Articles Tagged With: FHA Mortgage Loans

Coronavirus And Home Loan Appraisals: What You Need To Know Now

October 30, 2017

FHA One-Time Close Construction Loans

There is still time to consider an FHA construction loan in 2017. Those who are more interested in having a brand-new home built especially for them rather than purchasing an existing construction home with an FHA mortgage will be pleasantly surprised at the options available to them. FHA construction loans are different than other types of FHA mortgages and can be a bit more complex, but thanks to the FHA One-Time Close construction loan this process isn’t as complicated as other types of construction loans. Why? A Single Application and Closing Date For FHA One-Time Close Construction Loans The FHA One-Time Close construction loan is referred to in the FHA loan handbook, HUD 4000.1, as a “construction-to-permanent” mortgage. Some construction loans require the borrower to qualify twice; once to pay | more...

FHA One Time Close Construction Loan Option

October 23, 2017

FHA One-Time Close Construction Loan Requirements

By Bruce Reichstein

FHA One Time Close / Single Close construction loan requirements include different FICO score, escrow, and closing requirements than standard new purchase mortgages. Do you know how FHA One Time Close construction loans work? A Single Loan For The Entire Process Construction loans typically require two loans-one to purchase, and one to pay for the construction. Under the FHA One Time Close construction loan program, also known as an FHA construction-to-permanent mortgage, there is a single loan. This prevents the need for a borrower to be credit-qualified twice during the lending process. The procedure for an FHA One Time Close loan has the loan closing first, in order to pay for the land, followed by the construction phase. That means an escrow account is required in order to disburse funds | more...

October 19, 2017

How Does FHA Deal With A Borrower’s Financial Hardship? Part Two

By Joe Wallace

How does FHA deal with a borrower’s financial hardship? That is a question we began addressing in a previous blog post, starting with an examination of the FHA attitude toward things like public assistance income, credit counseling programs, etc. In general, FHA loan rules do not allow borrowers to have public assistance income held against them as a liability, and participating in a credit counseling program is not grounds for denying an FHA mortgage loan. All income, including public assistance, must meet FHA loan standards for dependability and the likelihood of that income continuing. But just because the income is from public assistance, Social Security, etc. does not mean that income is not a valid means of financially qualifying for an FHA mortgage. Borrowers With Temporary Reductions of Income One | more...

Time Is Running Out On Exterior-Only FHA Appraisals

October 17, 2017

What Is An FHA Rate And Term Refinance?

By Joe Wallace

What is an FHA rate and term refinance? This refinance loan is different than FHA cash-out refinancing or reverse mortgages. The rules that cover FHA rate and term refinancing are found in the FHA loan handbook, HUD 4000.1, and explains how this type of mortgage differs from the rest. What Are FHA Rate And Term Refinance Loans? HUD 4000.1 defines an FHA rate and term refinance loan as follows: “Rate and Term refers to a no cash-out refinance of any Mortgage in which all proceeds are used to pay existing mortgage liens on the subject Property and costs associated with the transaction.” Who Is Eligible To Apply For An FHA Rate And Term Refinance Loan? HUD 4000.1 explains that “at least one Borrower” named on the original home loan as | more...

October 11, 2017

Is There An FHA Loan For Homes On Tribal Land?

By Bruce Reichstein

Is there an FHA loan for homes on tribal land? According to the FHA loan handbook, HUD 4000.1, a type of loan known as a “Section 248 Mortgage” is available specifically for home purchases of this type. HUD 4000.1 defines the Section 248 mortgage as “a purchase or refinance Mortgage covering one- to four-family dwellings on Indian Lands.” Since definitions are extremely important for many aspects of the FHA loan program, this section of the FHA loan rules also defines what the FHA considers to be “Indian land” and the communities that live there: “Indian Land refers to those lands that are held by or for the benefit of Indian Tribes under some restriction or with some attribute peculiar to the legal status of its owners. Indian Tribe refers to | more...

October 10, 2017

What Are The FHA Loan Rules For Maximum Loan Amounts?

By Bruce Reichstein

What are the FHA loan rules for maximum loan amounts? It’s an important question many borrowers need to know when looking for homes; knowing how much you can borrow is an important factor in budgeting and planning for your FHA loan. FHA Loan Maximum Mortgage Amounts Defined HUD 4000.1, the FHA loan handbook, describes FHA loan maximum mortgage amounts as follows: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction.” For most FHA loans, the maximum mortgage an applicant is eligible for involves “the lesser of the Nationwide Mortgage Limit | more...

October 10, 2017

Can I Buy A Mobile Home With An FHA Mortgage?

By Joe Wallace

Can I buy a mobile home with an FHA mortgage? That’s a question on the minds of many not looking for a typical suburban house or a condo unit. FHA loan rules in HUD 4000.1, the FHA loan handbook, address the question of mobile home and manufactured housing purchases with an FHA mortgage. FHA Loans Can Be Used To Purchase A Mobile Home Or A Manufactured Home HUD 4000.1 includes instructions for the lender on processing FHA mortgage loans for mobile homes and manufactured housing. There are restrictions on the age of the mobile home; it must have been built on or after June 15, 1976 in order to qualify for an FHA mortgage loan. Additional lender standards in this area may also apply. Mobile Home Requirements To Qualify For | more...

October 3, 2017

How Long Are FHA Appraisals Valid?

By Bruce Reichstein

How long are FHA appraisals valid? That can be an important question, especially in situations where there might be a delay in the processing or closing of a home loan for some reason. FHA loan rules governing the appraisal process are found in HUD 4000.1, the FHA loan handbook. In that handbook, there is a general rule for the age of documents used to process the mortgage. According to that section on page 107, we learn: “Documents used in the origination and underwriting of a Mortgage may not be more than 120 Days old at the Disbursement Date. Documents whose validity for underwriting purposes is not affected by the passage of time, such as divorce decrees or tax returns, may be more than 120 Days old at the Disbursement Date.” | more...

September 27, 2017

What Are My FHA Loan Options For Buying A New Home?

By Joe Wallace

What are my FHA loan options for buying a new home? FHA loans are attractive to many house hunters thanks to lower down payment requirements, an credit standards that can be more forgiving than some conventional mortgages. The ability to freely sell the home or allow the FHA mortgage to be assumed (with lender participation) by someone else should the need arise is also a good, consumer-friendly feature. There are a few misconceptions about FHA home loans including the requirements to qualify and types of property available to be purchased with an FHA mortgage. Fortunately, some of those misconceptions have to do with things the borrower thinks cannot be done for some reason, but are actually options in the borrower’s favor. FHA Loans: Not Just For First Time Buyers FHA | more...

Rehab Refinance Loans, reverse mortgages

September 25, 2017

Which Debts Are Evaluated For My FHA Home Loan?

By Bruce Reichstein

Which of my debts are evaluated for an FHA home loan? Borrowers sometimes get nervous about this issue, especially if they are concerned about carrying too much debt to qualify for a home loan. FHA loan rules governing how a borrower’s debt load must be reviewed by the lender are found in HUD 4000.1. One section titled “General Liabilities and Debts” states: “The Mortgagee must determine the Borrower’s monthly liabilities by reviewing all debts listed on the credit report, Uniform Residential Loan Application (URLA), and required documentation.” The basic answer to the question may depend on whether the lender is manually underwriting the mortgage loan or using the TOTAL system to evaluate the application. TOTAL is an “automatic” underwriting tool, and when using this tool, the lender is instructed as | more...