Articles Tagged With: FHA Loan Rules

December 13, 2021

Qualifying For An FHA Loan

Here’s a great example of a common question we are often asked: “How much is the minimum downpayment required for FHA loan? How do I qualify?” The main issue with questions like these is that the question isn’t specific enough to answer to the reader’s satisfaction. Why? Because good credit scores aren’t enough, and lender FICO score requirements, in general, can vary between one financial institution and another. Essentially, what a borrower needs to know when preparing to apply for an FHA mortgage includes (but is not limited to) a list of items. For starters, you DO NOT have to be a first-time homebuyer to qualify for an FHA mortgage. You also don’t have to worry about income caps or household income restrictions for this type of home loan. Some | more...

December 6, 2021

Thinking About A Mortgage Loan?

By Joe Wallace

If you are considering a home loan but aren’t quite ready to commit yet, you are said to be in the planning stages of your mortgage. That planning phase is quite important and should begin as early as possible so you have plenty of time to save money for your FHA mortgage loan down payment (a minimum of 3.5% down is required), your closing costs, and other loan expenses. There are three basic areas you should pay attention to in the planning stages of your home loan–your savings, your debt, and your credit scores. The credit score portion of the process is obvious–if you don’t start monitoring your credit, work actively to reduce your credit usage and get your credit card balances as far below the 50% line of your | more...

December 1, 2021

FHA Loan Limits Increase In 2022

By Bruce Reichstein

There are higher FHA loan limits scheduled for the year 2022. The FHA and HUD have published two mortgagee letters explaining the new limits for purchase loans and reverse mortgages guaranteed by the FHA (known as FHA Home Equity Conversion Mortgages). According to the HUD official site, the new forward mortgage loan limits for FHA loans in 2022 are available to view but do not take effect until the new year. HUD.gov reminds readers that the FHA loan limit calculations include “a nationwide forward mortgage limit ‘floor’ and ‘ceiling’ for a one-unit property. In 2022 the floor is $420,680 (low-cost areas) and the ceiling is $970,800 (high-cost areas). The floor is established at 65% of the national conforming loan limit of $647,200 for a single-unit home. For multi-unit properties in | more...

November 30, 2021

Do I Have To Make A Down Payment On An FHA Mortgage?

By Joe Wallace

One variation of a commonly asked question about FHA home loans is, “Do I have to make a down payment on an FHA mortgage?” This question gets asked sometimes in reference to other government-backed loans that feature no down payment (available via a Department of Veterans Affairs program offered to qualifying military members and certain military spouses only). FHA home loans do require money down-the borrower’s minimum required investment is 3.5% of the adjusted value of the home. But the borrower does not always have to pay that money out of pocket. Why? State and local down payment assistance programs can help–a borrower using a state or local program that meets FHA standards for third-party down payment help could save thousands upfront on the loan. What kind of standards are | more...

November 29, 2021

New to FHA Loans? Things You Need To Know

By Joe Wallace

What are the FHA loan basics you should know as a first-time homebuyer? The first thing you should remember is that FHA loans are not restricted to first-time buyers, but there ARE state-level down payment assistance programs and closing cost assistance programs that may be able to help you with your FHA mortgage as a first-time buyer. Those programs can help save you thousands of dollars in up-front costs on the down payment and other expenses with your loan. Remember that FHA loans permit your seller to contribute up to six percent of your closing costs as an incentive to close the deal, but any amount valued above that six percent results in a dollar-for-dollar reduction in the FHA loan amount. First-time home buyers are sometimes not aware that they | more...

November 24, 2021

When Will You See The New FHA Home Loan Limits For 2022?

By Bruce Reichstein

FHA loan limits for 2022 have not been published at the time of this writing but many who are planning to purchase a home in the new year are eager to know whether loan limits are changing–higher or lower depending on where you live. When do the new rates get published? This time last year, FHA loan limits for 2021 wound up being published on December 2, 2020, FHA issued Mortgagee Letter 20-41 (setting the FHA loan limits for purchase loans, also known as forward mortgages) and Mortgagee Letter 20-42, establishing the limits for FHA Home Equity Conversion Mortgage loans. In both cases, the loan limits are effective starting on the first day of the new year and not before. That means that even if you can look up the | more...

November 19, 2021

Updated FHA Appraisal Rules

By Joe Wallace

The Federal Housing Administration has issued a set of revised instructions for FHA appraisals that’s meant to bring the process more fully in line with the Fair Housing Act. What kind of changes? We’ve discussed the basics in a previous article, but the specifics required include modifications to HUD 4000.1, the FHA Single Family Lender’s Handbook. One big change is an entry in a new section called Appraiser Conduct, which includes the following instruction; the appraiser is required to be competent, independent, and objective. But the appraiser must also NOT: • Discriminate in “developing any part of the appraisal or value conclusion based on characteristics that are protected by federal, state, or local laws”; • Misrepresent “the scope of work performed in the completion of the FHA appraisal”; • Develop | more...

November 12, 2021

How Long Do You Have To Be At A Job To Get An FHA Loan?

By Bruce Reichstein

How long do you have to be at one particular job to get an FHA loan? The employment issue is an important one, but some borrowers misunderstand the rules, thinking them to be more strict than they actually are. What is the reality of the FHA loan employment rules? FHA Loan Rules For Minimum Employment Standards The rules governing FHA loan employment standards are found in the FHA loan handbook, HUD 4000.1, which includes the following requirement on how the lender must verify the borrower’s employment history: “Mortgagees must not accept or use documents relating to the employment, income, assets, or credit of Borrowers that have been handled by, or transmitted from or through the equipment of unknown parties, or Interested Parties.” Furthermore, the lender “may not accept or use | more...

November 10, 2021

Get Ready For Your New Home In 2022

By Joe Wallace

Are you considering a home loan in 2022? There are many options and while the FHA home loan limits for the new year have not been announced at press time, borrowers should know the FHA loan limits for 2021 were increased over the previous year. Will that happen again in 2022? Time will tell but it’s a good idea to start thinking about your home loan as early as possible to get ready with a budget and a plan. FHA Forward Mortgage Options In 2022 The “forward mortgage” is the kind of loan you will use to buy your dream home. They are also known as “purchase loans” and simply as “home loans”. And with the FHA Single Family Home Loan program, your forward mortgage loan options are not just | more...

November 9, 2021

FHA Mobile Home Loans Get Enchancements

By Bruce Reichstein

For the first time in four decades, the Federal Housing Administration has published major new guidelines to improve the sale of manufactured homes, mobile homes, etc. In a press release on the FHA and HUD official sites, it was announced that the FHA Title One Program for purchasing mobile homes has been revised and “enhanced” with policies designed to streamline the program and help those who want to use and FHA mortgage to buy a manufactured home. These rules are updated to include FHA mortgages for mobile homes that are “titled as personal” as well as the lot where such a home would be placed. Motivation for these enhancements includes a need to make the program guidelines more understandable to both lenders and borrowers, “while providing expanded eligibility requirements for | more...