Articles Tagged With: FHA Loan Rules

What you should know about FHA 203(h) Loans For Disaster Victims

February 10, 2015

FHA Loan Questions: Minimum Income Requirements

A reader asks, “Hello just want to know how much do my annual gross amount have to be to get approved for a FHA loan?” Two of the most common myths about FHA home loans are that the FHA is only for first-time homebuyers and that FHA loans have a minimum income or maximum income requirement. None of those things are true. The FHA does not have a minimum dollar amount the borrower must earn in order to qualify, and there is no income ceiling or limit for FHA loans. FHA loans are not specifically for disadvantaged people, nor are they specifically for first time home buyers. However, it’s important for all potential FHA borrowers to know that your lender will determine whether or not you can afford the new | more...

February 10, 2015

FHA Loan Reader Questions: FHA Loans After A Short Sale

By Joe Wallace

A reader asks, “We had a job loss and were working on a loan modification that was supposedly going to be approved and was then denied. We filed and were discharged from CH 7 back in 2010, never reaffirmed the mortgage, but paid on it until it was obvious we were not going to get any cooperation from the lender. Moved out and short sold in May 2013 and are now looking to buy again.” “What is the FHA standard for the downpayment we’d have to make? We have been told 20%, but read elsewhere that for a mortgage that was discharged in bankruptcy and never reaffirmed, that the applicable period for any wait time is the date of the bankruptcy discharge and not the date of the short sale? | more...

February 9, 2015

FHA Loans and Wage Garnishment: A Reader Question

By Joe Wallace

A reader asks, “if I have state taxes being taken out of my check as a garnishment will that disqualify me for FHA loan?” FHA loan rules found in HUD 4155.1 Chapter Four address delinquent federal taxes in association with an FHA loan, but not state taxes specifically. However, we can get an idea of the FHA’s position on this issue by reading what it has to say about a borrower who may be delinquent on federal taxes: From Chapter Four of HUD 4155.1: “If, after checking public records, credit information or CAIVRS, a borrower is found to be presently delinquent on any Federal debt or has had a lien (including taxes) placed against his/her property for a debt owed to the Federal government, he/she is not eligible for an | more...

February 7, 2015

FHA Loans and Identity Theft Issues: A Reader Question

By Joe Wallace

A reader asks, “We have applied for a FHA loan and until yesterday, had no idea that that someone had filed a tax return under my social security number back in 2012. I have submitted the proper forms to the IRS, and they have my accurate 2012 tax return on file. Because I submitted the tax return late, I have never been contacted by the IRS regarding this.” “It was not until I called to set up a payment program for the taxes that I owe, that it was brought to my attention. Is this a 100% deal breaker for the loan, if my account is under review for identity theft? Can the underwriters still get the tax information that they need or is all my information frozen? I am | more...

February 6, 2015

FHA Loan Reader Questions: Seasoning Period Following Foreclosure

By Joe Wallace

A reader contacted us with a lengthy question about FHA home loans following a foreclosure. Here’s the question: “Are there any new rules as it relates to months required with a foreclosure expected in 2015? I had the same situation in which in my bankruptcy was my current house we had purchased after going through a divorce and loosing my employment. On my credit report it clearly shows that the loan to that property was part of the bankruptcy and was discharged Sept 13,2010. I am trying to refinance with my current husband under an FHA Loan and I have gone to multiple lenders and once all is reviewed they come back with the same response that since my deed to the property we included in the bankruptcy did not | more...

February 5, 2015

FHA Loan Rules For New Loans Following Chapter 7

By Joe Wallace

A reader asks, “In june 2015, i will have two years post bankruptcy, chapter 7. I want to purchase a home, first time buyer, credit score of 710, my question is, Am I able to start the process now, or should i wait the two full year mark? ( I was told this by a mortgage rep that fha requires two full years post bk) .” The FHA official site has a FAQ page about FHA loans after a Chapter 7 bankruptcy proceeding. It says: “A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA mortgage if at least two years have elapsed since the date of the discharge of the bankruptcy.” The reader’s comment about the two year waiting period is correct, based on the | more...

February 4, 2015

FHA Loan Rules On Giving Personal Property To The Buyer

By Joe Wallace

Sometimes when a borrower purchases a home, the seller will offer to to throw in some types of personal property as part of the deal. Knowing that the FHA has strict rules on something known as “inducements to purchase”, does the FHA allow or deny sellers to offer personal property to sweeten the real estate deal? An inducement to purchase is when the seller offers to pay certain expenses on behalf of the borrower that exceed six percent of the sales price or appraised value (whichever one is lower). But offering property isn’t the same as paying in the eyes of some–does that mean the property is exempt from inducements to purchase regulations? The answer to this question can be found in HUD 4155.1, Chapter Two, Section A. That part | more...

February 4, 2015

FHA Loan Reader Questions: Help With an Existing FHA Mortgage

By Joe Wallace

We get many questions about FHA home loans. Some of them come in the form of detailed queries about specifics of a certain FHA loan program, others come as more general questions about the nature or scope of FHA home loans. Here’s one of the more generalized questions that came in recently. A reader asks: “What about help with a current FHA loan? Remodification?” It’s not clear what the reader is getting at with this question, but assuming the reader wants assistance with an existing FHA loan in order to get into a lower monthly payment, the good news is that there is definitely assistance available in the form of FHA Streamline Refinancing. FHA Streamline refinance loans are for borrowers with existing FHA mortgages who want a lower interest rate, | more...

February 3, 2015

FHA Loan Rules For Non-Occupying Co-Borrowers

By Joe Wallace

The FHA single family home loan program has an occupancy requirement which states that the borrower must intend to live in the home to be purchased with the FHA loan as his or her main residence. But there are also provisions for FHA loans that feature more than one borrower–a “non-occupying co-borrower” who signs the mortgage loan paperwork but does not move in along with the primary borrower and occupant of the home. FHA loan rules say that there is a limit on loans like these in certain cases–in general the borrower will be required to make a 25% down payment on the property as the FHA loan maximum mortgage amount is limited to 75% of the loan-to-value amount. According to HUD 4155.1, FHA loans say specifically: “When there are | more...

February 2, 2015

HUD/FHA Alters HECM Foreclosure Options

By Joe Wallace

The FHA and HUD have issued a press release announcing new options to avoid foreclosure on HECM homes in cases where the “last surviving borrower” dies but a non-borrowing surviving spouse still occupies the home. According to HUDNo.15-010, the FHA has issued a new policy, “under its Home Equity Conversion Mortgage (HECM) Program giving FHA-approved lenders the option to delay calling HECMs with eligible ‘non-borrowing spouses’ due and payable.” According to the press release, a delay would postpone foreclosure, “normally triggered by the death of the last surviving borrower. FHA’s new guidance will allow reverse mortgage lenders to assign eligible HECMs to HUD upon the death of the last surviving borrowing spouse, thereby allowing eligible surviving spouses the opportunity to remain in the home despite their non-borrowing status.” Last year, | more...