Articles Tagged With: FHA Refi

September 11, 2013

FHA Loan Rules Updated: Maximum Loan Amounts For Streamline Refinancing

The FHA and HUD have updated some of the rules used to calculate maximum mortgage loan amounts for FHA Streamline Refinancing loans. According to Mortgagee Letter 2013-29, there are new guidelines to lenders on how the maximum amount is calculated, and what can be included in the loan amount when calculating the mortgage amount. “Mortgagees are reminded that when processing an FHA-insured streamline refinance mortgage, the new maximum mortgage amount must always be calculated starting with the outstanding principal balance on the existing mortgage, not with the payoff amount for the existing mortgage.” Borrowers should know the difference between the outstanding balance and the payoff amount. According to the Consumer Financial Protection Bureau (CFPB) official site, “Your payoff amount is how much you will actually have to pay to satisfy | more...

July 17, 2013

FHA Streamline Refinance Loans: Adding or Deleting Borrowers To The Title

By Joe Wallace

When borrowers with existing FHA mortgages want to apply for streamline refinancing, one question that sometimes comes up is whether or not a borrower is permitted to add or delete someone from the title of the loan at the time of refinancing. FHA loan rules do address this issue. Those rules are found in HUD 4155.1, Chapter Six, Section C under a section titled Borrower Additions or Deletions to the Title on a Streamline Refinance. The concern for some borrowers is whether or not adding or deleting someone might trigger the due-on-sale clause making the entire loan amount payable according to the terms of the clause. The FHA does permit additions and deletions to the title as described in Chapter Six: “Individuals may be added to the title on a | more...

April 17, 2013

FHA Refinance Loans, Disaster Assistance, and Loan Forbearance

By Joe Wallace

The FHA has updated its disaster relief policies to help those recovering from the effects of Hurricane Sandy, but also natural disasters in a federally declared disaster area in general. One area that hasn’t gotten much attention until now is the FHA policy on refinance loans in such cases. What assistance is there for someone with an FHA insured refinance loan who is struggling in a federal disaster area? According to the new FHA mortgagee letter, 13-11, “In accordance with HUD Handbook 4155.1, Mortgage Credit Analysis for Mortgage Insurance One- to Four-Unit Mortgage Loans, for the purpose of determining the acceptability of the borrower’s payment history for any FHA refinance, when a borrower has withheld mortgage payments pursuant to either a Formal or Informal Forbearance drafted under this Mortgagee Letter, | more...

April 3, 2013

New FHA Home Equity Conversion Mortgage Rules Take Effect

By Joe Wallace

In January of 2013, the FHA announced pending rule changes to its Home Equity Conversion Mortgage program (FHA HECM for short). Those changes were scheduled to take effect on 1 April 2013 and are now in full effect. In the FHA Mortgagee Letter HUDNo.13-010, the agency announced, “…the consolidation of the Federal Housing Administration (FHA) Home Equity Conversion Mortgage (HECM) Standard and HECM Saver initial mortgage insurance premium (MIP) and maximum principal limit factors for fixed interest rate mortgages.” The announcement states that the HECM Saver program is, as of 1 April 2013, the “only initial MIP option available to mortgagors who seek the predictability of a fixed interest rate mortgage and lower upfront closing costs.” The announcement adds, “Mortgagees shall designate HECM Saver as the initial MIP and use | more...

February 14, 2013

FHA Proposes Down Payment Changes For Larger FHA Loans

By Joe Wallace

The FHA is considering changes to the maximum LTV and down payment rules for certain FHA mortgages (described by the FHA as those “in excess of $625,500”) according to the FHA official site. According to HUDNo.13-010, “FHA will announce a proposed increased down payment requirement for mortgages with original principal balances above $625,500. The minimum down payment for these mortgages will increase from 3.5 to 5 percent.” “This change, coupled with the statutory maximum premiums charged for these loans, will help protect FHA and further facilitate its efforts to encourage higher levels of private market participation in the housing finance market.” In a statement published in the Federal Register Volume 78, Number 25, you’ll find some supplemental information including the following: “…the maximum LTV will be limited to 95 percent | more...

December 7, 2012

FHA Refinance Loan Options

By Joe Wallace

Recent news headlines related to “fiscal cliff” include warnings of possible tax hikes, a loss of (or cap on) mortgage loan interest rate tax breaks and other bad-news type possibilities. Those headlines make some homeowners seriously think about refinancing their FHA mortgages–getting into lower interest rates and/or lower payments to offset the higher costs of owning a home should the fiscal cliff issue enter a worst-case scenario. While no homeowner should rush into such a decision, those who are ready to commit should know their FHA refinance loan options. According to the FHA official site, borrowers with FHA or conventional home loans have the following choices as described in HUD 4155.1 Chapter Three: “FHA insures several different types of refinance transactions, including –Streamline refinances of existing FHA-insured mortgages made with | more...

October 22, 2012

FHA Loan Reader Questions: Appraisals

By Joe Wallace

A reader asks, “We had an appraisal 3 years ago when we purchased our house. It came in at $122000. At the beginning of the year, we had a contract with an FHA buyer and the appraisal came in at $117000, this made the deal fall through.” “Our house has been on the market over a year, now we have a contract with another FHA buyer and since it

October 3, 2012

Things You Should Know About FHA Refinance Loans: The Basic Details

By Joe Wallace

Refinancing an FHA mortgage is similar to refinance loan on other types of mortgages such as conventional loans or VA loans. Naturally the FHA has its own list of requirements and regulations that govern refinance loans; do you know the basics as well as you should? If you’re considering an application for an FHA refinance, here are a few general things you should know about going into the process. In the FHA loan rulebook under the section, “Purpose of a Refinance Transaction” we learn, ” A refinance transaction is used to pay off an existing real estate debt with the proceeds of a new mortgage; –for borrower(s) with legal title, and –on the same property”. The rules also state that an FHA borrower is “eligible to refinance the loan, as | more...

September 5, 2012

What Is the Maximum Loan for an FHA No Cash Out Refinancing Loan?

By Joe Wallace

A common question about FHA refinancing loans has to do with no cash out refinancing loan maximums. What is the maximum loan amount a borrower can apply for with a no-cash out refinancing loan with an appraisal? According to HUD 4155.1 Chapter Three, in the section titled, “Maximum Mortgage Calculation”, the following rules apply: “The maximum

September 4, 2012

FHA Announces Assistance For Louisiana Hurricane Isaac Victims

By Joe Wallace

Hurricane Isaac brought with it plenty of flooding and storm damage; the FHA and HUD have announced federal disaster assistance for affected areas in Louisiana. 35 parishes were affected by Isaac, and HUD Secretary Shaun Donovan has announced FHA/HUD relief efforts for “homeowners and low-income renters forced from their homes” due to the hurricane. According to a press release at FHA.gov, “President Obama issued a disaster declaration for Acadia, Allen, Ascension, Assumption, Avoyelles, Cameron, East Baton Rouge, East Feliciana, Franklin, Iberia, Iberville, Jefferson, Jefferson Davis, Lafourche, Livingston, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, and West Baton Rouge Parishes. The President