Articles Tagged With: FHA Loan Rules

February 19, 2015

Is It Too Early To Apply For A New FHA Loan? A Reader Question

A reader asks, “We Were discharged and our chapter 13 was completed in Dec of 2014… Our Credit scores are already in the 700′s and we want to sell our current home (never a late payment) and purchase another with a huge down payment from the equity in our current home + some savings. Is it to early to apply for a FHA Loan?” FHA loan rules say that in general, a lender may consider a borrower for a new FHA home loan following a Chapter 13 bankruptcy IF the borrower has made reliable payments on the plan created by the Chapter 13 bankruptcy for a period of one year. Eligibility is not automatic–those payments must be verified and the applicant must have written permission from the court to apply | more...

February 18, 2015

FHA Loan Facts

By Joe Wallace

There are plenty of myths about FHA home loans–it’s easy to misunderstand parts of this important loan program if you’re new to it, but knowing some basic facts can help you better understand what an FHA home loan has to offer you compared to conventional mortgage loans. Fact: FHA loans are NOT just for first-time home buyers. FHA loans don’t provide any advantage or disadvantage to a loan applicant based on your status as a first-time home buyer or first-time FHA borrower. All qualified borrowers are eligible for the same types of FHA loan programs. Your interest rate and other terms may vary depending on your financial qualifications. Fact: FHA loans have no income limit. Some people assume that FHA home loans are intended for financially disadvantaged borrowers, but this | more...

February 18, 2015

FHA Loans and Other Major Credit Applications: A Reader Question

By Joe Wallace

A reader asks, “I was hoping to get an FHA loan but I was wondering if my father could cosign? I was also wondering if it would be feasible of me to get a new car. (My current vehicle is giving me serious problems)” FHA loans do permit non-occupying co-borrowers and co-signers. Talk to your loan officer about lender standards in this area, but in general when a family member co-signs or co-borrows there are procedures and considerations. FHA loan rules say that in cases where the LTV exceeds 75%, a loan with a non-occupying co-borrower is limited to a single unit property. The other part of the reader question isn’t quite clear–is the reader asking if the FHA loan can include the purchase of a vehicle? The answer is | more...

February 17, 2015

FHA Loan Questions: “Substitute Forms of Credit”?

By Joe Wallace

A reader asks, “My question is what would be a substitute form of credit?” Since this question was asked in response to our blog post, “FHA Loan Credit Report Rules”, it’s probably safe to assume the reader is asking whether the FHA will permit the lender to consider alternative credit or non-traditional forms of credit in cases where the borrower has either no credit history, or a lack of traditional credit. From our original post: “HUD 4155.1 Chapter One has rules and instructions for the lender in these areas. Under “Required Credit Information” we find the following: “A credit report submitted with a loan application must contain all credit information available in the accessed repositories. Additionally, for each borrower responsible for the debt, the report must contain all of the | more...

February 17, 2015

FHA Loan Questions: Student Loans, Delinquency, and Credit Reports

By Joe Wallace

A reader asks, “I co signed a student loan in 2004 and the student loan went delinquent on February 2008. When will it come off my credit report? And will I be able to apply for a fha loan after it comes off?” To get the answer about when a student loan delinquency might come off a credit report, the reader will need to contact the credit reporting agencies to see what standards may apply. There are three major credit reporting agencies and a potential borrower would need to contact all three. The agencies are Equifax, Experian, and TransUnion. If the borrower’s credit rating is sufficient, and the derogatory credit information no longer shows up on the credit report, it’s entirely possible that the borrower might be able to successfully | more...

February 14, 2015

FHA/HUD Update Housing Counseling Requirements

By Joe Wallace

The FHA and HUD have issued a Mortgagee Letter updating housing counseling requirements for borrowers who may face delinquency on an FHA home loan. According to FHA Mortgagee Letter 2015-4, ‘Revised Notification to Homeowners of Availability of Housing Counseling Services”, there is updated content and, “a model template for the notice of the availability of HUD-approved housing counseling.” “The ‘Notification to Homeowners of Availability of Housing Counseling Services’ provides a description of the potential services and benefits of housing counseling to delinquent borrowers.” According to the mortgagee letter, lenders must provide delinquent borrowers, “with a notice describing the availability of housing counseling offered by HUD-approved housing counseling agencies and by the mortgagee.” According to the FHA official site, lenders are “currently required to prepare such a notice that provides the | more...

February 13, 2015

FHA Loans For Properties Served By Cisterns: A Reader Question

By Joe Wallace

A reader asks, “How do we get a fha loan for homes on cisterns, They are common for our area 81082. Can they be certified and inspected and to what standard? and by who?” This reader question comes in response in the comments section to an earlier post we wrote titled, FHA Loan Reader Questions: Cisterns which includes the following information: “FHA loan rules state that a cistern–basically a water tank using the classic definition of the word–is unacceptable. However, in certain cases a waiver may be applied for in situations the FHA defines as those where cistern use is common.” “Such waivers are not automatic and a borrower in need of such a waiver should call the FHA at 1-800 CALL FHA to learn how to apply, or discuss | more...

February 13, 2015

FHA Loan Questions: Late Payments

By Joe Wallace

A reader asks, “As a co-borrower on a home for my daughter-in-law, I was never notified by the mortgage company that loan was late. DIL told that as long as she was in repayment, they would not report late. What do I do?” FHA loan rules can’t address all circumstances, and there are some areas involving an FHA loan that depend strictly on the arrangements made between the borrowers and the lender. When it comes to co-borrowing, any occupying or non-occupying co-borrower who needs to be kept in the loop with regard to the status of the mortgage (payments made, payments missed, etc) may need to make prior arrangements with the lender. This may be crucial when it comes to late or missed payments–how is the co-borrower to know the | more...

February 12, 2015

FHA Loan Minimum Property Requirements: Tripping Hazards On The Property

By Joe Wallace

A reader asks, “What are regulations on trip hazards? I have a listing where the tree roots lifted up the driveway quite a bit. The tree has been removed, but roots and buckled blacktop drive still there.” FHA minimum property requirements don’t cover each and every situation where corrections might need to be made to the property in order for it to meet standards–in many cases the FHA minimum requirement includes a general rule that may be reinforced by state and/or local building code. According to the FHA/HUD official site, “HUD requires that each property insured with an FHA mortgage meet one of the nationally recognized building codes or a State or local building code based on a nationally recognized building code. In areas where such State or local codes | more...

February 11, 2015

FHA/HUD Update “Equal Access” Rules

By Joe Wallace

The FHA and HUD have issued a new mortgagee letter updating the FHA/HUD policy of equal access for all FHA/HUD programs. FHA Mortgagee Letter 2015-05, “Notice of Program Eligibility for HUD Insured Housing Programs for All People Regardless of Sexual Orientation, Gender Identity or Marital Status as Required by HUD’s Equal Access Rule” contains some very important updates since the original equal access guidelines were published back in 2012. 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 FR5662) (“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...