Articles Tagged With: FHA Loan Rules

May 10, 2021

What You Need To Know About FHA Jumbo Loans

How much home loan can you apply for successfully? The answer, depending on the housing market and other variables, might surprise you. It’s one thing to apply for a home loan that meets or is lower than the annual county limit established by the Federal Housing Finance Agency (FHFA). Those loans are easier to qualify for because they can be purchased or guaranteed by Fannie Mae and Freddie mac. They are known as conforming loans. But what about those who seek loans that are priced higher than that per-county limit? The answer itself is simple–borrowers can apply for a loan that exceeds county limits. These higher loans are called jumbo mortgages. Borrowers who qualify for them can get a home loan that’s higher than the county limit. But before you | more...

April 23, 2021

The FHA Home Loan Myth

By Joe Wallace

There is a prevailing myth about FHA home loans that persists to this very day–the idea that FHA mortgages are ONLY for first-time home buyers and/or the economically disadvantaged. FHA home loans are thought to be exclusively for these borrowers, but that is definitely NOT TRUE. FHA home loans are for any financially qualified borrower with FICO scores over 500 (the FHA minimum, not your lender’s minimum standard). Some confuse the FHA loan program with the USDA Single-Family home loan program, which DOES have income limits and is aimed at borrowers who are in financial need. USDA mortgages have a no money down option for qualifying borrowers but the homes purchased with these mortgages must be in USDA-approved areas and feature household income caps. FHA mortgages, on the other hand, | more...

April 22, 2021

HUD Brings Fair Housing Act Charges Against Texas Landlord

By Joe Wallace

The Fair Housing Act makes it illegal to discriminate against those seeking housing, whether that is purchase or rental. It is also against the law to discriminate at any stage in the housing process including at the lending stage. We report on Fair Housing Act cases because they affect all who seek housing. Whether you want to rent or buy, read to purchase or still looking, discrimination hurts everyone at all stages of the house-hunting process. Among the latest Fair Housing cases in 2021, a new development as the Department of Housing and Urban Development has announced charges in a housing discrimination case in Texas. A press release issued this week on the HUD official site announces that HUD is charging an owner of a six-bedroom rental home in Frisco, | more...

September 10, 2020

FHA Appraisal Rules: What You Should Know

By Bruce Reichstein

The FHA appraisal process is a requirement. You can’t purchase a home with an FHA mortgage unless there has been an appraisal on the property to determine the fair market value of the home and to ensure the property meets FHA minimum standards. Today’s appraisal standards for FHA home loans do NOT include stepping out onto the roof or physically entering difficult-to-access spaces, which is why you should never purchase a home without arranging a home inspection. The appraisal requirements for your home purchase can be found in HUD 4000.1. These requirements apply to proposed construction, new construction, and existing construction properties. According to HUD 4000.1, “The Mortgagee must evaluate the appraisal and any supporting documentation to determine if the Property complies with HUDs Property Acceptability Criteria. Existing and New | more...

April 28, 2019

HUD Announces Changes To Down Payment Assistance Rules

By Bruce Reichstein

The Department of Housing and Urban Development and the FHA have issued a Mortgagee Letter announcing changes to the rules for down payment assistance. FHA loan program rules permit the borrower to get assistance with the minimum required down payment-this assistance can come in the form of gift funds from family or friends, money from employers, or even down payment assistance programs. Government entities are permitted to provide such down payment help, too. In all cases, the down payment assistance must meet FHA loan requirements. Gifts cannot be loans in disguise; there must be no expectation of repayment of a gift of down payment funds. And now, thanks to revisions to the rules governing these issues in HUD 4000.1, government entities must meet certain requirements when providing down payment funds. | more...

March 12, 2019

Why You Could Buy A First Home With An FHA Mortgage

By Joe Wallace

First-time home buyers may not realize the full value of some FHA home loan features, but once you’ve had a bit of experience with real estate and related issues, the FHA loan features that look good to you will do so for important reasons. FHA home loans have several strengths for those looking for a first home. Do you know what they are? FHA mortgages allow down payment gifts from approved sources. Your family, friends, co-workers, or agencies with no financial stake in the outcome of the transaction may provide genuine gifts of down payment money. The seller of the real estate you want to buy can not contribute toward your down payment. But you CAN negotiate with the seller to get up to six percent of the home’s sale | more...

August 6, 2018

Can I Make My FHA Home Loan Down Payment In Cash?

By Joe Wallace

Some borrowers want to know if they can make their FHA home loan down payment in cash. The FHA loan down payment rules that govern single family home loan down payment sources are found in HUD 4000.1. They have specific requirements for the source of all down payment funds for an FHA mortgage. It does not matter whether you are applying for an FHA rehab loan, an FHA new purchase mortgage for existing construction, or whether you want an FHA mortgage to construct a home to suit your needs; a minimum down payment is required above and beyond all other closing costs and expenses related to the mortgage. FHA loan rules state that the lender must verify all down payment funds and make sure they come from approved sources. FHA | more...

June 20, 2018

Get The Loan! FHA Home Loan Approval Tips

By Bruce Reichstein

Need some tips on how to get and keep FHA home loan approval for a new purchase loan or a cash-out refinance loan? There are some important credit-related things you can do to avoid making your loan more complicated or have it disapproved entirely. Do Not Stop Paying Your Credit Card Bills And Rent On Time Even if your lender has already run your initial credit check, a late or missed payment on your monthly financial commitments can hurt you. It is never safe to assume your lender will look at your credit reports one time only, and any discrepancies that show up in the meantime will have to be dealt with. Your lender would, at a minimum, require documentation for the late/missed payment, but the ability for such incidents | more...

May 22, 2018

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

By Bruce Reichstein

Is United States citizenship required for an FHA One-Time Close / Single-Close construction loan? This issue does not affect all potential FHA borrowers, but it’s a very important one to address, especially given controversy in the news over a variety of societal concerns. Before we get to the specifics of whether or not citizenship is required for an FHA One-Time Close / Single-Close mortgage or ANY type of FHA home loan, refinance loan, or FHA reverse mortgage, it must be noted that FHA home loans are approved on the basis of a borrower’s ability to financially qualify and afford the mortgage. The borrower must be able to legally commit to binding agreements including the loan contract itself, and be of sufficient legal age in the state the transaction is to | more...

February 5, 2018

Does Being A Co-Signer Affect My FHA Loan Application?

By Bruce Reichstein

Does being a cosigner on another loan or line of credit affect your chances at FHA home loan approval? It’s a good question to ask before you commit yourself to being named on another person’s loan. HUD 4000.1 has the FHA loan rules for “contingent liabilities” created when you cosign another person’s loan, starting with the basic definition of the term: “A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment.” This section of the FHA home loan rules adds that contingent liabilities can include, “Cosigner liabilities and liabilities resulting from | more...