Articles Tagged With: FHA Loan Rules

September 21, 2017

Can I Get An FHA Home Loan For A Mixed-Use Property?

Can I get an FHA loan for a mixed use property? Many borrowers want to know if the building they want to buy is still eligible for an FHA loan in spite of zoning issues, design, or other factors that render the home a combination of a residence and non-residential purposes. What do FHA home loan rules in HUD 4000.1 say about such transactions? To begin, the FHA defines what it deems to be “mixed use property”: “Mixed Use refers to a Property suitable for a combination of uses including any of the following: commercial, residential, retail, office or parking space. Mixed Use one- to four-unit Single Family Properties are eligible for FHA insurance” with certain restrictions in place. It’s important to note that FHA loan rules in this area | more...

September 18, 2017

What Is A New One-Time Close Construction FHA Home Loan Compared To Existing Construction Loans?

By Bruce Reichstein

What is an FHA new construction loan compared to existing construction loans? Essentially the difference involves whether the home has been occupied or not since the time it was completed. FHA loan rules governing how such properties are classified can be found in HUD 4000.1, the FHA Loan Handbook. Existing Construction Existing construction loans are for structures that have been occupied at least once since the time they were completed. Such properties may be very new, others may be very old. “Existing Construction” loan procedures are less complex than for New Construction loans because the permits, escrows, inspections and other aspects of building a home have already been satisfied before the borrower comes along to buy the property. New Construction This type of property has never been occupied by an | more...

Can I buy a manufactured home with an FHA loan?

September 8, 2017

What Does “Legal Restrictions On Conveyance” Mean?

By Bruce Reichstein

What does “legal restrictions on conveyance” mean? It’s a question some borrowers won’t need to ask, but it is one that can and often does affect some transactions-especially where condo loans are concerned. FHA loan rules require the property that is purchased with an FHA loan to be “freely assumable”. That basically means there can be no limits imposed on the owner of the property on selling or otherwise disposing of the property. The lender is required to make sure there are no legal restrictions on the borrower in this way. What kind of restrictions do we mean here? One type is the “right of first refusal” found in some condo owner association agreements. Depending on the wording of such agreements, the owner may be required to allow the condo | more...

August 24, 2017

Do Section 8 Housing Vouchers Count For FHA Loans?

By Bruce Reichstein

There are many different types of income that can be used to qualify for an FHA home loan. While there is no minimum or maximum income requirement to qualify for an FHA mortgage, the borrower’s debt-to-income ratio, stability and duration of income, and other factors will be scrutinized as part of the loan application process. Some income is simple to verify. Other types of income have have additional requirements. That is true of certain public assistance including Section 8 Housing Choice vouchers and income received from government-run public assistance programs. In these cases the duration of the payments will be an important factor. Using Section 8 Housing Choice Vouchers As Income The FHA loan handbook, HUD 4000.1, states on page 210 that a lender is responsible for verifying the nature | more...

July 26, 2017

What Is An FHA Loan Modification?

By Joe Wallace

What Is An FHA Loan Modification? According to the FHA loan handbook, HUD 4000.1, such modifications are part of a loss-mitigation program from the FHA and HUD designed to help FHA borrowers avoid foreclosure and keep their homes. HUD 4000.1 states that FHA loan modification is available through a program called FHA-HAMP, or the FHA Home Affordable Modification Program. “The use of an FHA-HAMP Option is to both alleviate the Borrower’s burden of immediate repayment of arrears and to adjust monthly payments to a level sustainable by the household’s current income. The FHA-HAMP Option may or may not include a Partial Claim.” A “partial claim” is defined in the FHA loan rules as follows: “The total amount available is the lesser of: (1) the unpaid principal balance as of the | more...

July 17, 2017

What Is A One-Time Close FHA Construction Loan?

By Joe Wallace

The FHA single family loan handbook tells us that FHA home loans are for a variety of different types of purchases including existing construction, “new construction” which means a home recently built but never occupied by an owner, and “proposed construction” loans which allows the buyer to apply for a loan to fund both the construction phase and the “permanent” phase of the mortgage. How do FHA construction loans differ from new purchase loans? Aside from the obvious (new purchase loans for existing construction move faster than construction loans do thanks to the lack of a construction phase for the existing construction loan) there are some important considerations to think about when contemplating your construction loan options. Is An FHA Construction Loan Right For Me? If you need to get into | more...

June 6, 2017

HUD: June Is National Healthy Homes Month

By Joe Wallace

The Department of Housing and Urban Development has announced the second-annual National Healthy Homes Month. According to a press release at the FHA/HUD official site, “Launched by HUD’s Office of Lead Hazard Control and Healthy Homes (OLHCHH), National Healthy Homes Month 2017 will focus national attention on ways to keep people of all ages safe and healthy in their homes.” That focus includes an emphasis on lead paint. According to the HUD official site, National Healthy Homes Month is themed, “Just What the Doctor Ordered,” and put the spotlight on “the vital role that pediatricians and the health community play in healthy homes education” The HUD press release observes that due to lead poisoning and other home-connected health risks, creating a healthier home environment should be a top priority. “National | more...

June 5, 2017

FHA Appraisal Problems: A Reader Question

By Joe Wallace

A reader asks, “I had an FHA appraisal and that came down said everything was in good working order, inspection on roof and all windows. Everything said it was old but good. Bought the house, got $5,000 off for repairs but turns out all windows need to be replaced. Roof needs to be replaced, central air unit needs to be replaced (which was done). But windows are all broken, don’t work and roof is leaking, all plywood needs to be replaced…is there anything we can do or is this all on us?” The implication of this reader question is that the reader did not pay for the optional (but critically important) home inspection. We can’t speculate on what actually happened, but all borrowers should know that it is stated FHA/HUD | more...

June 1, 2017

HUD Announces Settlement In California Fair Housing Case

By Joe Wallace

The Department of Housing and Urban Development has announced a settlement in a California Fair Housing Act discrimination case. According to the FHA/HUD official site, HUD “reached an agreement with the owner and manager of a California apartment complex, resolving allegations they discriminated against tenants because of their national origin and familial status. Two related complaints filed with HUD alleged that the manager of the Four Palms Apartments in Mountain View, California, made discriminatory statements about Latino residents and prohibited their children from playing outside”. Such discrimination is not permitted under federal Fair Housing Act laws. “A family’s right to enjoy their home shouldn’t depend on where they are from or whether they have children,” said Bryan Greene, HUD’s General Deputy Assistant Secretary for Fair Housing and Equal Opportunity, who | more...

May 31, 2017

After The FHA Loan Closes: FHA Loan Reader Questions

By Bruce Reichstein

A reader got in touch recently to ask an FHA loan question about the disposition of the property once the loan has closed. “After receiving the loan, are there any regulations on putting two other mobile homes on the property? They will not be on a permanent foundation. We are currently buying 15 acres of land in Texas.” FHA loan rules are clear about the status of a mobile or manufactured home that is purchased with an FHA mortgage loan-all such property types must meet FHA minimum standards and be affixed to a permanent foundation as a condition of loan approval. However, the FHA Single Family Loan Handbook, HUD 4000.1, does not address the condition of add-ons, improvements, or other modifications that happen after the loan has closed. A borrower | more...