Articles Tagged With: FHA Refinance

September 23, 2015

HUD 4000.1 And Changes To The FHA Streamlined 203(k) Rehab Loan

Since the FHA and HUD published the new Single Family home loan policy handbook, HUD 4000.1, we’ve been examining changes and updates to FHA loan rules. One such update affects the FHA 203(k) Streamline Loan, sometimes called and FHA streamline rehab loan. According to the FHA official site, the changes are not being reported in a mortgagee letter or other official FHA/HUD document, because lenders are being asked to review the program policies in their entirety. That said, FHA/HUD did publish a brief list of updates with a few basic details. “FHA is not publishing a detailed document of specific changes to the 203(k) product section,” the official site states, “as it is important that mortgagees and 203(k) consultants read the section in its entirety to understand the policy within | more...

When Is An FHA Loan Better Than A Conventional Loan?

September 3, 2015

FHA Refinance Loans: When Is A New Appraisal and/or Credit Check Required?

By Joe Wallace

Borrowers who want to refinance may wonder which FHA refinance loans offer no credit check or new appraisal. Are such loans possible? The answer may depend on your lender and other factors, but let’s see what options are open: For starters, non-FHA loans refinanced under the FHA single family home loan program will always require a new appraisal and credit check. This is because the only refinance option for non-FHA mortgages (aside from reverse mortgages offered under the FHA program, which also require new appraisals and credit documentation) is the cash-out refinance option or the no-cash-out equivalent. Which leaves only FHA-to-FHA Interest Rate Reduction Refinance loans (IRRRLs) with a possible option to apply with no credit check or appraisal. But there’s a caveat with these loans–the FHA loan program does | more...

August 18, 2015

FHA Streamline Refinance Loans: Some Basics

By Joe Wallace

FHA refinance options for those who already have FHA mortgages include something know as the FHA Streamline Refinance. FHA Streamline Refinance loans allow FHA borrowers to apply for a refinance loan designed to lower monthly payments, interest rates (or both), get out of an adjustable rate mortgage, or refinance from one fixed-rate loan to another. Borrowers can also, according to FHA loan rules, refinance from one adjustable rate mortgage to another. The rules that govern FHA streamline refinance loans are found in HUD 4155.1, Chapter Six, Section B, which begins by explaining that FHA Streamline Refinances: “–are designed to lower the monthly principal and interest payments on a current FHA-insured mortgage, and — must involve no cash back to the borrower, except for minor adjustments at closing that are not | more...

August 12, 2015

FHA Refinance Loan Maximum Mortgage Calculation

By Joe Wallace

In recent posts we have discussed the maximum mortgage amount for FHA home loans. The borrower is required to make a minimum down payment on all new purchase FHA mortgage loans (3.5%) so that the maximum financing allowed would be 96.5%. Some borrowers may have to make larger down payments depending on credit scores and credit history. The FHA’s loan-to-value maximums can also be different depending on the type of transaction. With those ideas in mind, what are the FHA loan rules for refinance loans? For non-streamline, appraisal-required FHA refinance loans that feature no cash back to the borrower, FHA loan rules say the following: The maximum mortgage for a no cash out refinance with an appraisal (credit qualifying) is the lesser of the –97.75% Loan-To-Value (LTV) factor applied to | more...

August 7, 2015

FHA Refinance Loan Options

By Joe Wallace

If you are considering a refinance loan, there are many options under the FHA single-family home loan refinance program. You can refinance from a conventional or non-FHA mortgage into an FHA loan, get out of a variable or adjustable rate mortgage into a fixed rate loan, and even refinance with added funds for approved energy-efficient features or upgrades. FHA home loans allow non-FHA borrowers to refinance using cash-out or no-cash-out refinancing. These types of refinance loans require a new appraisal and credit check. Borrowers should know that even if it’s only been a short amount of time since loan closing, any appraisal used on a home where the loan has closed cannot be re-used for the purpose of a new loan. Borrowers who want to refinance early should expect to | more...

July 22, 2015

FHA Streamline Refinance Loans

By Joe Wallace

If you have an existing FHA mortgage loan, you can apply for a refinance loan with no FHA required credit check or appraisal that results in a reduction in your monthly mortgage payment and/or interest rate in most cases. Called the FHA Streamline Refinance loan, these loans are only for existing FHA mortgages and offer no cash back to the borrower. FHA loan rules permit Streamline loans for those who have assumed FHA mortgages. According to the FHA official site (www.fha.gov), the FHA, “does not require an appraisal on a streamline refinance. These transactions can be made with or without an appraisal.” If there is a lender required appraisal, there may be corrections noted. According to FHA loan rules, these corrections may or may not need to be made as | more...

July 15, 2015

FHA Home Loans And Divorce

By Joe Wallace

We get plenty of reader questions about the practicality or feasibility of putting a home loan in one borrower’s name as part of divorce proceedings. Borrowers who purchased a home together with an FHA loan who later get divorced may or may not be at odds regarding who is to take responsibility for the home, the mortgage, and related financial obligations. We’re often asked if it’s possible to refinance so that one borrower or the other can take sole possession of the property and the mortgage. But divorce proceedings–and divorce law–often varies from state to state, so it’s impossible to answer such questions in a general way. Community property laws may dictate how such things must be carried out, and not all states have community property laws. So what can | more...

July 1, 2015

FHA Refinance Loans: House Prices On The Rise

By Joe Wallace

House prices are on the rise and could even be approaching highs not seen since 2006 according to some financial reports. According to the Black Knight Financial Services Home Price Index, prices are well under 10% away from their 2006 peaks. According to the Black Knight official site, “The Black Knight HPI combines the companys extensive property and loan-level databases to produce a repeat sales analysis of home prices as of their transaction dates every month for each of more than 18,500 U.S. ZIP codes. The Black Knight HPI represents the price of non-distressed sales by taking into account price discounts for REO and short sales.” According to the report, Texas, Tennessee, Colorado, and New York all hit new house price peaks in April 2015, and Washington leads the U.S. | more...

June 26, 2015

FHA Streamline Refinance Loans: Appraisal Required?

By Joe Wallace

When you examine your streamline refinance options, it’s easy to get confused over the difference between lender requirements and FHA refinance loan standards. FHA Streamline Refinance Loans are intended for borrowers with existing FHA mortgages and can be done on any type of existing FHA loan–fixed rate, adjustable rate, graduated payment mortgage, etc. Some borrowers want to know if there is a new credit check or appraisal required. There is no short answer to this because while FHA loan rules do not demand a new appraisal, the lender may require one. The credit check issue also depends on a variety of circumstances including the type of refinance transaction (fixed rate to adjustable rate, for example) and how long the borrower has owned the property. FHA loan rule spell out some | more...

June 17, 2015

HUD Announces More Housing Counseling Grants

By Joe Wallace

We write a great deal about the importance of housing counseling–especially for first time FHA loan applicants who might need some additional help with questions about the home buying process in general, getting credit ready for an FHA loan application, and what it takes to apply for a home loan after a bankruptcy or foreclosure. Yesterday HUD announced a new round of grants for housing counseling agencies that provide such services to FHA borrowers and other home loan applicants. HUDNo.15-074 announced nearly six million dollars in housing counseling grants, including “nearly $1.5 million to new housing counseling grantees and $4.5 million to supplement the funding awarded in April to existing grantees” according to the HUD press release. You can examine a comprehensive summary of each grant, organized by state as | more...