Articles Tagged With: FHA Updates

January 23, 2015

FHA Loan Income Rules For Child Support: A Reader Question

A reader asks, “For FHA loan will child support stop you from getting a loan?” Let’s see what the FHA official site (www.FHA.gov) has to say about this question. On a frequently asked questions page at the official site, we find the following: “Most recurring obligations, including child support and alimony are considered in computing debt-to-income ratios. Debts lasting less than ten months must be counted if the amount of the debt affects the borrower’s ability to make the mortgage payment during the months immediately after loan closing; this is especially true if the borrower will have limited or no cash assets after loan closing. Because of the tax consequences of alimony payments, the lender may choose to treat the monthly alimony obligation as a reduction from the borrower’s gross income | more...

January 17, 2015

FHA Mortgage Rate Trends: 20-Month Lows This Week

By Joe Wallace

Mortgage loan rates this week were described by some sources at “near 20-month lows”. This week mortgage loan rates, best execution, benefitted from some volatility that can and often does bring a correction to push the rates back into more realistic territory. 30-year fixed rate conventional mortgage loan best execution rates approached 3.5% for some extremely well qualified borrowers applying with lenders offering that possibility. However, on Friday a slight correction did come, bringing the best execution rate back up into 3.625% territory. That rate is a best execution rate and is not available to all borrowers or from all lenders. Your FICO scores and loan repayment history will affect your ability to access that rate. Even so, borrowers who were offered higher rates than the best execution numbers still | more...

January 16, 2015

FHA Loan Reader Questions: Do I Qualify?

By Joe Wallace

A reader asks, “I wanted to know if I can qualify for any of FHA products for first time homebuyers:-My wife owns a home in her name only.-I am not listed anywhere on the deed, title, loan, etc-We currently live in her 2-bedroom home, but have outgrown it. We now have 2 kids and my mother is living with us.We would like to move to buy a new home, in my name only. I have never owned a home, however, my wife and I have been filing jointly for all of our tax returns (her property is listed on all of our tax returns). My wife plans to keep her current home as an investment property. So, do I qualify for a FHA loan, or any of your listed down payment assistance programs?” | more...

January 15, 2015

FHA Loan MIP Rules: A Reader Question

By Joe Wallace

A reader asks, “When calculating the annual PMI, are the bps assessed against the original loan amount or the current pay-off amount of the loan?” Assuming the reader is asking about annual FHA Mortgage Insurance Premiums, and not monthly Private Mortgage Insurance, it’s important to know the following: When the FHA and HUD announced a reduced annual Mortgage Insurance Premium, it created a table showing how the new Mortgage Insurance Premium (MIP) is calculated. FHA MIP is calculated, according to the FHA/HUD official site, by “amortization term, base loan amount and Loan to Value (LTV) ratio.” Here is the table published by the FHA showing the new FHA MIP rates: As you can see, there is a listing for the previous FHA MIP payment and the new FHA MIP payment. | more...

January 15, 2015

FHA Loan Requirements Post-Bankruptcy: A Reader Question

By Joe Wallace

A reader asks, “We recently went through CH7 BK. We have high 500′s for both of our scores and have no debt besides one student loan at $90.00 a month and two credit cards with $0 balance and no payments due. What would our chances be of obtaining an FHA for first time home buyers. We have $5000 to put down and have a city program that will also help with more $ for closing/down payment. We want to buy in September/October. which would be 10 months after our BK discharge.” There are a variety of issues at work in this reader question that should be addressed. Regardless of the bankruptcy issue, borrowers in general will find lenders requiring FICO scores upward of 620 for FHA home loans. It’s true | more...

January 10, 2015

FHA Clarifies Mortgage Insurance Premium Cuts

By Joe Wallace

When the FHA announced mortgage insurance premium cuts in the annual, mortgage insurance premium (MIP), there was a preliminary announcement on Thursday January 8th, with details promised to follow. Now the FHA has issued a Mortgagee Letter announcing specifics of those MIP cuts. FHA Mortgagee Letter 2015-01 states, “This Mortgagee Letter (ML) communicates revised annual MIP rates for FHA Title II forward mortgages and provides opportunity for cancellation of existing case numbers in order to utilize the MIP rates contained in the ML.” The new rules are effected for FHA loan case numbers assigned on or after January 26 2015. According to the mortgagee letter, the new FHA policy “reduces the rate for annual MIP for all Title II forward mortgages, with terms greater than 15 years, except; –single family forward streamline | more...

December 26, 2014

FHA Loan Reader Questions: Principal Reduction

By Joe Wallace

A reader asks, “I am owner/occupant of a 4 unit residential apartment Bldg which I built 37 years ago. it was successful until wacancies took over after the crash, I have funded the payments with my cash flow but it is now getting lower and lower and need my 6% reduced to the 3% rates with help i a small principal reduction.” This falls far outside the FHA single-family home loan program. The reader doesn’t indicate in the question whether the original loan was an FHA-guaranteed mortgage or not, but in any case, a borrower who seeks a principal reduction needs to work with the lender to see if this is possible. A refinance loan option may be possible depending on the circumstances and the lender, but again, this is | more...

November 18, 2014

FHA Extends Program For Underwater Home Owners

By Joe Wallace

The FHA has announced an extension to a program started to help borrowers who are underwater on their mortgages. FHA mortgagee letter 2014-23 describes the original “FHA Refinance of Borrowers in Negative Equity Positions” program started in 2010 which, according to the FHA/HUD official site, “provided enhancements to the Federal Housing Administration (FHA) refinance program that gave a greater number of responsible borrowers an opportunity to remain in their homes.” These FHA enhancements were designed, “to maintain homeownership by providing borrowers, who owe more on their mortgage than the value of their home, opportunities to refinance into an affordable FHA loan. This opportunity allowed borrowers to qualify for an FHA refinance loan provided that the lender or investor wrote off the unpaid principal balance of the original first lien mortgage | 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...

November 14, 2014

More Revisions to FHA HECM Loan Rules and Guidelines

By Joe Wallace

The FHA has issue another set of revisions, clarifications, and consolidation to its Home Equity Conversion Mortgage Loan rules. An FHA mortgagee letter, 2014-21, adds a large number of changes and clarifications. Many of the new changes have to do with key parts of the HECM loan process including limits on the amount of funds that can be “advanced at loan closing and during the First 12-Month Disbursement Period after loan closing” and also explaining which fees and charges are “Mandatory Obligations” under the FHA HECM program. One change announced in the mortgagee letter affects those who are paying off a non-FHA HECM loan with funds from the HECM loan. According to the FHA, the new rules include the following instructions to the lender: “Mortgagees may only permit the payoff | more...