Articles Tagged With: FHA Requirements

December 12, 2014

FHA Appraisal Appeals: A Reader Question

A reader asks, “A buyer for my property secured an FHA approval and had a FHA appraisal performed. The appraisal was well below the contract price, so much so that it was below the County’s tax assessed value. Better comps and explanations were provided for the market area, but the appraiser would not amend the appraisal.” “The buyer went to another lender to but was told the previous FHA appraisal was valid for 6 months and a new appraisal could not be requested. Is this true, even if the circumstances were clearly presented?” In some limited cases an FHA appraisal may be appealed, but this would be handled on a case-by-case basis and would be at the FHA’s discretion. FHA loan rules do not permit borrowers to appeal an appraisal | more...

November 17, 2014

FHA Loan Answers About FICO Scores And Credit Requirements

By Joe Wallace

We’ve fielded a variety of questions recently about FHA home loans when it comes to FICO scores and credit requirements. There are several issues to be aware of when it’s time to start preparing for an FHA mortgage loan, or any kind of major credit application. One of the first questions you should answer for yourself at the start of your journey to buying a home with an FHA mortgage is, “How much time do I have?” Are you trying to plan for a loan that you want to apply for in a matter of months? If so, a revision of your timeline may be in order–finance experts recommend taking at least 12 months to plan for a new home loan. Why? Saving up for closing costs and other expenses | more...

October 10, 2014

FHA Home Loans and Maternity Discrimination: The Wells Fargo Case

By Joe Wallace

The FHA and HUD have taken a special interest in ending home loan discrimination against those who are pregnant or on maternity leave. Since 2010 HUD has received nearly 200 maternity leave discrimination complaints; the Fair Housing Act makes it a crime to “discriminate in real estate related transactions, including the provision of home mortgage loans, on the bases of race, color, national origin, religion, sex, disability, or familial status” according to the FHA official site. A recent HUD press release announces a major settlement between the Department of Housing and Urban Development and Wells Fargo Home Mortgage. According to HUDNo.14-124, HUD “has reached a $5 million settlement with Wells Fargo Home Mortgage, the nation’s largest provider of home mortgage loans, resolving allegations that the lender discriminated against women who | more...

September 15, 2014

Assessments Versus FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “How is the home value assessed for a 203K, fixer-upper loan? For instance if we bought a home for $200,000, and also borrowed $30,000 in repair funds to improve the home, would the home value continue to be assessed at $200,000 or could an appraisal actually be used in this case? I have read that home value with FHA PMI purposes will only be assessed at the LOWER of an appraisal and the original loan amount.” For questions like these, terminology is important when it comes to arriving at the answer needed. For example, there is a big difference between an assessment and an appraisal–and appraisal is done by an FHA-assigned professional to determine the value of the property to be purchased or financed by an FHA | more...

September 9, 2014

FHA Loan-To-Value Ratios, Down Payment Requirements

By Joe Wallace

FHA loans are different than conventional loans for a variety of reasons, including the amount of the down payment required. The comparatively lower down payment for FHA loans is one of the biggest advantages–borrowers who have to budget for a smaller down payment have more money to use in other areas of the FHA loan such as the fees for appraisals and compliance inspections. One important question on the minds of many borrowers involves how much the FHA will guaranty on the loan, what the down payment on that amount might be, and how these numbers are calculated. The maximum amount of the FHA loan is different than the maximum amount the FHA will guaranty on the loan. The borrower and lender could theoretically agree on a loan amount higher | more...

September 8, 2014

FHA Home Loan Advice: “Shop Before You Buy”

By Joe Wallace

The FHA official site, www.FHA.gov, has links to helpful videos that can instruct those new to the FHA mortgage loan program. One of those videos produced by the FHA/HUD is titled, “Shopping For Your Home” and offers some expert insights into how to make the best choices in the FHA loan process. One bit of advice the FHA offers is that borrowers can benefit by taking advantage of the option to get a referral to an FHA/HUD approved housing counselor. Borrowers who do this early in the loan planning process can save themselves time and even money thanks to the advice of the housing counselor. Borrowers will learn through the video what it takes to determine how much home you can afford by using a mortgage loan calculator. The video | more...

August 15, 2014

FHA Loans: Can The Seller Pay Closing Costs?

By Joe Wallace

There are plenty of expenses related to buying a home that house hunters need to save up and/or budget for–loan fees, appraisal expenses, certain types of insurance, even moving expenses should be factored into the equation. But can the seller pay some of these costs on an FHA loan to make the sale more attractive to the borrower? This is a common question among many first-time home buyers and sellers. The answer is yes–but on a limited basis as defined in the FHA loan rulebook. FHA loan rules don’t allow sellers to contribute more than a total of six percent of the sales price of the home without there being a dollar-for-dollar reduction in the loan amount based on the contribution above that six percent. What’s more, FHA loan rules | more...

July 21, 2014

FHA Loan Rules For Credit, Short Sales, Foreclosures: A Reader Question

By Joe Wallace

A reader asks, “My husband and I are looking to potentially buy a manufactured home already on some land. The home itself appears to meet the requirements stated above. The mortgage loan officer is stating that we do not qualify for a loan for a manufactured home due to my husband having a foreclosure seven years ago and I have a short sale three years ago. Is this correct, that due to our prior home financing circumstances, we are ineligible for an FHA loan for a manufactured home?” The important thing to keep in mind with regard to questions like this is that FHA loan rules aren’t the only ones that govern the FHA loan transaction–lender standards also play a part. FHA loan requirements for credit and other financial qualifications | more...

July 1, 2014

HUD Announces Settlement in Condo Housing Discrimination Case

By Joe Wallace

A press release at the FHA/HUD official site announces a settlement in a housing discrimination case featuring unlawful restrictions in a condo project. According to HUDNo.14-083, there’s an agreement between the Connecticut Fair Housing Center (CFHC) and a company called Lil-1 Associates, plus AllPoints Realty, and a realtor. “The real estate companies will pay more than $24,000 to settle allegations that they published discriminatory listings and advertisements for condominiums specifying that children were not permitted” according to the HUD press release. “The Fair Housing Act makes it unlawful to refuse to sell or rent housing on the basis of race, color, national origin, religion, sex, disability, or familial status. This includes refusing to allow families with children under 18 unless the property qualifies as housing for older persons.” Fair Housing laws | more...

June 18, 2014

FHA Loan Rules For Chapter 7 Bankruptcy: A Reader Question

By Joe Wallace

A reader asks, “Upon filing Ch 7 we never missed a payment. The problem we had was several years ago when CC companies raised their minimum payments and interest rates. We payed these increased payments for years until we knew we were going too run out of money.” “We filed because we were literally using CCs to live. Make a CC payment only to use the credit for Food and Gas. My credit score went down a little but still around 680. It has been a year since discharge. With OK credit score and always making payments before and after Ch 7, Do we still have to wait another year to buy a home? We have a Home but would like to move from a townhouse to a house.” FHA | more...