Articles Tagged With: FHA Loan Requirements

January 9, 2015

FHA Mortgage Loan Applications: A Reader Question

A reader asks, “My husband and I live in Texas and want to buy a home. My husband makes around $40,000 a year and has decent credit. I am self employed so my tax return shows I only make around 25,000 a year after deductions. All of the debts are in my name and I have the better credit score. My question is, wouldn’t it be better to put the home loan in his name only being that he has no debt? Can we get an FHA loan in his name only?” It’s true that FHA loan rules differ for self-employed borrowers. You may be required to furnish additional documentation along with the usual FHA loan paperwork–profit and loss statements, business tax documents, anything that can show the borrower has | more...

January 7, 2015

FHA Loan Eligibility: A Reader Question

By Joe Wallace

A reader asks, “I have just started building my credit I have never had credit before in the past but do now I checked my score and it’s a 680 I do have two credit cards and my payments have always been paid on time.” “I don’t know much about credit but I’m very interested in buying a home I am self-employed I have a store in New Bedford for the past 9 years I also rent the apartment upstairs from my store just wondering would I be eligible for finance a foreclosed home with an FHA loan now I’ve had my credit for a year now…” When applying for a home loan, a participating lender will likely be looking for a credit score of 620 or better and one | more...

January 7, 2015

FHA Mortgage Rate Trends In Early 2015: Decisively Lower

By Joe Wallace

Mortgage rates in general moved within a narrow range of numbers in 2014, and with the anticipation of the new year, many hoped to see rates take a turn for the better and move below what seemed to be the floor in 2014 for rates. And now in the early days of the new year that seems to be happening. Best execution mortgage loan rates–which are not available to all borrowers or from all lenders–have dipped into the mid three percent range going down to an impressive 3.625% for the most qualified borrowers. That’s the rate for 30-year fixed rate conventional mortgage loans, best execution. That rate is offered to borrowers depending on FICO scores, loan repayment history and other financial qualifications. But what about FHA mortgage loan rates? Are | 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 23, 2014

FHA Loan Reader Questions: Credit Scores for Co-Borrowers

By Joe Wallace

A reader asks, “Hi wanted to know if my gf has income and a co signer or co borrower can see be able to get an FHA loan if her credit ain’t high but the co person is high.” The answer to this question may depend greatly on the lender, the circumstances, and whether the borrower has compensating factors that might offset a lower FICO score. FHA loan rules spell out minimum credit scores and the lender will also have minimum credit score requirements which must be met. The FHA loan rulebook, HUD 4155.1 in Chapter Four has rules which spell out some standards for credit for all applicants, co-borrowers, etc. Chapter Four says in part: “If a credit score is available, it must be used to determine the decision | more...

December 22, 2014

FHA Announces 2015 FHA Home Loan Guaranty Limits

By Joe Wallace

The FHA and HUD have announced the loan guaranty limits for 2015. FHA Mortgagee Letter 2014-25, which announces 2015 limits and policy for single-family “forward loans” for new purchases, FHA Streamline loans, and Home Equity Conversion Mortgages (HECMs). According to the mortgagee letter, “The minimum FHA national loan limit ‘floor’ is at 65 percent of the national conforming loan limit (which is $417,000 for a one unit property for the period January 1, 2015 through December 31, 2015). The floor applies to those areas where 115 percent of the median home price is less than 65 percent of the national conforming loan limit.” The FHA defines a high-cost area where the typical FHA loan guaranty rate may be different as follows: “Any area where the loan limit exceeds the floor is a high cost | more...

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

December 19, 2014

FHA Loan Limits: A Reader Question

By Joe Wallace

A reader asks, “I only want about 40,000. What kind of credit score would I need? Thanks so much.” In many cases borrowers will typically find that lenders require average credit scores of around 620 or so (or better), but no two lenders operate exactly the same–you may find higher or lower FICO score requirements depending on the lender, the type of home loan, etc. This reader question seems to imply that the borrower wants to get a loan for a specific amount, but it’s important to understand how FHA loan amounts are determined. The FHA loan amount is set based on the sale price or the property, or the appraised value–whichever is lower. The loan amount can also be affected by adding things to the loan such as an | more...

December 18, 2014

FHA “Personal Loans”? A Reader Question

By Joe Wallace

A reader asks, “My credit scores a 654 i have a car loan at 22000 where i pay 328 a month and have a debt collector who i’ve already paid but still shows on my credit report. Is there any way I can get a 5000 dollar loan?” It sounds like this reader is asking whether the FHA loan program permits a borrower to apply for a personal loan guaranteed by the FHA. Or perhaps the reader is asking if it’s possible to apply for an FHA home loan for an amount far smaller than it would take to purchase a home. In either case, the answer is no. FHA loan rules do not permit the FHA single family home loan program to be used as a personal loan–FHA guaranteed | more...