Articles Tagged With: FHA Loan Rules

November 22, 2016

FHA Appraisal Standards In 2017

If you are house hunting at the tail end of 2016 but don’t have a house selected yet, chances are good you’ll be very interested in learning about loan requirements and FHA appraisal standards for 2017. What does the FHA do on a yearly basis that can affect the appraisal process? After all, FHA loan limits for 2017 will be published soon, and the agency does do a review of market conditions in order to set and/or maintain those limits. What about appraisal rules? The truth is, FHA appraisals are a set of standards that basically get changed when they are required to because of new laws, changes in housing standards, or other factors. There is no need to revise FHA appraisal rules on a yearly basis; changes come when | more...

November 21, 2016

Occupancy, and First Time Home Buyers

By Bruce Reichstein

Do FHA loans favor first time borrowers? How do occupancy rules affect the FHA mortgage transaction? These issues are key in a recent reader question we answered in the comments section. A reader asks, ” I have never purchased a home and would like to purchase a Town House in Pompano Beach, FL located minutes from both of (family’s) places of employment and continue visiting with them as long as I like. We can share the mortgage cost and living expenses in Florida and I can keep the home that was gifted to me here in Detroit, MI. until it sells at a decent price. They will inherit all that I have and have invested in upon my demise so how can I qualify for an FHA first time buyer | more...

November 15, 2016

FHA Refinance Loans and HECM Reverse Mortgages

By Joe Wallace

There are two types of FHA loans borrowers should know about when considering their refinance loan options. One is a traditional cash-out or no cash-out refinance loan, and the other is a reverse mortgage, also known as an FHA HECM loan. HECM stands for Home Equity Conversion Mortgage. The standard refinance loan and FHA HECM options are very different and serve different needs, but depending on the borrower it may be good to be familiar with both. Typical FHA refinance loans involve situations where the borrower typically has an existing mortgage and applies for a new loan that pays off the original mortgage, creating a brand new monthly payment, loan term, etc. Depending on the terms of the loan cash back may or may not happen, but for cash-out refinancing | more...

FHA Loans And Natural Disasters: What You Should Know

November 15, 2016

FHA Loans And Debt: A Student Loan Question

By Joe Wallace

A reader asks, “I am a mother who is on a fixed income of $1600.00 a month in ft laud. my son is going to be the co borrower who lives and works in LA. Makes a good salary. We already got pre-qualified up to 300k, our credit score is above 680…question is my son has student loan of 33k and is in forbearance until next year. Will this be a problem with (an) FHA loan?” FHA loan rules in HUD 4000.1 instruct the lender on how to view debt, debt ratios, and the kinds of debt known as “deferred obligations” which may not affect the borrower’s debt to income ratio in the short term, but can do so after a home loan has closed. Sometimes, FHA loan approval may | more...

November 9, 2016

FHA Loan Options: What You Should Know

By Joe Wallace

Are you thinking about purchasing a home? Or refinancing your current home loan? FHA mortgage loans and refinance loans offer a variety of options. For new purchases, an FHA mortgage loan allows qualified borrowers to purchase typical suburban homes, but also condo units, town homes, and manufactured homes. Any property that has a permanent foundation or will be affixed to a permanent foundation at closing time may be eligible for an FHA mortgage. (All homes considered for purchase with an FHA loan are subject to an appraisal and must meet basic FHA standards.) Heading 2 For new purchase loans, borrowers can choose a fixed interest rate mortgage or an adjustable rate loan. Borrowers who choose adjustable rate mortgages will be offered an introductory rate, and overall your FICO scores and | more...

November 8, 2016

Divorce and FHA Loan Applications

By Joe Wallace

FICO scores, debt-to-income ratios, and credit history aren’t the only things that can factor in when the lender is gathering data from your FHA mortgage loan application. Borrowers who are divorced may experience additional requests from the lender for paperwork or supporting documentation. We get questions about issues like these quite frequently. Here’s one recent example from the comments section: “Legally divorced in SC for close to seven years. There was no alimony, no children, and bills were split. The underwriters for an FHA re-finance are demanding a copy of the Separate Maintenance and Property agreement filed at the time of separation, a full year and a half before the divorce. I dont have a copy of it, so I have to either buy one online or miss a days | more...

Buying A Fixer-Upper With An FHA 203(k) Rehab Loan

November 4, 2016

High Voltage Lines and FHA Loans

By Joe Wallace

A reader asked a question recently about high voltage transmission lines and the FHA loan rules that address them in relation to the property to be purchased with an FHA mortgage. “I am looking to find info regarding High Voltage Transmission Lines. I know that in 4150.2 that it clearly states that the dwelling or other improvements can not be within the fall zone. However I am not locating this info in more updated references. Can you help with me finding this info?” FHA loan rules were updated in HUD 4000.1, and have since replaced many older references. According to the FHA/HUD official site, “The Federal Housing Administrations (FHA) Single Family Housing Policy Handbook 4000.1 (SF Handbook) is a consolidated, consistent, and comprehensive source of FHA Single Family Housing policy”. | more...

November 2, 2016

Down Payment Rules: An FHA Loan Question

By Joe Wallace

A reader asks, “I’m buying a home for 160,000 and the seller is paying up to 4000 in closing costs and pre-paids (which the closing cost ended up only being 3,525 because the lender required me to pay for the appraisal outside of closing POC) I also put 500 earnest money down.” “They are telling me that I have to bring 5,100 to closing instead of 4,625 because they said that I have to bring a total of 3.5% (5600) and the 475 that I already prepaid can not go towards my total 3.5% down. I thought that because I put 500 earnest money deposit and paid for the appraisal outside of closing and the seller is paying for all my closing costs, that I would be able to use | more...

November 1, 2016

Employment: FHA Loan Rules

By Joe Wallace

A reader asks, “I am planning to apply for a home loan, in the next couple months. I am a recent college graduate that has been employed at my current job since May 2016 (just about 6 months). I am planning to buy a house for no more than $110,000, with a $8000 down payment. Will my lack of experience stop me from getting a home loan?” It’s true that in addition to FICO scores and credit history, there are also FHA guidelines for employment and income. In general, FHA loan rules require the lender to either verify two years of employment history or provide alternate documentation of either school enrollment or military service. According to HUD 4000.1, “The Mortgagee must obtain the most recent pay stub and one of | more...

October 31, 2016

FHA Loan Rules: Commuting Distance

By Joe Wallace

A reader asks, “We are trying to get a loan and the lender is claiming that the requirements say she cant commute for two hours one way to work..My wife is the qualifying buyer and I have never heard of such a thing.. Is this discrimination cause she is a woman? They want verification from transfer store that wife will get same pay when transferred too. This would cause grief at current employment because they would not want to see her go. We do not want to do anything like that, transfer, until loan is finalized.. this all came up the day we were supposed to close…seems like discrimination, time to call a lawyer?” Let’s work backwards on this reader question from the last issue to the first; FHA loan | more...