Articles Tagged With: FHA Loan Requirements

February 3, 2015

FHA Loan Rules For Non-Occupying Co-Borrowers

The FHA single family home loan program has an occupancy requirement which states that the borrower must intend to live in the home to be purchased with the FHA loan as his or her main residence. But there are also provisions for FHA loans that feature more than one borrower–a “non-occupying co-borrower” who signs the mortgage loan paperwork but does not move in along with the primary borrower and occupant of the home. FHA loan rules say that there is a limit on loans like these in certain cases–in general the borrower will be required to make a 25% down payment on the property as the FHA loan maximum mortgage amount is limited to 75% of the loan-to-value amount. According to HUD 4155.1, FHA loans say specifically: “When there are | more...

January 30, 2015

FHA Mortgage Loan Rules For The New Mortgage Insurance Premium Cuts

By Joe Wallace

A great deal of reader questions have come in about the FHA’s recent move to cut the annual mortgage insurance premium on FHA loans with case numbers assigned on or after January 26 2015. We thought it was a good time to remind our readers and clarify what the FHA has announced with respect to mortgage loans affected by this new rule. Which mortgage loans are affected by the FHA MIP cuts? According to the FHA mortgagee letter (ML) announcing the cuts, “This ML reduces the rate for annual MIP for all Title II forward mortgages, with terms greater than 15 years, except; –single family forward streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009; –Section 247 mortgages (Hawaiian Homelands) Borrowers | more...

January 29, 2015

FHA Refinance Loans: Another Chapter 13 Question

By Joe Wallace

We have gotten a large volume of reader questions about refinancing a home while in Chapter 13 bankruptcy. Here’s the latest: “We have current mortgage, never behind on payment. We like to refinance our home mortgage, but we are discharge from Chapter 13 before couple months! How long we have to wait and are we are qualified? Thank you in advance!” Let’s examine what the FHA official site has to say about FHA loans and bankruptcy. It’s important to note that all situations vary including the rules at one financial institution compared to another. Some lenders may be willing to work with certain borrowers in circumstances that others would not–just because the FHA loan rulebook has provisions for borrowers to apply for loans while the applicant is dealing with a bankruptcy or the discharge | more...

January 22, 2015

FHA Loans Following Chapter 13 Bankruptcy: A Reader Question

By Joe Wallace

A reader asks, “i filed ch 13 in 2012 and my case has been discharged as of Dec 2014. do i have to wait 2 years from that discharge date or the filing date to qualify for FHA?” FHA loan rules for applying for a new home loan in the wake of a bankruptcy state that there is a minimum seasoning period or waiting period required after the discharge of the bankruptcy. For Chapter 13 bankruptcy, the FHA official site (www.fha.gov) has a Frequently Asked Questions page about applying for a new FHA loan post-bankruptcy, which states the following: “A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA mortgage provided the lender documents that one year of the payout period under the bankruptcy has elapsed and | more...

January 22, 2015

FHA Loan FICO Score Requirements: A Reader Question

By Joe Wallace

A reader asks, “We r trying to buy a new double wide and property combo. But our credit scores are 582 & 533. The place where we are getting the house thru said it probly wouldn’t be a problem to get the loan. What do u think?” The answer to this question is fairly simple. When a borrower’s FICO scores are within the FHA minimums for maximum financing, it’s then the lender’s decision to approve or deny the loan based on the lending standards of that financial institution. Let’s examine the FHA FICO score minimum chart as published in HUD 4155.1 and on the FHA official site: That’s an exact reproduction of the chart found in HUD 4155.1. As you can see, one borrower’s credit score is within the FHA | more...

January 20, 2015

Streamlined FHA 203(k) Rehab Loans

By Joe Wallace

Recently we posted about the FHA 203(k) rehab programs. Did you know there is an option for borrowers who want to take advantage of an FHA Streamline loan but don’t have extensive repairs to do? This option is known as the FHA Streamlined 203(k), and is described on the FHA official site as follows: “FHA’s Streamlined 203(k) program permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. Homebuyers and homeowners can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser.” “Homeowners can make property repairs, improvements, or prepare their home for sale. Homebuyers can make their new home move-in ready by remodeling the kitchen, painting | more...

January 16, 2015

FHA Loans In Community Property States: A Reader Question

By Joe Wallace

A reader asks, “Husband and wife are seperated for the moment. No plans to divorce for a while. Husband wants to purchase a home in Georgia. The wife will also purchase at some time in the future. Do they have to be divorced before the husband can purchase a home?” There are too many missing details to give even a general answer on this one–do the married couple currently own a home and have a mortgage? If so, who is taking ownership of the property and financial responsibility for the loan? Those are important factors in any home loan application–the amount of current debt, the amount of current income, and how much of that income is taken up by the current debt. A borrower with too much debt and not | more...

January 15, 2015

FHA Loan Requirements Post-Bankruptcy: A Reader Question

By Joe Wallace

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 14, 2015

FHA Loan MIP Changes: Does My FHA Home Loan Qualify?

By Joe Wallace

A reader asks, “I just got an FHA loan last May. Do I qualify for a reduction when it happens?” This question comes in reference to our previous blog post discussing the FHA announcement that annual FHA mortgage insurance premiums would be reduced in 2015, amounting to a savings as much as approximately $900 per year (according to a speech by President Barack Obama). Our post, “FHA Announces Mortgage Premium Cut” included the following details on the new FHA policy: “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 | more...

January 12, 2015

FHA Loan Application Requirements: A Reader Question

By Joe Wallace

A reader asks, “My husband and I are trying to pay off debt and raise our credit scores to buy a home. Is there a program to help with a down payment? What are the steps needed to get approved for fha loan?” The FHA itself does not provide a downpayment assistance program, but one may be available at a state or local agency. The FHA does have a list of state information that can help you learn what home buyer/home ownership resources might be available near you. You can look up this list at http://portal.hud.gov/hudportal/HUD?src=/states. Steps to an FHA home loan include planning and preparation–you should research the housing market where you want to purchase the home, examine homes for sale you want to purchase and other steps, but one | more...