Articles Tagged With: FHA Requirements

July 7, 2011

FHA Loans: What’s The Minimum Credit Score?

Applying for a home loan can be daunting; some people feel intimidated by the home loan process because of past credit mistakes they’ve made and assume they aren’t eligible for a home loan because of those mistakes. But is it safe to assume that a few problems in the past will keep you from becoming a home owner? Not necessarily. According to FHA rules, what makes a borrower eligible for an FHA mortgage is a combination of credit history, steady employment and your debt-to-income ratio, and the record of reliable payments in the last 12 to 24 months. The more reliable you are as a bill payer, the better chance you have of being approved for an FHA home loan. What do the FHA loan rules say about credit scores | more...

July 7, 2011

FHA Loans: What The Lender Looks For In Your Credit Report

By Joe Wallace

When a borrower fills out an FHA loan application, there is a requirement to submit a variety of information including proof of income, residency information, and financial details including all currently open lines of credit. The lender will verify all this information, including credit history. The lender must order credit reports from the three major agencies–Equifax, TransUnion, and Experian. These reports cannot be furnished by the borrower, they must come directly from the credit reporting agencies and must contain no erasures or alterations to the physical report itself. Corrections or deletions of any erroneous information must be made by the borrower through the credit reporting company’s official channels. When the lender gets your credit reports, he or she is looking for a standard set of information as spelled out in | more...

July 6, 2011

FHA Loan Residency Requirements

By Joe Wallace

One of the unique features of FHA home loans is the occupancy or residency requirement. According to FHA rules, borrowers must certify that the home being purchased with an FHA insured mortgage must be the primary or principal residence. How does the FHA define “principal residence”? According to the FHA official site, “A principal residence is a property that will be occupied by the borrower for the majority of the calendar year.” This means that summer homes, vacation properties, time shares and similar property types are ineligible for FHA new purchase home loans. The part-time nature of these homes excludes them from the FHA mortgage loan program. This issue is easy enough to understand for a single borrower, but what do the rules say when more than one FHA loan | more...

July 5, 2011

Can I Be Turned Down For an FHA Loan Even Though I Have Good Credit?

By Joe Wallace

FHA home loans depend on several factors for loan approval. An FHA borrower must have a history of reliable payments, dependable income that is likely to continue into the future, and the right amount of income versus money paid out for monthly financial obligations. That amount, called the debt-to-income ratio, is one of the most important factors in determining whether or not to approve or deny an FHA mortgage loan application. There’s no minimum or maximum income limit for an FHA loan. The FHA looks at the debt-to-income ratio instead, using that as the yardstick which measures the applicant’s ability to pay the monthly FHA mortgage payment along with all other financial obligations. That’s why the government and your lender requires a full accounting of your current debts, including insurance | more...

July 5, 2011

FHA Streamline Loan Changes

By Joe Wallace

The FHA Streamline loan program is a refinancing option for FHA borrowers which in most cases allows a no-credit-check refinancing loan. Changes to the program has modified the terms and conditions of FHA streamline loans, and FHA borrowers who looked into the program in the past should know about the updates in order to make a properly informed decision on when to apply for streamline refinancing. The FHA breaks down the modified streamline refinancing loan rules into two different categories. The first is for cases assigned on or after 4/18/2011. the second is for cases between 11/17/2009 and 04/17/2011. The most important details for the new streamline FHA refinancing loan rules affects both categories in the same way. For example, the FHA requires streamline loans the result in a “net | more...

June 30, 2011

FHA Refinancing And Ownership Issues

By Joe Wallace

Real estate can be a confusing business for those not used to dealing with the daily ins and outs of the industry. But a first-time FHA borrower isn’t the only one likely to have some initial trouble navigating the rules and regulations covering real estate transactions, FHA loan requirements and other issues. A first-time applicant for refinancing also has plenty of questions about the process. One of the most frequently asked questions about refinancing involves an important ownership issue. Suppose a borrower purchased a home with an FHA insured loan, and either had the loan assumed, added someone to the title, or otherwise brought another person into property ownership without having them named on the original FHA loan? Can someone apply for an FHA refinancing loan if they own the | more...

June 29, 2011

FHA Loans And Appraisal Repair Requirements

By Joe Wallace

When a home is appraised by an FHA appraiser, there may be

June 27, 2011

FHA Loan Limits For Some Counties Could Decrease in October, 2011

By Joe Wallace

The FHA has made an important announcement that could affect the loan limit on new FHA mortgages in some areas on or after October 1, 2011. According to FHA.gov, “Barring Congressional action, Federal Housing Administration (FHA) loan limits will revert back to loan limits determined under the Housing and Economic Recovery Act (HERA) for loans insured by FHA on or after October 1, 2011. As a result, FHA loan limits would likely decline in 669 of the 3,334 counties or county equivalents that are eligible for FHA insurance.” During the housing crisis of 2008, the FHA temporarily increased FHA loan limits. According to the FHA announcement, “The Economic Stimulus Act (ESA) enacted in February 2008 stipulated that FHA loan limits be set temporarily at 125 percent of the median house | more...

June 27, 2011

FHA Loans, Credit, and Bankruptcy

By Joe Wallace

We’ve had a lot of recent questions about how bankruptcy and related issues can affect a borrower’s chances to be approved for an FHA home loan. The good news is that filing for bankruptcy does not automatically disqualify a borrower from getting an FHA insured loan. Just like any other loan applicant, the FHA and lender examine several factors when deciding to approve an FHA loan. A borrower must be able to show stable income and a record of dependable payments regardless of a bankruptcy filing, so a borrower’s habits and track record in the wake of a Chapter 7 or Chapter 13 bankruptcy proceeding is just as important as a “typical” FHA loan applicant’s. How does a bankruptcy affect a borrower’s eligibility for an FHA mortgage? The short answer | more...

June 23, 2011

FHA Loan Down Payments

By Joe Wallace

The down payment issue is one that brings many would-be conventional borrowers to an FHA lender. After seeing what some conventional loans require for a down payment, the FHA minimum 3.5% is a definite advantage to a first-time home buyer. But when a borrower is doing research on FHA loans versus conventional equivalents, sometimes the details can be a bit confusing. One area some have trouble understanding (at first) is the difference between the required 3.5% FHA loan down payment for a typical home purchase and the $100 down payment required on some HUD home purchases. A HUD home purchase is not the same as taking out an FHA mortgage in the usual way. HUD homes are properties owned by the Department of Housing and Urban Development–homes that have been | more...