Articles Tagged With: FHA Loan Rules

March 3, 2015

FHA Mortgage Rate Trends: Moving Higher

It looks like an upward trend for mortgage loan rates in general at the time of this writing–we’re seeing some volatility in the rates that might be likely to continue thanks to some anticipated data releases later this week that have potential to move rates higher (based on investor reaction to those reports) including a jobs report and a Non-Farm Payroll report. If rates do move higher in the wake of events like these they could move quickly–some market watchers say if you can’t handle the risk of the rates moving suddenly upward, locking in a mortgage loan rate is a good idea. How are the rates doing? 30-year fixed rate conventional mortgages are edging closer to 4.0% territory–some say the 30-year fixed rates are, best execution, the highest they’ve | more...

March 2, 2015

FHA Loans, Missed Payments, and Your Mortgage

By Joe Wallace

FHA borrowers who get in trouble on their FHA mortgages are urged to be proactive about their situation in order to avoid defaulting on the FHA loan and risking foreclosure. The FHA has help available starting with advice for borrowers in this situation–you can find this advice on the FHA official site at http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure . But the FHA has also issued guidance to lenders and loan officers telling financial institutions what the government expects the lender to do in cases where the borrower becomes delinquent on the FHA mortgage loan. Case in point, the recent FHA mortgagee letter titled, “Revised Notification to Homeowners of Availability of Housing Counseling Services”. According to this mortgagee letter, dated February 4 2015, “Mortgagees must provide delinquent borrowers with a notice describing the availability of housing | more...

February 27, 2015

FHA Loan Debt To Income Ratios

By Joe Wallace

A reader asks, “Hi. My wife and I are planning to buy a house. My wife has a stable job for six years as registered nurse and I is currently a homemaker. Both of us has credit score of 720+ and we never missed a single payment in our credit cards and personal loans. What is our chance to be approved if our debt to income ratio is 49%? Can we qualify for a “no-conforming loan”? (Loan amount is $225,000, please note that mortgage interest, principal, taxes, insurance, HOA fee are already included in the DTI.” According to the FHA official site, many FHA loans are underwritten via an automated system. Here’s a quote from an FHA mortgagee letter from 2013 which announced changes to when and how a lender | more...

February 26, 2015

FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I am working with a home that was built in 1946. The crawl space clearance under the home is suppose to be by FHA standards 18 inches. This home only has 12 to 15 inches. It is not possible to get the dirt out from under this house to meet the requirement. Is there a chance they would waiver this requirement and if so who would I need to contact?” A HUD publication for single family home appraisers mentions the following in relation to the reader’s question: “A minimum distance of 18 inches from the ground to bottom of the joists is highly recommended but not mandated.” The appraiser will enter the crawl space (at a minimum entry of the head and shoulders) to observe conditions except | more...

February 25, 2015

FHA Loan Rules: Income Limits, Loan Limits

By Joe Wallace

A reader asks, “Can a 68 year old retired person qualify for an fha loan and what is the dollar limit?” FHA loan rules do not specify an age limit or an income limit. FHA home loans are for any qualified borrower who meets the FHA loan program minimum FICO score standards as well as (possibly higher) lender FICO score standards. There’s no minimum or maximum income requirement–instead, the borrower’s debt-to-income ratio is examined to see if she or he can afford the new loan. This means that a borrower who seems to have a low income but can afford both existing monthly payments and the proposed new FHA home loan may be eligible for loan approval as long as they otherwise qualify with FICO scores, good loan repayment history, | more...

February 24, 2015

FHA/HUD Issues More Guidance On Equal Access Rules

By Joe Wallace

We’ve seen a number of headlines recently on the FHA and HUD’s position on Equal Access laws. Now there is additional guidance coming on the heels of what’s already been released. On Monday, February 23 2015 the FHA and HUD issued a new press release announcing further clarification of its Equal Access rules which prohibit discrimination based on sexual identity, gender identity and related factors. According to HUDNo.15-023, “The U.S. Department of Housing and Urban Development (HUD) issued guidance to better serve LGBT Americans seeking to obtain a home loan and transgender individuals seeking access to homeless shelters. These two sets of guidance will help clarify the Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Rule (Equal Access Rule), which was published in 2012. | more...

February 23, 2015

What Is The FHA 203b Loan? A Reader Question

By Joe Wallace

A reader asks, “We are looking to purchase a HUD house that needs a lot of work– sewer system, plumbing, ceilings repaired. The electrical seems to be ok. Would an FHA 203b loan be available in addition to the traditional FHA loan? If the 203b is available, how does it work in terms of repayment?” The FHA/HUD official site says this about the FHA 203b loan: “What is the purpose of this program? To provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. What are the eligibility requirements? The borrower must meet standard FHA credit qualifications. The borrower is eligible | more...

February 23, 2015

Getting Started With FHA Loans: A Reader Question

By Joe Wallace

A reader asks, “Im interested about information about FHA im a single mother also wanted to know if any help for military Mom my son is sergeant in the Marines im tired of living in apartment please help.” We get many comments/questions just like this and in every case our answer is the same–there is definitely help available from the FHA, and they do have programs designed to assist newcomers to the FHA loan process. The FHA official site is a great place to begin–consider what the FHA loan official site says about getting started with an FHA loan on the page titled, “Let FHA Help You”: “FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) – which is | more...

February 20, 2015

FHA Loan Rules Following Short Sales: A Reader Question

By Joe Wallace

A reader asks, “We (had a)Bankruptcy and then a short sale 2 years later. We never re-affirmed the mortgage but it was sold to another company. The original lender reported us discharged, no late payments, but the second company reports us 60 days delinquent, settled for less than owed. When can we apply for a new mortgage? Do we go from the Bankruptcy discharge or the short sale? Do we qualify for the “no late payments” program with less waiting time? We can’t get anyone to give us a straight answer.” The answer may depend on lender standards. FHA loan rules do permit a borrower to apply for a new loan following a short sale depending on circumstances but being current on the mortgage loan at the time of the | more...

February 20, 2015

FHA Equal Access Loan Rules Updated

By Joe Wallace

In recent weeks, we’ve reported on the FHA and HUD’s update to Equal Access guidelines as listed in FHA Mortgagee Letter 2015-05. One important area of that mortgagee letter we haven’t written about yet is the FHA and HUD’s authority for changing its Equal Access rules. To review, ML 2015-05 was issued to update its rules for Equal Access for all regardless of sexual orientation or gender identity. According to the mortgagee letter: “On February 3, 2012, HUD published a final rule entitled Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity (77 FR 5662) (“Equal Access Rule or “rule”). The final rule ensures that housing across HUD programs are open to all eligible individuals regardless of actual or perceived sexual orientation, gender identity, or | more...