Articles Tagged With: FHA Loan Rules

April 16, 2015

FHA Loan Rules For Single Family Homes: What You Can and Cannot Buy

How much do you know about buying a home with an FHA mortgage? Do you know the kinds of property you can and cannot buy with an FHA loan? Here is a little list of what’s possible and what’s not. As you read about what you are permitted to buy with an FHA mortgage, remember that not all lenders offer all types of FHA home loans. You may find some lenders who do not issue FHA loans on mobile homes, others who may have higher FICO and other credit qualifying standards for the homes they do offer mortgage loans for, etc. Always compare lenders and shop around for the best deal. “Existing Construction” Homes An existing construction home is, as the name implies, one that has already been built. Existing | more...

April 16, 2015

FHA Loans and the Back To Work Program: A Reader Question

By Joe Wallace

A reader asks, “I filed Chapter 7 due to an increase in family size, from 4 to 9. My pay was gone before it hit the bank to pay bills & buy extra food. At the time I filed my credit score was a 680, no late payments. I now want/need to buy a home for me to live in I have a full time job. I kept one creditor & just purchased a new car to get to work. No late payments, will that qualify for the back to work program? I’m not looking to purchase anything out of my comfort zone.” The FHA Back to Work Program is something that may or may not be offered by participating FHA lenders; borrowers need to shop around for a lender | more...

April 14, 2015

FHA Home Loans, Mortgage Debt Cancellation, And Tax Time

By Joe Wallace

April 15th, the tax deadline, is very near, but many people choose to apply to get an extension so they can file their taxes later in the year. If you haven’t completed your taxes for 2014 and are considering an extension, there is some very helpful information about home loans, home loan debt and related issues that may affect those who have FHA home loans or refinance loans. One important issue many borrowers have had to face in recent years is the tax consequences from a home loan modification or similar alteration to a mortgage where part of the debt is forgiven, cancelled, or written off by the lender. What follows is not tax advice, we are simply quoting what’s printed on the IRS official site. If you have tax | more...

April 14, 2015

FHA Loan Rules For Commission Income: Another Reader Question

By Joe Wallace

A reader asks, “What if a person went from a commission based job as a loan officer to a salary plus commission job as a Mortgage Loan Manager? Would the salary still be averaged over 2 years?” This question is in reference to an earlier post we did back in 2013, which was titled, “FHA Loans and Commission Income: A Reader Question”. In that blog post, we answered a reader who asked us, “Is it true that if you work in a job where your pay is based on commission you have to be with your current employer for at least one year to obtain a FHA loan, even if your prior job was in the same line of work and was also a commission paying job?” The answer we | more...

April 13, 2015

FHA Loan Refinance Rules: A Reader Question

By Joe Wallace

A reader asks, “Hello.. i have a question. We are first time home buyer through FHA loan. How long we can refinance after our purchase?“ The FHA issued a mortgagee letter back in 2011 updating its policies for minimum wait times or seasoning period for borrowers to refinance after the original purchase. The minimum wait time may vary depending on the lender, the type of refinance loan you want to apply for, and other factors. For example, a borrower applying for FHA Streamline Refinance Loans, according to FHA Mortgagee Letter 2011-11, is subject to the following requirements: – The mortgagor must have made at least six payments on the FHA- insured mortgage that is being refinanced, and – At least six full months must have passed since the first payment | more...

April 11, 2015

FHA Appraisals Versus Home Inspections: Part Two

By Joe Wallace

A reader asks, “My follow up question is that I believed that there would be an FHA inspection done and if serious problems or defects are found then the seller would be required to fix the issues. I realize FHA does not “check” for everything so a home inspection is still in order, but has this rule changed?” This is a follow-up to our answer to this reader’s question in our April 3, 2015 post, “Is A Home Ever ‘FHA Approved'” where we answered the original question as follows: “…there is one serious issue raised here that we MUST address–the prevailing misconception some borrowers have that the FHA or HUD would ever ‘approve’ a home. Some borrowers mistakenly assume that because a home passes the appraisal process that it is free | more...

April 9, 2015

FHA Cash-Out Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “Our home is in trust, and my mother-in-law has signed a quit claim deed. My husband was in a hit and run motorcycle accident 3 years ago this coming June. Due to his inability to work for 4 months we struggled with payments and our credit is horrible. We would like to get a loan on our house so we can pay off a home equity loan, and multiple collections.” “Our home is valued at approx. $250,000, and we would like to get a loan for half of that so we can get out of debt and make some improvements to our home. My husband has credit scores of Experian 558, Equifax 517, and Transunion 491. Is it possible to find an FHA lender that would be | more...

Can I buy a manufactured home with an FHA loan?

April 8, 2015

Commission Income and FHA Loans: A Reader Question

By Joe Wallace

A reader asks, “If a job has a base pay plus commission on a set sales route, does that have to viewed as a commissioned/self-employment job requiring Tax returns?” Let’s examine the rules for commission income as printed in HUD 4155.1, Chapter Four Section D. Under the section heading titled, “Salary, Wage, and Other Forms of Income”, we learn the following about commission income: “Commission income must be averaged over the previous two years. To qualify with commission income, the borrower must provide • copies of signed tax returns for the last two years, and • the most recent pay stub.” Furthermore, the FHA loan rules in this section address the nature of commission income–how successful is the FHA loan applicant in this area? That is an important factor as | more...

April 8, 2015

FHA Loan FICO Requirements and Occupancy Rules: A Reader Question

By Joe Wallace

A reader asks, “I saw a home I liked far away in another state. I could very easily afford 20% down and also very easily afford the mortgage payments. My problem is that my FICO is probably too low for a conventional loan. I don’t want to be an investor. I just want to live in the house. I can not move to where the house is for two years and I assume it will be off the market by then.” “If I could get the home today, I would be just fine leaving it empty till I could move to that area. I’m pretty sure I could get an FHA loan except for the owner occupancy rule. I would never break the law, but I wonder if the FHA | more...

April 7, 2015

FHA Loans and Verifiable Income Sources: A Reader Question

By Joe Wallace

A reader asks, “I have a notarized agreement with the father of my child to receive a total amount of cash distributed in two or more deposits during the month in my account.” “I receive it on Cash and then I deposited in my bank account. My lender deny me the loan because they need to see the whole amount agreed in only one single deposit. Is that true? How can I properly prove and evidence this income?” It’s important to remember that FHA home loans have two sets of standards which must be followed–basic FHA loan guidelines are one, and participating lender standards are another. Depending on the laws of your state, lender requirements, and other factors, a borrower may find questions such as these tough to get a | more...