Articles Tagged With: FHA Requirements

January 9, 2012

Reader Question: Preparing for an FHA Home Loan

When it’s time to apply for an FHA home loan, your credit score is an important part of the application. Participating FHA lenders examine your credit history and the score you currently have to make a determination about your creditworthiness and what kind of risk you make. Credit experts recommend preparing for any kind of major loan in advance, and when it comes to a home loan, you should take at least a year to get your credit ready–starting with a good look at your credit report. Today’s question comes from a reader concerned about credit, but it’s clear from the question the reader has the right idea–taking at least a year to get ready for the FHA loan application is the best approach possible. This question came to us | more...

December 19, 2011

FHA Refinancing Loan Requirements

By Joe Wallace

One recurring question in the reader comments section as of late involves the rules of cash-out refinancing loans and streamline refinancing loans insured by the FHA. Some borrowers seek loans on property that no longer has a mortgage, and wonder if FHA refinancing loans can help. Borrowers looking at options including FHA cash-out refinancing or streamline refinancing learn there are important differences between the two. FHA streamline loans require the home to have a lien, otherwise there is no loan to refinance. Without an existing mortgage, there’s no possibility an FHA streamline loan can be underwritten for that property. For example, in the HUD.gov frequently asked questions section, under the heading, “Streamline Your FHA Mortgage”, the site states; “FHA has permitted streamline refinances on insured mortgages since the early 1980’s. | more...

December 13, 2011

FHA and HUD Information In Spanish

By Joe Wallace

The FHA and HUD offer a wide range of information, advice, and news about FHA insured home loan programs. Part of that information includes FHA/HUD resources in Spanish. Did you know there’s an entire Spanish-language site dedicated to the same information provided in English? The Spanish language version of these pages is available at http://espanol.hud.gov/home.html and features information about buying vs. renting, home economics, FHA loan advice and other valuable resources. For those who have already purchased homes with an FHA mortgage, there are resources including topics on FHA/HUD refunds and “refund tracers,” refinancing options, foreclosure avoidance and other important details. When it comes to foreclosure avoidance advice, borrowers in trouble on their FHA loans in need of Spanish-language resources should see the page titled, “Gu

December 2, 2011

HUD Offers Millions of Dollars in Housing Counseling Grants

By Joe Wallace

There are two times when potential or current FHA borrowers should seriously consider FHA-approved housing counseling help. First-time house hunters examining their FHA loan options should explore FHA/HUD approved counseling, as should anyone worried about going into default or foreclosure on an FHA loan, conventional mortgage or VA insured loan. FHA and HUD referred or approved counseling is often free depending on the type of counseling, All HUD-approved or referred foreclosure avoidance counseling is free, but other services such as required sessions for FHA HECM or Reverse Mortgages come with a fee. But FHA rules require approved agencies to offer free HECM and related counseling to borrowers who demonstrate financial hardship or need. In HUD press release 11-280, the agency announces more than $40 million in grant money to FHA/HUD | more...

November 29, 2011

FHA Help Available For Those At Risk of Foreclosure

By Joe Wallace

The FHA encourages borrowers worried about going into default or foreclosure on their FHA mortgages to seek help as soon as possible. The earlier a borrower acts, the better chance he or she has of saving the home and preventing damage to credit and other issues. One of the most important thing a borrower can do is to get Foreclosure Avoidance Counseling as early as possible The FHA and the Department of Housing and Urban Development offer help in this area; the FHA official site says, “HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or | more...

November 29, 2011

FHA/HUD Disaster Relief for New Mexico Storm Victims

By Joe Wallace

Believe it or not, 2011 storm relief is still needed this late in the year–though the relief announced by the Department of Housing and Urban Development is for weather-related problems in New Mexico that happened during the month of August, not for natural disaster issues in the current month. According to the press release HUD No. 11-276, “U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to the State of New Mexico and provide support to homeowners and low-income renters forced from their homes following flooding in August.” Some readers will likely wonder why the assistance is only now being announced. According the press release, areas of New Mexico have recently been named as Federal Disaster Areas, allowing the FHA and HUD to | more...

November 25, 2011

HUD Rules Proposed To Refine Fair Housing Laws

By Joe Wallace

Those applying for FHA home loans for the first time soon learn about the wide range of federal laws enacted to insure fair treatment in the lending and housing markets. But according to Department of Housing and Urban Development Secretary Shaun Donovan, those laws need to be modified to be more inclusive. In Donovan’s official HUD blog, he writes, “…I

November 22, 2011

FHA Loans, Escrow Accounts, and the Real Estate Settlement Procedures Act

By Joe Wallace

If you’re new to the home buying process, chances are good you’re learning plenty of new things about banking, the loan process, and escrow accounts. An escrow account is often required by lenders as part of an FHA home loan in order to pay property taxes, home insurance and other required expenses. But what are the rules governing escrow and what should the borrower know? To begin, the Real Estate Settlement Procedures Act or RESPA states that escrow is NOT mandatory as a condition of applying for an FHA home loan. That said, the lender is free to require an escrow account–but the FHA does not insist upon one. When a lender does require money to be held in escrow, the financial institution is limited by RESPA–there’s a maximum calculation | more...

November 18, 2011

FHA Home Loans: Is There a Minimum Square Footage Requirement?

By Joe Wallace

Some of the most frequently asked questions about FHA home loans involve the FHA’s minimum property requirements–the standards homes must be built or modified to in order to meet FHA approval. FHA minimum property requirements address basic issues such as safety–the property can’t be located near a high voltage easement, for example. But FHA minimum property requirements also address habitability concerns. All mechanical systems on the property must be in working order and be at the proper capacity to serve the home they are installed in. The FHA rules do not permit heating or central air conditioning systems that are too small to properly heat or cool the home, and electrical systems must be powerful enough to serve the entire building adequately. Areas of standing water in the basement are | more...

November 16, 2011

FHA Financial Report: 440,000 Families Helped Through FHA Refinancing Loans

By Joe Wallace

In a troubled economy, it’s easy to see why an FHA refinancing loan would be widely used–who doesn’t want to lower their monthly mortgage payments? Even in the best of times, a lower monthly commitment is attractive; when money is tight refinancing is on the minds of homeowners across the U.S. On Tuesday, November 15, 2011, the FHA and HUD released a financial report to Congress which included some figures that might surprise you. In 2011, the FHA “Served more than 1.2 million households and insured $218 billion in single-family mortgages, bringing the active single family portfolio to more than $1 trillion” according to an FHA press release. The press release, HUD No. 11-270, also noted that the FHA “…enabled more than 585,000 families to become homeowners for the first | more...