Articles Tagged With: FHA Loan Requirements

June 12, 2015

HUD Secretary Castro on LGBT Month

On the FHA/HUD official site, there’s a blog post by HUD Secretary Julian Castro, which announces that June is Lesbian, Gay, Bisexual, and Transgender Month, described by Castro as, “a time to recognize the lasting contributions that these Americans have made to our nation, and to honor the progress thats been achieved in securing equal opportunity for all.” He adds, “Right now, were in the midst of a period of transformative change. In recent years, barriers that once blocked too many of our fellow Americans from living and loving freely have come tumbling down. In 2013, the Supreme Court struck down the Defense of Marriage Act, helping ensure that all couples are treated fairly under the law. Same-sex couples are now able to get married in 37 states. And earlier | more...

June 9, 2015

FHA Loan Rules For Down Payments

By Joe Wallace

FHA home loans come with a maximum financing limit–a borrower is required to pay a certain percentage up front as a down payment. There is no such thing as a zero-downpayment FHA home loan, but the amount of the minimum is much lower than conventional loans in typical cases. FHA loan rules specify a minimum 3.5% down payment, but in some cases that down payment may be higher depending on circumstances. What kind of circumstances? One is a situation where the borrower’s FICO scores or other financial qualifications are borderline. FHA minimum FICO standards for maximum financing and to be eligible for the 3.5% down payment start at 580 and above. Your lender may actually have higher FICO requirements than 580 and that is permitted under FHA loan rules. Borrowers | more...

June 8, 2015

FHA Appraisals and Loan Approval

By Joe Wallace

When you are ready to commit to buying a home with an FHA mortgage, one of the big steps toward making that happen is the appraisal process. Borrowers sometimes confuse FHA appraisals with a home inspection, but the appraisal is not a complete, top-to-bottom review of the home. A property may be appraised and approved for the loan, but still contain issues unknown to the borrower. That is why a home inspection is so important. How does the appraisal process work? An assigned FHA approved appraiser comes to the home and personally walks through it, noting any obvious defects in workmanship, code compliance issues, and other things that could require attention as a condition of FHA loan approval. Sometimes there are no issues and the home “passes” the FHA appraisal | more...

June 6, 2015

FHA Mortgage Interest Rate Trends: Moving Higher

By Joe Wallace

Mortgage loan interest rates have been trending higher as of late, partially due to overseas economic headlines such as the Quantitative Easing situation with the European Central Bank, but also because of local economic data–case in point, the much-anticipated jobs report that came out on Friday. The Employment Situation Report showed positive data, which can and often does have a negative effect on mortgage loan interest rates. This may seem like a contradiction in the eyes of those not used to watching the markets, but a good thing to keep in mind about mortgage loan interest rates is that when there is bad economic news, mortgage loan rates can and often do improve. When there is positive news the opposite can and often does apply. Investor reaction to Friday’s economic | more...

June 5, 2015

FHA Home Loan Rules For Foreign Nationals

By Joe Wallace

FHA home loan rules include guidance for participating lenders who are handling FHA loan applications submitted by non-U.S. citizens. Did you know that according to FHA loan rules, it is not required to be a U.S. citizen in order to apply? However, certain restrictions do apply. According to HUD 4155.1 Chapter Four, Section A, “U.S. citizenship is not required for mortgage eligibility”. However, all applicants must have a valid Social Security Numberr (SSN). That is according to the FHA/HUD official site FAQ section, which states: “For all borrowers, including US citizens, the lender is required to document a valid Social Security Number (SSN) for each borrower, co-borrower, and co-signer on the mortgage. All individuals eligible for legal employment in the US must have a SSN. Each borrower must provide the | more...

June 3, 2015

The FHA Appraisal Process–How Does The Lender Choose Your Appraiser?

By Joe Wallace

The FHA appraisal process is different than the home inspection process. For example, the home inspection is an optional but strongly recommended part of the home buying journey that the borrower is responsible for. You should never purchase a home without hiring a home inspector to review the property. An FHA appraisal–the mandatory, but not exhaustive review of the home–is carried out an an FHA appraiser. This appraiser, according to HUD 4155.2 Chapter Four, is hired as a third party by the lender. Did you know there are FHA loan rules that guide the lender in how an FHA appraiser is to be chosen? According to Chapter Four, the lender must recognize that not all appraisers are equal in skill or experience. “An appraiser who is primarily experienced in appraising | more...

What happens to my FHA loan in a natural disaster?

June 2, 2015

The Purpose of the FHA Appraisal For An FHA Home Loan

By Joe Wallace

When you want to buy a home with an FHA mortgage loan, the appraisal process is an important step towards getting the loan approved. The lender is required to determine the loan amount based on the lesser of the appraised value or the sales price of the property. And while borrowers should not confuse the required FHA appraisal with the optional, but still crucial home inspection process, it’s important to know how the FHA defines and views the appraisal in the home loan process. FHA loan rules for appraisals are currently found in HUD 4155.2, Chapter Four. In that chapter, under a heading titled “Purpose of a Property Valuation”, we find the following: The purpose of the property valuation process is to: –determine eligibility for mortgage insurance based on the | more...

June 2, 2015

FHA Occupancy Requirements

By Bruce Reichstein

One common type of question we are often asked about FHA loan occupancy rules involves situations where the borrower wants to purchase the home for his or her primary residence, but may be gone for extended periods of time because of job-related travel. Some borrowers want to know if the FHA loan rules on occupancy specify a number of calendar days per year of occupancy, or if a spouse and children can fulfill the borrower’s occupancy requirement in his/her absence. FHA loan rules found in HUD 4155.1 Chapter Four Section B simply states, “A principal residence is a property that will be occupied by the borrower for the majority of the calendar year.” It may be at the lender’s discretion to determine what the minimum occupancy for the borrower might | more...

June 1, 2015

FHA Loan Rule Changes and The New Single Family FHA Policy Handbook

By Joe Wallace

The FHA announced important changes to its single family home loan program for 2015–a new Single Family FHA Policy Handbook that would essentially be the go-to guide for all rules and regulations for a typical FHA home loan. The new handbook was supposed to go into effect in mid-June and take precedence over the old collection of policies. But the FHA and HUD have extended the deadline for this new handbook to go into effect and now existing guidance will be valid through September 14, 2015. According to the FHA official site, “As of May, 18, 2015 users can access the online SF Handbook for free from the link provided on HUDs Client Information Policy Systems (HUDCLIPS) web page. The online SF Handbook makes it easier for mortgagees and other | more...

May 30, 2015

Common Myths About FHA Home Loans

By Joe Wallace

FHA loan myths are hard to dispel–no matter how many times you try to set the record straight, there will always be people who simply don’t know the truth about FHA loans and how they can help the typical house hunter. For example, some people mistakenly believe that FHA loans are only for the economically disadvantaged. Others believe something similar along these lines–that it is possible to “earn too much” to qualify for an FHA mortgage. These things are not true. Another myth about FHA home loans is that a borrower’s eligibility is solely dependent on what the FHA loan rules say about FICO scores, credit history, etc. But this is also not the reality behind the FHA home loan process. For example, FHA mortgages do have a minimum FICO | more...