Articles Tagged With: FHA Loan Rules

January 15, 2015

FHA Loan MIP Rules: A Reader Question

A reader asks, “When calculating the annual PMI, are the bps assessed against the original loan amount or the current pay-off amount of the loan?” Assuming the reader is asking about annual FHA Mortgage Insurance Premiums, and not monthly Private Mortgage Insurance, it’s important to know the following: When the FHA and HUD announced a reduced annual Mortgage Insurance Premium, it created a table showing how the new Mortgage Insurance Premium (MIP) is calculated. FHA MIP is calculated, according to the FHA/HUD official site, by “amortization term, base loan amount and Loan to Value (LTV) ratio.” Here is the table published by the FHA showing the new FHA MIP rates: As you can see, there is a listing for the previous FHA MIP payment and the new FHA MIP payment. | more...

January 15, 2015

FHA Loan Requirements Post-Bankruptcy: A Reader Question

By Joe Wallace

A reader asks, “We recently went through CH7 BK. We have high 500′s for both of our scores and have no debt besides one student loan at $90.00 a month and two credit cards with $0 balance and no payments due. What would our chances be of obtaining an FHA for first time home buyers. We have $5000 to put down and have a city program that will also help with more $ for closing/down payment. We want to buy in September/October. which would be 10 months after our BK discharge.” There are a variety of issues at work in this reader question that should be addressed. Regardless of the bankruptcy issue, borrowers in general will find lenders requiring FICO scores upward of 620 for FHA home loans. It’s true | more...

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

January 14, 2015

FHA Loan Rules For New Loans Following A Bankruptcy: A Reader Question

By Joe Wallace

A reader asks, “My husband went bankrupt and it was discharged on may 7,2013 since then we have been bringing his credit up to 620 and my score is around 770 my question is on what month or day can we apply for a FHA loan and is our score good enough?” Unfortunately the answers to these questions depend greatly on a number of factors including lender standards. The waiting period following a bankruptcy–how long the borrower must wait before being allowed to apply for a new mortgage–depends on the type of bankruptcy and lender standards. FHA loan rules do provide a minimum waiting time depending on the type of bankruptcy, but these wait times are also dependent on circumstances. For example, here are the FHA loan rules for Chapter | more...

January 14, 2015

FHA Loan MIP Changes: Does My FHA Home Loan Qualify?

By Joe Wallace

A reader asks, “I just got an FHA loan last May. Do I qualify for a reduction when it happens?” This question comes in reference to our previous blog post discussing the FHA announcement that annual FHA mortgage insurance premiums would be reduced in 2015, amounting to a savings as much as approximately $900 per year (according to a speech by President Barack Obama). Our post, “FHA Announces Mortgage Premium Cut” included the following details on the new FHA policy: “An FHA/HUD press release (HUDNo. 15-001) announced the change, which could take effect as early as the end of the month. According to the release, ‘As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce | more...

January 13, 2015

FHA Loans, Recent Major Credit Purchases, and FICO Scores

By Joe Wallace

A reader asks, “I have a credit score of about 590, have some old stuff on my credit, which has been cleared up but still showing. Im looking for a $100,000 loan and have $8k to put down. I just last week got financed for a newer car, what are the chances I qualify for the FHA program since I am a first time home buyer?” FHA minimum FICO score requirements for maximum financing aren’t necessarily the same as the lender’s minimums–the lender is free to require a FICO score higher than the FHA minimum of 580 for maximum financing on a new purchase FHA mortgage loan. The credit report issue is also something the lender would have to address on a case-by-case basis. Depending on circumstances and the presence | more...

January 13, 2015

FHA Loans And Tax Liens: A Reader Question

By Joe Wallace

A reader asks, “How does FHA view a borrower with an expired tax lien? I was assessed additional taxes as the result of an audit in 1999. In 2005, a Federal tax lien was filed. I recently retained a tax attorney, who has confirmed that the lien was released in 2011 due to expiration/statue of limitations. I would now like to pursue FHA purchase financing. Assuming all other requirements are met, will this expired lien disqualify me?” FHA loan rules do address tax liens–the information can be found in HUD 4155.1. According to Chapter Four: “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 | more...

January 12, 2015

FHA Loan Application Requirements: A Reader Question

By Joe Wallace

A reader asks, “My husband and I are trying to pay off debt and raise our credit scores to buy a home. Is there a program to help with a down payment? What are the steps needed to get approved for fha loan?” The FHA itself does not provide a downpayment assistance program, but one may be available at a state or local agency. The FHA does have a list of state information that can help you learn what home buyer/home ownership resources might be available near you. You can look up this list at http://portal.hud.gov/hudportal/HUD?src=/states. Steps to an FHA home loan include planning and preparation–you should research the housing market where you want to purchase the home, examine homes for sale you want to purchase and other steps, but one | more...

January 9, 2015

FHA Mortgage Loan Applications: A Reader Question

By Joe Wallace

A reader asks, “My husband and I live in Texas and want to buy a home. My husband makes around $40,000 a year and has decent credit. I am self employed so my tax return shows I only make around 25,000 a year after deductions. All of the debts are in my name and I have the better credit score. My question is, wouldn’t it be better to put the home loan in his name only being that he has no debt? Can we get an FHA loan in his name only?” It’s true that FHA loan rules differ for self-employed borrowers. You may be required to furnish additional documentation along with the usual FHA loan paperwork–profit and loss statements, business tax documents, anything that can show the borrower has | more...

January 8, 2015

FHA Mortgage Loan Closing Costs: Prepaid Items, Per Diem Interest

By Joe Wallace

In our last post, we answered a reader question about FHA loan closing costs. This type of question is important for borrowers to ask as the answers can help you save and prepare for the costs of getting a home loan. There are several items a borrower may be required to pay at or before the loan closes in order to finalize the transaction. Some of these items include pre-paid expenses such as per diem interest, and discount points (when the borrower chooses to pay these points). Pre-paid expenses are defined in HUD 4155.1 Chapter Five as follows: “Prepaid items are collected at closing to cover  accrued and unaccrued hazard insurance premiums  mortgage insurance premiums  taxes  per diem interest, and  other similar fees and charges.” | more...

January 8, 2015

FHA Loan Closing Costs: A Reader Question

By Joe Wallace

A reader asks, “What are the required closing costs for the buyer and seller?” The answers to this question depend on what the buyer and seller have agreed to. Sellers are limited with respect to contributing goods, costs or related contributions to six percent of the sales price or appraised value of the property (whichever is lower). Closing costs may vary depending on the transaction, the housing market, the lender, etc. There is no fixed dollar amount on closing costs that can be quoted in a general way, but we can examine the FHA loan rulebook to see what is required by FHA regulations. This information is found in HUD 4155.1 Chapter Five, which states: “Lenders may charge and collect from borrowers those customary and reasonable costs necessary to close | more...