Articles Tagged With: FHA Loan Rules

June 8, 2016

FHA Home Loan Interest Rate Questions And Answers

There are many questions about FHA home loans, especially where interest rates are concerned. Do you know how the FHA loan process works when it comes to negotiating rates or choosing a fixed rate or an adjustable rate mortgage loan? Here are some of the most common questions and answers in this area: How does the FHA set interest rates on FHA mortgage loans and refinance loans? In general, the FHA actually does not set or regulate interest rates on FHA home loans. For certain loan products there are restrictions on how interest rates can be changed or modified, and there are rules governing the purchase of discount points in order to lower mortgage loan interest rates. But the rates for an FHA mortgage are negotiated between the lender and | more...

June 7, 2016

FHA Loan Questions: Switching To Commission Income

By Joe Wallace

A reader got in touch with us to ask a question about how the FHA views commission income. This question came in response to an older blog post from 2013, well before the FHA and HUD switched over to the new FHA loan rulebook, HUD 4000.1: “I have currently been employed with the same company and same job title for 7 years, I have the opportunity to switch from an hourly wage to a commission percentage but still keep my same job at the same place.I will make a lot more. How will switching to commission affect my approval for a home mortgage? I plan on buying next year maybe a little sooner.” FHA loan rules for verification of commission income are clear. HUD 4000.1 starts off by defining commissions | more...

June 6, 2016

Questions And Answers About FHA Refinance Loans

By Joe Wallace

Refinancing a home loan can be just as big a decision as the original purchase of the home itself. It’s always a good idea to take extra time to plan, budget, and save up for any major loan, and a refinance loan is no exception. If you are considering your options for a home loan refinance, there are likely a number of questions you need answered as you prepare for the new loan. Here is a list of some common questions about FHA refinance loans that can help you get ready for your application. What refinance loan options are available from the FHA? FHA refinance loan options include cash-out and non-cash out refinancing. You can also apply for an FHA Streamline Refinance loan which uses your original application data in | more...

June 3, 2016

FHA Loan Questions and Answers

By Joe Wallace

Tired of renting and looking to purchase a home of your own? There are many questions many first time home buyers or first time FHA loan applicants have. Here is a list of some of the most frequently asked questions about FHA mortgages. Is There An Income Limit For FHA Loans? No. FHA mortgages are not designed specifically for one type of financial situation or another. You cannot “earn too much” with the FHA single family home loan program. All wage earners are encouraged to explore their FHA loan options. Is There A First-Time Home Buyer Advantage Or Preference With FHA Mortgages? While an individual lender may offer certain perks for first-time home buyers, the FHA single family home loan program itself does not have a first time home buyer | more...

June 3, 2016

June Is National Home Ownership Month

By Joe Wallace

HUD announced National Home Ownership Month this week, and the entire month of June will include special efforts to raise awareness of how “homeownership enhances lives and contributes to thriving communities we call home” according to a HUD press release. ‘Dare to Own the Dream’ is the theme of this year’s campaign, “reinforcing the long-held belief that owning a home remains one of the cornerstones of the American Dream”. According to the press release, a lot of things have changed in the eight years of the Obama administration. “…the nations housing market was in free-fall, unemployment was rising and many families were left feeling trapped and anxious about their mortgages. He immediately took action to address these issues and to protect the middle class. The steps he took helped millions | more...

May 31, 2016

FHA Loan Questions: The Good Neighbor Next Door Program

By Joe Wallace

A reader asked us a question recently in the comments section about the HUD Good Neighbor Next Door program. “I am a 13 year veteran Corrections Officer of the Maryland’s DCSCS and I wanted to inquire as to whether or not I qualified for the Good Neighbor Next Door Program.” The HUD Good Neighbor Next Door program is mentioned on the FHA/HUD official site, which states, “Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your | more...

May 27, 2016

FHA Appraisal Rules For Wells: A Reader Question

By Joe Wallace

A reader got in touch with us recently to take exception to a blog post we wrote in 2011 about FHA loan appraisal rules for sewer and septic systems. In that post, we state, “Sewer systems are not identical, but as long as the system is functioning properly and lives up to local codes, the FHA does not disqualify the home simply because a sewage or septic system isn’t the same as a typical suburban system in a metropolitan area.” The reader replies, “No, that is not true. FHA has own guidelines, they do not go by the state and local guidelines. We were set to close on a brand new home, we had a well inspection and water test which all complied with local guidelines and 3 days before | more...

May 24, 2016

FHA Loans: The Importance of a Home Inspection

By Joe Wallace

From time to time we handle reader questions asking about defects in homes discovered after purchase. When applying for an FHA home loan, an FHA appraisal is a requirement for loan approval, but a home inspection is an option the borrower is free to use (or not). But this “option” is an investment no borrower should skip, as FHA appraisals are not a guarantee that a property is free from defects or problems. One of the most common questions we get asked in this area is, “What can be done about (defective condition X) discovered in my home after my loan closed?” Our answer always involves asking whether the borrower paid for the home inspection or simply relied on the FHA appraisal to indicate that the home was potentially “approved” | more...

May 20, 2016

FHA Appraisal Rules: A Reader Question

By Joe Wallace

A reader got in touch with us recently to ask a question about wells and FHA loan approval. “Is a flow test required on a pre-existing drilled well in order to get financing using FHA? This is in a town where there is no public water and a drilled well is the normal. Well has passed all other test to determine all health safety and has been approved by the FHA appraiser.” FHA loan rules state that “Wells must deliver water flow of five gallons per minute over at least a four-hour period”. Furthermore, “The Mortgagee must ensure that new wells are drilled and are no less than 20 feet deep and cased. Casing should be steel or other casing material that is durable, leak-proof, and acceptable to either the | more...

May 19, 2016

FHA Proposes New Rule To Strengthen Reverse Mortgage Program

By Joe Wallace

The FHA has announced a new proposed rule intended to strengthen the Home Equity Conversion Mortgage (HECM) loan program. According to the FHA official site, the proposal would “codify several significant changes to FHAs Home Equity Conversion Mortgage program that were previously issued under the authority granted to HUD in the Housing and Economic Recovery Act of 2008 and the Reverse Mortgage Stabilization Act of 2013, and to make additional regulatory changes”. A press release at FHA.com states the new rule would, once approved, “make certain FHA-insured reverse mortgages remain a viable and sustainable resource for senior homeowners hoping to remain in their homes and age in place.” The agency has spent the last two years working on reforms intended to improve the FHA HECM program. “We’ve gone to great | more...