Articles Tagged With: FHA Loan Requirements

December 16, 2014

FHA Loan Income Requirements: A Reader Question

A reader asks, “I would like to know how can I get a FHA Loan if my husband and me just make 40.000 a year. I went on bankruptcy in Oct 2011. Right now I have no debts, no car loans. I need an answer as soon as possible, we are living place to place, we paid rent on time,but living with more people is difficult. Also we have $10.000 for a downpayment.” FHA loan rules have no specific minimum income requirements for loan approval. FICO scores are used to approve the loan, as is your employment history and the likelihood of your current employment to continue. One of the most important things related to the borrower’s income isn’t the amount of that income, but rather how the income is | more...

December 15, 2014

FHA HECM Loan Changes: A Reader Question

By Joe Wallace

A reader asks, “I have been trying for a few years now to obtain a FHA reverse mortgage for my condo in Staten Island…We were told that “spot” reverse mortgages are no longer available. Since our condo association will not consider having our entire complex become an FHA approved complex..and it seems every other complex in Staten Island feels the same way, we cannot access our equity which we need to augment our retirement income. Do the recent changes in FHA policy offer us any hope?” The FHA changed the rules for HECM loans in 2014 to include sweeping alterations of the requirements–there are new rules for payments depending on the nature of the loan (fixed or adjustable rate HECM loans), mandatory financial obligations and mortgage insurance. However, the changes | more...

December 9, 2014

FHA Loan Credit Issues: A Reader Question On Disputed Accounts

By Joe Wallace

A reader asks, “I would like to know how to get an FHA loan, I had a Bankruptcy discharged in Aug. 2010. This is my problem I got a credit card to improve my credit score. I was paying faithfully, then another card company that I already had Two that company. I was paying faithfully on those accounts also.” “Well when the credit company took over that account I didn’t realize I now had 3 accounts with that bank. Another reason I didn’t know was, I moved and one statement was going to the old address. When the two statements came . So I would go onto the computer and pay my 2 accounts..My problem is on my credit report shows 30,60,30,60, 90 days late. What can I do to | more...

December 4, 2014

FHA Mortgage Loan Rate Trends

By Joe Wallace

The Thanksgiving holiday interrupted several days worth of falling mortgage loan rates. We saw gains over six business days (holiday weekend falling in between some of those days) with best execution interest rates moving back into the high three percent zone for 30-year fixed rate conventional mortgage rates. FHA rates benefited as well,–FHA mortgage rates fell (best execution) to 3.25%, and while in many cases we see FHA loan interest rates having a hard time breaking out of a comfort zone at the same time conventional rates change, December 1st saw FHA mortgage loan rates drop from the previous business day’s best execution rate of 3.5%, but would eventually settle into a range of numbers. FHA mortgage loan rates moved into that range of best execution rates following some upward | more...

December 1, 2014

FHA Loan Rules For Wells: A Reader Question

By Joe Wallace

A reader asks, “A property has a well under the garage floor which is accessed through a steel covering. Is this acceptable if the Health Dept approves it?” The answer to this question depends greatly on whether the well as described is acceptable under state or local building code. FHA loan minimum property requirements don’t overrule state and local building codes, so compliance with those codes would be required–in the appraisal process, if the appraiser notes a condition that does not comply with either FHA loan rules or state/local building codes, corrections may be required as a consition of loan approval. When it comes to wells, FHA rules printed in HUD 4150.2 state: ” A domestic well must be a minimum of 50 feet from a septic tank, 100 feet | more...

November 28, 2014

Fair Housing Act Violations: A Case in Puerto Rico

By Joe Wallace

A press release on the FHA/HUD official site reveals that a Puerto Rico condo association discriminated against a person with disabilities in violation of federal fair housing laws. According to HUDNo.14-142, “The U.S. Department of Housing and Urban Development (HUD) announced today it has ordered Castillo Condominium Association, in San Juan, Puerto Rico, to pay $20,000 in damages plus a $16,000 civil penalty after finding that the association violated the Fair Housing Act when it refused to allow a resident with disabilities to keep his emotional support animal.” Support animals and/or service animals have a different status than what might be considered an “ordinary pet”. According to the FHA/HUD official site, “The Fair Housing Act makes it unlawful to refuse to make reasonable accommodations in policies or practices when such | more...

November 26, 2014

Holiday Spending and FHA Loans: What To Consider

By Joe Wallace

This week, shoppers brace themselves–and their credit cards–for Black Friday and the official start of the holiday shopping season. If you are in the planning stages for an FHA home loan or a refinance loan, there may be some considerations to make when it comes to your holiday spending. At least where your credit cards are concerned. The holiday shopping season is probably the time of year when it’s most tempting to apply for a new credit card account or even multiple accounts. But opening new lines of credit when you’re just about to apply for a new home loan or refinance loan is a bad idea. Your debt-to-income ratio can suffer when new lines of credit are opened, and a lender may need to consider both the used and | more...

November 21, 2014

FHA Loan Reader Questions: Non-Functioning Wells

By Joe Wallace

A reader asks, “I bought a home with FHA loan and a well system and septic. Later found the well was a spring box system and not on the property we were forced to buy the property seperate from the house .” “The well has never worked and runs out all the time , i was told that FHA wouyld be inspecting the well system prior to closing , but now we have asked for the inspection and it was never done on the well or the septic systm . Any ideas on where to get help?” It may simply be a case of the way this reader question was worded, but it’s worth pointing out that the FHA itself does not perform well inspections, or similar services. An FHA | more...

November 20, 2014

FHA HECM Loan Rule Changes: Credit Standing and Financial Assessment

By Joe Wallace

In 2014, the FHA changed many of the rules associated with Home Equity Conversion Mortgages or HECM loans. One of those rule changes involves a new requirement that lenders perform a financial assessment of potential HECM borrowers to insure the applicants are not only qualified for the program on a financial basis, but also to insure they are able and willing to abide by HECM loan requirements. According to the FHA Mortgagee Letter, “Revised Changes To The Home Equity Conversion Mortgages Requirement”, there were major reasons for the policy changes. “An increasing number of tax and hazard insurance defaults by mortgagors led FHA to establish in Mortgagee Letter 2013-27 a requirement for a Financial Assessment of a potential mortgagor’s financial capacity and willingness to comply with mortgage provisions.” As a | more...

November 19, 2014

FHA HECM Loan Changes: Disbursements

By Joe Wallace

Recently we wrote about FHA Home Equity Conversion Mortgage (HECM) loan rule changes that were announced in FHA Mortgagee Letter 2014-21. Those rule changes include alterations and clarification of policy related to a variety of HECM loan policies. One very important affected area of HECM loan regulation the borrower should know about is related to disbursement of HECM loan funds. Mortgagee Letter 2014-21 announces separate policy for fixed-rate HECM loans and for Adjustable Rate HECM loans. Here is the FHA policy for disbursement limits according to ML 2014-21: “Definitions only for Adjustable Interest Rate HECMs  Initial Disbursement Limit: The maximum disbursement to the mortgagor allowed at loan closing and during the First 12-Month Disbursement Period is the greater of 60% of the Principal Limit; or the sum of Mandatory | more...