March 28, 2011
Can an FHA Borrower Rent Out the Home and Apply for a New FHA Mortgage?
First time home buyers have many dilemmas and issues to deal with for
Articles Tagged With: FHA Requirements
March 25, 2011
FHA Refinance Loans–Can I Include Closing Costs Into a Streamline Loan?
FHA Mortgagee Letter 2011-11 issued several changes and policy clarifications to refinancing loans. FHA borrowers with existing mortgages should be aware of these changes as they can affect a borrower’s planning when it’s time to consider refinancing a home with streamline or cash-out FHA loan products. One of the changes, scheduled to take effect in mid-April 2011, alters the way closing costs, pre-paid items, discounts and other items are paid for during some types of FHA refinancing. According to the new FHA guidelines, “The mortgagee may not add closing costs, discount items, prepaid items, or other financing costs to the new loan balance.” This applies to borrowers who seek “Non-Credit Qualifying Streamline Refinances” like an FHA Streamline loan. The policy also states, “As a means of controlling risk to FHA
March 25, 2011
Who is Considered a First-Time Homebuyer for FHA Loans?
There are many loan programs designed specifically to help first-time home buyers. Conventional loans may have special rates for first-timers, the VA offers a lower funding fee on its mortgage loans for first time home buyers, and the FHA is specifically dedicated to helping the first time house hunter make the right choices on a new home purchase. New house hunters might not know, for example, about the Affordable Housing Program or Homeownership Set-Aside Program, created to help low income and middle-income buyers with FHA-approved down payment assistance. There are also state and local programs for first time home buyers and low-income house hunters the FHA can help qualified borrowers apply for. But what does the FHA consider to be a “first time home buyer”? According to the rules, a | more...
March 24, 2011
FHA Loans: How Long Until I Can Apply For Cash Out Refinancing
In February 2011, the FHA released modifications and clarification for a number of policies related to FHA refinancing loans including FHA Streamline Refinance and Cash-Out Refinancing loans. Some of the changes were scheduled to take effect 60 days after the release of FHA Mortgagee Letter 2011-11, while others are listed as “effective immediately.” For example, effective immediately the FHA requirements for Streamline Refinancing were clarified to include instructions to the FHA loan officer regarding how long a borrower must wait from the time an FHA insured mortgage is issued and the application date for Streamline Refinancing. FHA Streamline loans, where no money is paid directly to the borrower, require at least six full months since the first payment due date on the original mortgage.
March 23, 2011
More on Title I Loans and Manufactured Homes
FHA Title I loans for manufactured homes can be used several ways–one is to apply for an FHA loan to purchase the home itself, another is to apply for a mortgage loan to purchase a lot for a home already owned or to be purchased, and the Title I loan can also be used to buy a manufactured home and lot combination. When borrowing money for a manufactured home under Title I, there quality standards the home must live up to, including wall thickness, foundation footing, and approved construction materials. “Manufactured homes must comply with the Model Manufactured Home Installation Standards, and all applicable state and local requirements” to include the construction/installation of the foundation system. In addition to the Model Manufactured Home Installation Standards, there’s another set of standards. | more...
March 23, 2011
FTC Warns Borrowers of Mortgage Scams
In an age of uncertainty in both the job and the housing markets, there are plenty of scams targeting homeowners fearful of losing their homes to FHA loan default and foreclosure. Anyone worried about defaulting on an FHA mortgage can be more vulnerable to a scam targeted to prey specifically on such fears; the FHA, HUD and the Federal Trade Commission issue regular warnings about mortgage scams. The best defense against companies and individuals who claim to offer relief, bailout programs or counseling–but don’t deliver–is knowing how such scams work. The FTC warns that con artists use a variety of tactics to find new victims. Some advertise on radio, television and websites; others conduct searches of public records to find names and addresses to send more personalized messages. Regardless of | more...
March 22, 2011
FHA Loan Facts on Title I Loans for Manufactured Homes
FHA home loans aren’t just available for traditional suburban houses; the FHA also insures loans for manufactured housing. Just as with FHA loans for traditional homes, the FHA insures or guarantees the loan rather than providing the loan itself. The FHA guaranty makes qualified borrowers more attractive to lenders willing to issue the loan. FHA Title I loans for manufactured homes can be used in one of three ways–to purchase the home itself, to purchase a lot for a home already owned or to be purchased, and the Title I loan can also be used to buy a manufactured home and lot in combination. The FHA has different loan terms depending on the nature of the Title I loan. Maximum loan amounts for the home only are just under $70 | more...
March 21, 2011
FHA Updates Recommendations For Homes With Problem Drywall
The FHA has issued a press release that addresses fixing “problem drywall” in homes including those purchased or intended to be purchased with FHA mortgage loans. In May 2010, the U.S. Consumer Product Safety Commission press release, “CPSC Identifies Manufacturers of Problem Drywall Made in China” identified a group of manufacturers, “whose drywall emitted high levels of hydrogen sulfide in testing conducted for the agency by Lawrence Berkeley National Laboratory (LBNL). There is a strong association between hydrogen sulfide and metal corrosion” according to the press release. That corrosion had the potential to damage the electrical system in homes built with drywall made by the manufacturers named in the release. Could the value of, or the quality of life in, those homes be affected by the problem drywall? The FHA | more...
March 21, 2011
FHA Loan Assumption
The FHA allows its home loans to be assumed, which is when a borrower takes over the responsibility for paying an existing FHA mortgage taken out by another borrower. According to the FHA,
March 16, 2011
FHA 203(k) Rehab Mortgages
It’s true that those dedicated to purchasing and improving a fixer-upper home face a challenging road when it comes to getting the money to do the job properly. A loan applicant trying to get a conventional loan may face requirements that the improvements be done and paid for before the money for those repairs will be issued–not an ideal situation for those trying to balance budgets, pay the mortgage on time and improve their property. An FHA loan could be the answer. The 203(k) loan program provides qualified borrowers with an FHA insured loan to those using the property to be improved as the primary residence. (It’s not for investment properties or rental units.) As with other FHA mortgage loans, there is a 3.5% minimum down payment. But 203(k) mortgages | more...