Articles Tagged With: FHA Loan

When Is An FHA Loan Better Than A Conventional Loan?

October 17, 2016

Residency And Occupancy: FHA Loan Rules

FHA loan rules have requirements for both U.S. residency for potential borrowers, and occupancy for approved borrowers. Did you know that HUD 4000.1 states that an FHA loan applicant does not have to be a U.S. citizen in order to apply for an FHA mortgage or refinance loan? U.S. citizenship is not required, but legal documentation showing the applicant’s status will be a condition of loan approval. The FHA loan program is open to both non-permanent resident aliens and lawful permanent resident aliens. The FHA loan rules also instruct the lender, “Non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured Mortgages”. While all borrowers are required to show proof of a Social Security Number, this cannot be used to prove immigration or work status, according to | more...

October 10, 2016

Mortgage Loan Interest Rate Trends: Upward Trend

By Joe Wallace

For the past five business days, mortgage loan interest rates have been in an upward trend. Even after last week’s Employment Situation Report, which had weaker jobs data that anticipated, rates were still on a short-term upward swing. The employment report and mortgage loan rates aren’t directly tied together, but investor behavior associated with that report often has rates moving lower in the wake of weak jobs data. This time, investor behavior all but ignored this, and the week ended with rates closing out in a range for conventional mortgages higher than we’ve seen in a little while. 30-year fixed rate conventional mortgages closed out Friday in a range between 3.5% and 3.625% best execution. FHA mortgage loan interest rates are still holding in their 3.25% comfort zone, but if | more...

October 6, 2016

FHA Loan Employment Rules: Fact and Fiction

By Joe Wallace

FHA home loan employment rules can be easily misunderstood. There is some confusion over the basics of FHA loan policy regarding employment and how that employment must be verified by the lender. One of the most common fictions about FHA mortgage loans is that the rules supposedly require a borrower to be with their current employer for two years or more. This is not true. But there IS a two-year benchmark the FHA uses with respect to employment, as we learn in HUD 4000.1: “For all Employment related Income, the Mortgagee must verify the Borrowers most recent two years of employment and income…” Note that there is no specification for that two years to be with the same company or boss. HUD 4000.1 adds, “Direct verification of the Borrowers employment | more...

October 4, 2016

FHA Loan Facts And Fiction: First Time Home Buyers

By Joe Wallace

First time home buyers come to the FHA loan process with many questions. There are some long-held misconceptions about FHA mortgages that borrowers should know long before they fill out a loan application. Let’s examine some of them. One myth about FHA loans, and one of the most common, is that the FHA itself lends money to loan applicants. This is not true. Instead, the borrower must find a participating FHA lender, who has been certified by the FHA to issue home loans under the FHA single-family loan program. Another misconception has to do with the nature of the FHA loan program itself, which offers affordable home loans to all qualified applicants regardless of their status as a home buyer. That means that first time home buyers and those who | more...

October 3, 2016

HUD Awards Millions To Promote Fair Housing

By Joe Wallace

Fair Housing laws affect house hunters and potential FHA loan applicants at all levels of their search for housing. Whether you are ready to fill out a loan application to purchase property, or need to rent an apartment as an interim solution while you search for a home, Fair Housing laws are there to protect borrowers from discrimination in the housing process. The Department of Housing and Urban Development has announced a $38 million initiative designed to help national and local agencies fight housing discrimination. The funding will support more than 100 agencies. “This year, HUD provided competitive funding under three notices to organizations that support a wide range of fair housing enforcement, education and outreach activities” says the press release HUDNo.16-150, which adds, “These grants allow the groups to | more...

October 3, 2016

Mortgage Loan Rate Trends: Mixed

By Joe Wallace

Mortgage loan interest rates closed mixed on Friday, gaining back some ground after a couple of days of slightly higher movement. Overall, last week was a bit of a tug-of-war, but on Friday best execution rates are still reported at levels we’ve seen all week, with minor ups and downs likely being reflected in closing costs rather than actual rate changes depending on the lender. 30-year fixed rate conventional mortgages ended Friday at 3.375%, best execution. Market watchers noted on Friday that some lenders marked up, some marked down, and it’s likely that some also stayed the same from Thursday. Bond market activity is a player in the Friday numbers, but how that factors into the week ahead remains to be seen. FHA mortgage loan fixed interest rates remain in | more...

September 29, 2016

Mortgage Loan Interest Rate Trends: Higher After Days Of Recovery

By Joe Wallace

Mortgage loan interest rates moved higher on Wednesday after a recovery streak that would have hit seven straight business days otherwise. In many cases borrowers would notice the Wednesday changes in closing costs rather than an actual higher rate, but as market watchers are fond of pointing out, even with recent moves higher we are still seeing rates at respectable lows. 30-year fixed rate conventional loans ended Wednesday at a best-execution rate of 3.375%, while FHA mortgage loan interest rates (best execution) are at or near their current comfort zone of 3.25% depending on the lender. You may notice greater variation in the actual rates offered by participating lenders, so it pays to look for the best rates and terms. Best execution rates are listed here assuming an ideal borrower | more...

September 28, 2016

FHA Loan Mortgage Insurance Premiums

By Joe Wallace

Here’s a version of a common question we’ve been asked recently about FHA mortgage insurance premiums: “I closed an FHA mortgage on a house I purchased in December 2014. The following month FHA reduced the mortgage insurance premium (MIP). Can I get the lower mortgage insurance rate and a reduced monthly payment without totally refinancing my mortgage?” The FHA/HUD official site published a .pdf file that addresses this question directly. Back in 2015 the FHA lowered it’s mortgage insurance premium. The pdf states, “The reduction is effective as of January 26, 2015. Borrowers with case numbers assigned on and after January 26, 2015 will be eligible for reduced annual mortgage insurance premiums.” Note the specific date when the lower premiums become effective-borrowers who have loans prior to these dates will | more...

What You Need To Know About Your FHA Home Loan

September 27, 2016

HUD Announces Settlement In Mississippi Fair Housing Complaint

By Joe Wallace

Zoning laws don’t come up much in our discussions about FHA mortgages, but when they do it’s usually about whether a property is eligible for an FHA loan because it is in a mixed-zoning area, or there is some zoning law concern that might affect the sale or purchase of a property. But recently zoning laws came up in a completely different way, as we learn from the FHA/HUD official site. The Department of Housing and Urban Development has announced a settlement in a Fair Housing case alleging that zoning laws were applied in a discriminatory fashion. According a press release at www.HUD.gov, “The U.S. Department of Housing and Urban Development (HUD) announced today an agreement with Ridgeland, Mississippi to resolve complaints the city violated the Fair Housing Act when | more...

September 27, 2016

Mortgage Loan Interest Rate Trends: Improving

By Joe Wallace

Mortgage loan interest rates improved on Monday, the fourth business day in a row that rates have recovered. There was an upward trend for some time, but some market watchers and industry professionals are using the word “rally” to describe what they’ve been seeing lately. There was considerable attention on the latest Fed statement about interest rates, but once “Fed day” came and went there was no significant change in investor activity-that is to say no increase activity unfavorable to interest rates in specific reaction to the Fed announcement. 30 year fixed rate conventional mortgage loan rates were reported at 3.375%, best execution, on Monday. That puts conventional loan rates in a single number rather than the range of best execution rates we saw previously. FHA mortgage loan rates are | more...