Articles Tagged With: FHA Mortgage Loans

July 6, 2017

Who Should Get An FHA Loan?

Who should get an FHA loan? There are a variety of options with FHA mortgages, and depending on your financial goals and needs, you may find an FHA mortgage is the right choice for you, especially if you are interested in lower interest rates, and a more competitive down payment requirement. FHA Loans Are For Those Who Need A Lower Down Payment You should get an FHA mortgage loan if the idea of paying as much as 10% down doesn’t work for you. FHA mortgage loans require a minimum 3.5% down payment, which is based on the adjusted value of the property you are purchasing. It is important to know that your credit history will play an important part in determining your down payment in some cases; borrowers who have | more...

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

June 26, 2017

What Is The FHA One-Time Close Construction Program? Part One

By Bruce Reichstein

What is the FHA One-Time Close / Single-close construction program? Who is it meant for? These are questions with important answers for potential FHA borrowers who are interested in applying for an FHA mortgage to have property built for them instead of buying an existing construction property. One-Time close mortgages are construction loans that differ from standard construction loans in that there is a single closing date for the loan rather than the traditional two closing dates. The borrower saves money on a one-time close loan thanks to the single loan for construction costs, land purchase, and the typical expenses associated with a home loan. These savings work in ways you might not expect. One advantage of this type of construction loan is that the lender and borrower arrive at | more...

June 22, 2017

What Is An FHA Loan And Who Qualifies?

By Bruce Reichstein

What is an FHA loan and who qualifies? These are common questions, especially for first-time home buyers looking at all their options from conventional mortgages to FHA loans. What Is An FHA Home Loan? Simply put, an FHA mortgage is a home loan that has been guaranteed by the government, making the mortgage safer for the lender and less expensive for the borrower. The FHA single family home loan program is designed for borrowers who are financially qualified with FICO scores at 580 or better for maximum financing. (Lender FICO score requirements may be higher than FHA minimums.) An FHA mortgage as described here is intended for owner-occupiers and is meant for primary residences. That means that time shares, vacation homes, and other occasional-occupancy properties cannot be purchased with an | more...

May 15, 2017

FHA Loan Rules For Bankruptcy: Chapter 7 and Chapter 13

By Joe Wallace

We’ve had a number of reader questions in our comments section recently asking about scenarios for loan approval that involve bankruptcy and related issues. Can a borrower get a new FHA loan following a bankruptcy? Under what conditions? FHA loan rules in HUD 4000.1 address this issue with separate entries for Chapter 7 and Chapter 13. According to the FHA loan rule book, Chapter 7 requires the lender to observe the following: “A Chapter 7 bankruptcy (liquidation) does not disqualify a Borrower from obtaining an FHA-insured Mortgage if, at the time of case number assignment, at least two years have elapsed since the date of the bankruptcy discharge. During this time, the Borrower must have: – re-established good credit; or – chosen not to incur new credit obligations.” HUD 4000.1 | more...

Can I get an FHA home loan if I owe back taxes?

May 11, 2017

FHA Loans And Income Verification Requirements

By Joe Wallace

FHA loan income verification requirements include submitting tax data as part of the application process. Your lender may require tax returns and other paperwork; depending on the transaction these requirements may include additional forms of documentation. A reader got in touch recently in our comments section to ask about these income verification issues. “Our lender is asking for two years of tax returns. We have not filed for 2016 yet. We apply for and get an extension every year and have until October since we are freelancers…Can we just submit 2014 & 2015 for now to apply for the loan? We have pay stubs for 2016 as proof for income and it is greater than what we have made the priors years. Although, it seems to be a problem that | more...

May 10, 2017

FHA Mortgages For Multi-Unit Properties

By Joe Wallace

A reader asked us a question this week in the comments section about FHA mortgages for properties with multiple units. “I want to buy a 6 residential unit apartment building with a very small store front commercial space on the property (computer repair shop that takes up about 15% of the property space) I plan on living in one of the apartment units. Is there an FHA loan out there for this situation?” FHA mortgages under the single family loan program do allow FHA loans to qualified borrowers for multi-unit properties. The rules for these purchases are found in HUD 4000.1, which states: “FHAs programs differ from one another primarily in terms of what types of Properties and financing are eligible. Except as otherwise stated in this SF Handbook, FHAs | more...

How much can I borrow with an FHA refinance loan?

March 14, 2017

Mortgage Markets and FHA Loans

By Joe Wallace

At the beginning of 2017, Forbes.com published a housing outlook for 2017 which included predictions from experts about what could happen this year. Three months into the new year, how accurate were some of the highlights of this piece? How do current trends affect mortgage loan applicants and those looking to refinance? A quick look at current events shows that some of the observations made at Forbes.com in an article by Samantha Sharf are absolutely right and there’s no reason to expect anything different in the short to mid-term. Consider the prediction made in this piece about mortgage rates. According to the article: “By historic standards rates are still low. In 2017 experts expect movement, but differ on where for the 30-year fixed rate will land. Estimates out there range | more...

March 13, 2017

FHA Loans and Septic Distances

By Joe Wallace

What are the FHA loan guidelines for septic tank issues? A reader asked us a question in this area in the comments section recently: “I am in contract to buy a home with a FHA 203 rehab loan. Today I had building and septic inspections and I found the septic was actually located on the neighbors property. The neighbor doesnt care and is very willing to work with me on it. Does this disqualify the loan?” There are several factors at work for FHA loan approval, not just FHA loan minimum standards. State law, building code, health department requirements and other regulations may affect whether corrections are required as a condition of loan approval. So it’s very important to understand that FHA loan rules may be silent in areas where | more...

March 9, 2017

FHA Mortgage Questions And Answers

By Joe Wallace

There are many questions about FHA loans-those who are new to the process want to know some very basic, but very important things including how down payments are calculated, who is eligible for an FHA loan, and whether the borrower is free to sell the home purchased with an FHA mortgage after buying it, and how soon. Let’s explore some of these questions: Am I Eligible For An FHA Loan? The implication with a question like this sometimes includes another question. “Do I make too much money to qualify?” This is due to a misconception that FHA mortgages are intended only for first-time buyers, the economically disadvantaged, or those who have earnings that fall within a certain range. But the truth is, FHA mortgage loans have no income limits and | more...

What You Need To Know About Your FHA Home Loan

February 28, 2017

FHA Loan Rules On Occupancy And Second Homes

By Bruce Reichstein

Occupancy is a key issue for FHA single family home loans. When you purchase a residence with an FHA mortgage, one of the requirements loan approval is conditional upon is that the borrower is expected to occupy the home as the primary residence, usually within 60 days of the loan closing. Occupancy is required for both new purchase and FHA cash-out refinancing loans. That’s one reason why FHA loan rules in HUD 4000.1 specify that FHA mortgages can’t be used for vacation properties, timeshares, etc. HUD 4000.1 states clearly, on page 135, the “standard for owner occupancy” which includes the following: “At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year. 203(k) Rehabilitation products | more...