Articles Tagged With: FHA Loan Requirements

September 29, 2015

FHA Loan FICO Scores And Payment History

When the FHA loan rule book (HUD 4000.1) lists its minimum FICO score requirements, some people forget that these requirements are minimums and that participating lenders are free to require higher FICO scores, and often do. We get plenty of reader questions about FHA FICO score requirements–here’s a recent example: “I have my 3 FICO scores they are 633,601, and TransUnion is 565…I have credit but some late payments the last being December 2014…My question is do you think I could get a FICO loan for the mortgage or would I need to bring my FICO up?” The answer to the reader’s question is complex for two reasons–lender standards apply and while based on what’s listed here the reader technically qualifies for an FHA mortgage loan, the lender’s FICO score | more...

September 26, 2015

FHA Loan Rules In HUD 4000.1 And Past Mortgagee Letters From FHA/HUD

By Joe Wallace

When the new FHA single-family home loan policy hand book (HUD 4000.1) took effect, it became the official go-to reference for FHA single family new purchase loans and refinance loans. That means that the old FHA loan rule books for single family transactions, including HUD 4155.1 and HUD 4155.2, became inactive as of the launch date for HUD 4000.1. It also means that a large amount of previous FHA/HUD correspondence also became inactive. The FHA/HUD official site has an archive of all FHA mortgagee letters (ML for short, which feature policy changes, updates, modifications, etc.) but there are many of those that are now inactive, superseded by HUD 40001. There is no way to list all the mortgagee letters, handbooks, and other items that have been made inactive, but the | more...

September 24, 2015

FHA Refinance Loan Rules: HUD 4000.1

By Joe Wallace

The FHA Single Family Home Loan policy handbook, HUD 4000.1, contains a variety of changes, updates and other alterations to FHA loan policy. In many cases, FHA loan rules for new purchase loans and refinance loans may have stayed the same, in other cases there are slight (or more substantial) revisions to FHA policy. One set of frequently asked questions about this new handbook and revised policy centers around FHA refinance loans. For example, one section of the new handbook that governs refinance loan transactions discusses what policy FHA has when the borrower’s name is on the title of the property but not listed on the mortgage secured by that property. Does the borrower qualify for an FHA refinance loan in such cases? According to a Frequently Asked Questions list | more...

September 23, 2015

HUD 4000.1 And Changes To The FHA Streamlined 203(k) Rehab Loan

By Joe Wallace

Since the FHA and HUD published the new Single Family home loan policy handbook, HUD 4000.1, we’ve been examining changes and updates to FHA loan rules. One such update affects the FHA 203(k) Streamline Loan, sometimes called and FHA streamline rehab loan. According to the FHA official site, the changes are not being reported in a mortgagee letter or other official FHA/HUD document, because lenders are being asked to review the program policies in their entirety. That said, FHA/HUD did publish a brief list of updates with a few basic details. “FHA is not publishing a detailed document of specific changes to the 203(k) product section,” the official site states, “as it is important that mortgagees and 203(k) consultants read the section in its entirety to understand the policy within | more...

September 23, 2015

HUD 4000.1 Questions: Occupancy

By Bruce Reichstein

With the publication of the new FHA Single Family Home Loan guidebook, HUD 4000.1, there have been some changes, updates, revisions and restatements of existing FHA loan policy. We’re examining the new rule book over time to discover what borrowers and lenders alike may need to know about FHA home loans under the new handbook. Occupancy is an important question/issue connected with FHA home loans. HUD 4000.1 states that there is a definite occupancy requirement for new purchase single-family home loans: “At least one borrower must occupy the property as their principal residence within 60 Days of signing the security instrument and intend to continue occupancy for at least one year.” There is also a requirement on non-occupying co-borrowers–they don’t have to live in the home but must meet the | more...

September 22, 2015

Mortgage Loan Interest Rate Trends: Higher On Monday

By Joe Wallace

You might have noticed more of these types of posts recently–we’ve expanded our coverage of FHA mortgage loan interest rate trends because of the attention to last Thursday’s Fed announcements on the future of interest rates and the potential for volatility in the markets that directly affect those rates as a result. Things seem to be settling back down to normal and our coverage on mortgage loan rate trends will do likewise, but Monday was significant because it was the first day rates moved higher following the Fed’s Thursday announcement that no rate hike was coming, at least for now. 30-year fixed rate conventional mortgage loan interest rates are still in a range between 3.875% and 4.0% best execution at the time of this writing. It was hoped that another | 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 16, 2015

Mortgage Rate Trends: Moving Higher Ahead Of Fed

By Joe Wallace

You may notice us posting more this week about FHA loan interest rate trends; that’s because this is a major week for mortgage loan rates since the Fed announcement due Thursday on a possible interest rate hike is a major news item. Yesterday we reported that it is very likely that rates might go into a holding pattern ahead of the Fed, but as anxiety builds, investor behavior is putting upward pressure on the markets that directly affect mortgage rates. On Tuesday rates moved higher, pushing many lenders aggressively offering sub-four percent rates on 30-year fixed rate conventional mortgages (best execution) back into the 4.0% zone. Some borrowers may have noticed the difference in closing costs rather than an actual rate move depending on the lender. FHA mortgage loan rates | more...

September 16, 2015

FHA Loan Questions: Can Only One Spouse Be Obligated On The FHA Loan?

By Joe Wallace

We get lots of questions about FHA loans where spouses may or may not wish to apply for the loan together. Here’s one such recent question where the couple only wants to have one spouse apply for the mortgage: “Can my wife be the only person on the mortgage? If so do you only use her income to qualify or can you use both incomes. I have a judgment on my credit, but I have more income then she does and that would give us more of a mortgage to work with.” Unfortunately the answer to this question depends greatly on whether or not the couple reside in a state where community property laws apply. Community property laws, which vary from state to state where applicable, have a great deal | more...