loan rules under “Second Appraisals By Original Mortgagee”: “A second appraisal may only be ordered if the Direct Endorsement (DE) underwriter (underwriter) determines the first appraisal is materially deficient and the Appraiser is unable or uncooperative in resolving the deficiency. The Mortgagee must fully document the deficiency and status of the appraisal in | more...

October 6, 2015

FHA Loan Appraisal Rules: The Roof

By Joe Wallace

A recent reader question about the FHA appraisal requirements had us looking up details on those requirements in the new FHA Single Family loan handbook, HUD 4000.1. The previous FHA loan rulebooks including HUD 4155.1 and HUD 4155.2 have been superseded by HUD 4000.1, so it seemed like a good idea to post the FHA’s current appraisal requirements for the roof since it’s one of the most commonly asked-about parts of the home with respect to the FHA appraisal process. When the FHA appraiser comes to review the property, the roof is one of the areas that must be evaluated. According to HUD 4000.1 Part II Section B: “The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if the roof covering does not prevent entrance of | more...

October 5, 2015

FHA Loans For Non-Permanent Resident Aliens

By Joe Wallace

In our previous post we discussed the fact that United States citizenship is not required for borrowers who want to apply for an FHA home loan. A valid Social Security number is required, and there is a U.S. residency requirement that also needs to be met. That means that a variety of people who are not or are not yet citizens have a chance for an FHA home loan if they meet certain requirements (including proof of a valid SSN). The FHA loan rules for non-permanent resident aliens can be found in HUD 4000.1 Section II Part A, which lists the following instructions to the lender: “A Borrower who is a non-permanent resident alien may be eligible for FHA insured financing provided: –the Property will be the Borrowers Principal Residence; | more...

October 5, 2015

FHA Loan Rules, Citizenship, And The New HUD 4000.1 Rule Book

By Joe Wallace

In our comments section, a reader asked if citizenship is a necessity in order to get an FHA home loan. The reader mentioned that he was in the process of getting a Green Card, and that he had a valid Social Security Number. Do FHA loan rules as published in the new HUD 4000.1 permit this reader to apply for a new FHA mortgage loan even though he is not a United States Citizen? The answer is yes–citizenship is NOT a requirement to apply for an FHA mortgage. Proof of a valid Social Security Number is, and since the reader indicated that he had a valid SSN, the only thing needed to move forward is to find a participating FHA lender and fill out the loan application paperwork. Assuming, of | more...

September 21, 2015

FHA Loan Appraisal Questions

By Joe Wallace

There are many readers who ask us appraisal-related questions in the comments section here; some are general questions, while others get quite specific. Here’s an example of one of the more specific FHA appraisal questions we’ve been asked recently: “If a bedroom has two windows with keyed burglar bars do both have to be replaced with quick release burglar bars?”. The FHA has recently issued HUD 4000.1, which is a comprehensive policy guidebook for FHA single family loans including references to FHA appraisal standards. Those references do include a mention of bars on windows: “The Appraiser must report when the Property has security bars on bedroom windows or doors.” Note that this reference says nothing about replacement or removal, however state or local building code might. So what all borrowers | more...

September 19, 2015

All About HUD 4000.1, The New Single Family Policy Handbook

By Joe Wallace

In the weeks leading up to the launch of the new FHA Single Family Home Loan policy handbook, HUD 4000.1, we’ve discussed some of the contents of the handbook in detail, but some may wonder what exactly HUD 4000.1 is and how it affects them. HUD 4000.1 consolidates and updates FHA loan policy for single-family into a single reference. It supersedes many prior FHA loan mortgagee letters, which are issued occasionally by the FHA/HUD to announce, revise, or clarify FHA loan policy. According to the FHA official site, HUD 4000.1, “The Federal Housing Administrations (FHA) Single Family Housing Policy Handbook (SF Handbook; HUD Handbook 4000.1) is a consolidated, consistent, and comprehensive source of FHA Single Family Housing policy.” What does that mean? According to the FHA/HUD, the new handbook has | more...

September 4, 2015

FHA Loan Rules For Lenders: HUD 4000.1

By Joe Wallace

We’ve been reporting on a series of rule updates, amendments, and modifications to FHA single-family home loan policy scheduled to take effect on September 14, 2015. The new FHA Single Family Housing Handbook, also known as HUD 4000.1, contains all the rules and requirements for the FHA single family home loan program. The FHA/HUD official site has a Frequently Asked Questions list that addresses questions about a variety of aspects related to HUD 4000.1. Some of those questions involve FHA policy that pertains to borrowers, some pertain strictly to the lender. For example, lenders may wonder what the FHA policy is with regard to becoming or remaining a participating FHA lender. The FAQ section addresses that specific issue with a list of guidelines that include the following under a section | more...

September 2, 2015

Some Frequently Asked Questions About The New FHA Loan Rules In HUD 4000.1

By Joe Wallace

On September 14, 2015, a new FHA single-family home loan policy handbook takes effect. It’s known as HUD 4000.1 and has several updates, changes and revisions that will take effect on the 14th. There have been some frequently asked questions about some of the details found in the new handbook–the FHA and HUD have published some answers to those questions in anticipation of the launch date for the new rule book. Here are some of those examples as printed on the FHA/HUD official site–one of the top questions? Whether referral fees will be permitted for the origination of FHA single family mortgage loans. The answer: “The lender, or any of the lenders employees, must not pay or receive, or permit any other party involved in an FHA-insured mortgage transaction to | more...

September 1, 2015

FHA Loan Rules: Changes Coming

By Joe Wallace

On September 14, 2015, a new FHA Single Family Home Loan rule book will become the official collection of rules and regulations for all FHA single family mortgage loans. Known as HUD Handbook 4000.1, this volume has been getting a variety of updates since it was made available online in May of 2015. There are a collection of changes, additions, and clarifications to FHA single family home loan policies including quality control, compliance, oversight, how to do business with the FHA and much more. At the time of this writing, some changes/updates have not been finished yet, such as the instructions on electronic delivery of FHA appraisals. There is currently an FHA Frequently Asked Questions .PDFthat addresses some of the changes that will go into effect on September 14, 2015 | more...

Can I buy a manufactured home with an FHA loan?

August 28, 2015

FHA Loan Rules, Lender Standards, And Your FHA Loan Application

By Joe Wallace

Some of the most common questions we get asked in the comments section (where we field all our reader questions about FHA loans and refinance loans) involve what seem to be gray areas surrounding an FHA mortgage. For example, “Will a certain condition in the home make the property fail the FHA appraisal?” or, “How low can my FICO score be?” Some portions of the FHA loan process are dealt with specifically in FHA loan rules. For example, borrowers with FICO scores lower than 500 are not eligible for an FHA loan. Borrowers who are currently delinquent on Federal debts may have difficulty getting loan approval until the situation is resolved with payment or a payment plan. Certain types of conditions–homes located within a high pressure gas pipeline easement, for | more...