Articles Tagged With: FHA Loan Rules

May 5, 2015

Are You Ready For An FHA Home Loan?

If you are considering an FHA home loan, are you ready to fill out the paperwork? Here are some important questions to ask if you are considering applying in the near future: What’s My Credit Score? If you don’t know your current credit score, chances are good that you are not prepared to begin filling out FHA loan paperwork. Before you commit to applying for a new home loan, it’s strongly recommended that you pull your most recent credit report, check your FICO scores and see what your lender will see when he or she requests the same information. If you don’t know what the lender will see, find out before the bank does. What Does My Payment Record Look Like? Have you missed ANY payments in the 12 months | more...

May 4, 2015

FHA Loans Vs. “Low Interest Loans”: A Reader Question

By Joe Wallace

A reader asks, “Would I apply for a FHA loan if I was looking for a Disability low interest loan? I am trying to find out for my nephew. Were confused by the wording and there seems to be very little information out there surrounding this benefit.” “I am told you need as little as $500 down but cannot find out whether some or all of the closing cost can be financed in the loan. Thank you in advance for your response. He just attended the counseling seminar but no one there was able to answer my questions. I was the only one there seeking this type of loan so maybe there is not as much need to know about this type of loan.” The FHA single-family loan program does | more...

May 2, 2015

FHA Loan Reader Questions: Septic Tanks, Condo Loan Rules

By Joe Wallace

We have two questions today that are linked by a common answer. The first question: “Isabela, PR (00662). what is HUD/FHA requirement regarding septic tank covered with grass. the complete back yard, including septic tank is covered. I am undergoing a HARP refinance…” The answer to this question depends on what the state/local code requirements are for septic tanks. FHA loan rules include a requirement that septic systems meet the approval of the local authority. If you contact the FHA directly by calling their toll-free number, you will learn that the FHA does not–and cannot–maintain archives of all state and local building codes across the United States. A borrower who needs information like this should contact the local authority to learn what the rules might be. The second reader question: | more...

May 1, 2015

Co-Borrowers and Foreclosure: A Reader Question

By Joe Wallace

A reader asks, “My father purchased a home approx.13 years ago. He became ill in the beginning of 2013 and died the end of 2013. I was the co borrower of the home. I tried to do everything in my power to keep the home but did not receive any help. The help that was available was only for those who had a spouse. The house foreclosed in Sept 2014. I have been without a place to live since then because of the foreclosure being on my credit report. This is the worse I have ever dealt with.” “I have been employed for nearly 19 years. I work hard everyday and now living with my mother because I couldnt save my fathers home after his death. I live in Nashville,TN. | more...

May 1, 2015

FHA Loans For First-Time Home Buyers

By Joe Wallace

A reader asks, “I have a condo that was FHA approved when I bought it 10 years ago, they decide to not continue to participate any more about 5 years ago, all I was able to do was refinance at a lower rate thru streamlining with no money out. I had filed bankruptcy a little over 2 years before I bought it with a FHA loan at 5.5.” “I got my credit score up and have a rate under 4% now by refinancing it thru streamline which the balance can be assumed by someone if they qualify but would have to find the balance else where, what I want to know is that I want to sell my condo and buy a house possibly thru FHA can I buy it | more...

April 30, 2015

“Second” FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I am in the process of selling my home. There was an appraisal done and it came in low. We negotiated with the buyers on that appraisal. Now I am learning they got another appraisal that was higher so they could get a higher loan amount for closing costs but will not provide the appraisal to us.” “By the way, this is FHA and apparently the lender never filed the first appraisal with the FHA. Additionally, the lender has now changed their story stating they paid for the first appraisal and that the buyer paid for the 2nd appraisal and therefore they dont have to give it to us for re-negotiations. This cant be legal? And surely I have recourse? We are set to close tomorrow, and | more...

April 30, 2015

Recent Changes to FHA HECM Due And Payable Rules

By Joe Wallace

Recently the FHA and HUD announced further changes to the FHA Home Equity Conversion Mortgage or HECM loan program. There have been a number of alterations and adjustments to the FHA HECM loan program in the last year or so, and the new changes further clarify the rules for certain aspects of the HECM program. In this case many of the rule changes have to do with the procedures for declaring a HECM loan due and payable. According to FHA Mortgagee Letter 2015-10, “For HECMs that are due and payable, the Due Date is the date when: –the mortgagee notifies the Secretary that the mortgage became due and payable without HUDs approval; or–the Secretary approves the mortgagees request to call the mortgage due and payable. For HECMs with a Case | more...

What happens to my FHA loan in a natural disaster?

April 29, 2015

FHA Streamline Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “If I need to refinance to remove my ex-husband from my mortgage loan, and he has already signed the quit-claim and put the mortgage in my name only. Do I have to meet the normal 5% payment reduction requirement for the Net Tangible Benefit?” The borrower does not specify whether the refinance loan is an FHA Streamline Refinance loan or a cash out loan, but since this comment was on a post we did on FHA Streamline refinance loans, we’ll assume that’s the loan being asked about. FHA Streamline loans do require a “net tangible benefit” to the borrower as described in HUD 4155.1. That benefit could be a lower monthly payment, lower interest rates, or the fact that the borrower is refinancing from an Adjustable Rate | more...

April 28, 2015

FHA Mortgage Rate Trends: Higher Ahead Of Fed Announcement

By Joe Wallace

Mortgage loan rates shot up to highs we haven’t seen in around a month–Tuesday rates pushed higher ahead of two important economic data releases on Wednesday that have potential to push mortgage loan rates in one direction or the other depending on investor reaction to the contents of those releases. Wednesday morning sees the release of numbers from the first quarter Gross Domestic Product report (in the morning) and an announcement from the Fed (in the afternoon). The Fed event will be watched carefully as markets will react to any news that indicates whether or not the Fed intends to raise interest rates. That would have an effect, depending on how investors respond to the information, of pressuring rates higher or giving them a chance to recover from today’s move | more...

April 27, 2015

FHA Loan Rules For Co-Borrowers: A Reader Question

By Joe Wallace

A reader asks, “In the case of two names on the deed (only one will be living in the home), are both incomes & debts considered for debt to income ratios?. Also is it required the mortgage co. listed on both of their Home owner Insurance?.” There are many issues that can affect the answer to this question. Are the two people married? Related by blood, marriage, or a family-type relationship? These are important issues that can affect how much the FHA is willing to guarantee on the loan and how much down payment is required. Also, state laws may affect how such a transaction is carried out, especially if the people buying the home are legally married. Community property states may have laws that govern how a lender is | more...