Articles Tagged With: FHA

September 9, 2019

FHA Condo Loan Rule Changes

The FHA and HUD announced changes to FHA condo loan approval policy in August of 2019, opening the program up to condo loans in condominium projects that have not been added to the FHA approved list. A Final Rule detailing the program changes was published, but in the interim between revising the FHA Single-Family Home Loan program handbook, HUD 4000.1, the FHA and HUD have published rules to manage the new rules. According to an FHA mortgagee letter published on the FHA official site, “FHA systems will be enhanced in the future to permit the issuance of case numbers in unapproved projects” basically from the time the final rule became effective (mid-August 2019) until the FHA and HUD rules and systems are fully updated with the new changes. What is | more...

September 6, 2019

HUD Announces Housing Reform Recommendations

By Bruce Reichstein

The Department of Housing and Urban Development has issued recommendations to the President for housing reform, including attention on down payment assistance programs and cash-out refinancing. According to a press release issued on the HUD official site, this is NOT the same housing finance reform plan, which was developed by the U.S. Treasury Department. There are major differences between the two in some respects including the HUD language discussing the need to focus on “the core mission” of the FHA where home loans are concerned. It’s the view of the Treasury Department (as stated in the plan) that any changes to the core of what has traditionally been considered an FHA loan program could be detrimental. The Treasury Department plan states, “…any proposal to fundamentally change the housing finance system | more...

September 5, 2019

How To Get A Loan Estimate

By Joe Wallace

Have you found a house you want to buy with an FHA mortgage loan? If you don’t know how to request a home loan estimate, there are plenty of resources for you to learn. A home loan estimate can help you compare lenders and decide which is the right one for you. It may include a breakdown of closing costs, interest rates, and the monthly payment and is generally helpful for borrowers trying to decide how much loan to apply for, how much down payment to make, etc. It’s never good to simply apply for the loan with the first mortgage lender you find; consumer watchdog agencies like the Consumer Financial Protection Bureau (CFBP) advise borrowers to identify several participating lenders and request loan estimates from all of them. “Contact | more...

September 4, 2019

HUD Disaster Resources

By Bruce Reichstein

The Department of Housing and Urban Development is reminding homeowners of the disaster resources available from federal agencies including HUD, the FHA, FEMA, and more. Those in federally declared disaster areas are eligible for special FHA home loan forbearance and other foreclosure avoidance measures. But loan forbearance and foreclosure avoidance are NOT automatic. All home owners still paying their mortgages at the time of the disaster should contact their lenders to discuss next steps and how to make arrangements to avoid home loan default and foreclosure. Lenders cannot help borrowers who do not do so, and it pays to be proactive, especially where FHA mortgages are concerned. FHA Foreclosure and Loss Mitigation Policy FHA lenders are given freedom to use “reasonable judgment in determining who is an ‘affected borrower’ in | more...

August 30, 2019

HUD Announces Expanded Disaster Relief Options

By Bruce Reichstein

The FHA and HUD have announced expanded disaster relief measures for those in federally declared major disaster areas. The changes (see below) must be implemented no later than November 30, 2019 but may be used by lenders right away. The FHA and HUD advise these changes will be reflected in a pending update of the FHA Single-Family Loan Handbook, HUD 4000.1. On Thursday, August 29, 2019, the Federal Housing Administration announced in a press release that the agency is, “expanding its foreclosure prevention options to allow borrowers in Presidentially Declared Major Disaster Areas (PDMDAs) with delinquent FHA-insured mortgages to bring their mortgages current without increasing their interest rates or principal and interest payments.” This is an expansion/enhancement of a temporary measure announced in 2018; Mortgagee Letter 2018-01 “temporarily amended” FHA/HUD | more...

August 29, 2019

FHA Home Loans For Manufactured Homes

By Joe Wallace

Many borrowers want to know if there are FHA home loans for manufactured homes, modular homes, or mobile homes. The short answer is yes, there are, but the FHA home loan program does feature some rules you should know before deciding on the right manufactured home for you. FHA Loan Rules For Manufactured Homes: Permanent Foundation Required FHA mortgage loan rules for manufactured housing (located in HUD 4000.1) include a requirement that the property is or will become attached to a permanent foundation that meets federal and state requirements. FHA home loans cannot be made for any mobile home that cannot or will not be attached to a permanent foundation and FHA mortgages cannot be approved for recreational vehicles or houseboats. Manufactured Home Age Requirements Mobile homes and manufactured homes | more...

August 27, 2019

Issues That Affect FHA Home Loan Approval

By Joe Wallace

There are some issues that can affect FHA home loan approval but don’t automatically mean the loan will be denied. Borrowers should be aware of the rules in the FHA single-family home loan handbook, HUD 4000.1 that tell a lender when more attention is needed for a specific loan application. For example, did you know there are two basic types of home loan approval processes? One is a more automated process that happens when the lender uses the Automated Underwriting System (AUS) to review the loan. AUS can be used for borrowers that don’t have certain complications with the loan; borrowers that do have certain issues with their application may find the lender is required to “downgrade” to a “manual” underwriting process that requires more scrutiny on the borrower’s financial | more...

August 19, 2019

How Job Changes Affect Your Mortgage Loan Application

By Joe Wallace

How do job changes affect your FHA mortgage loan application and chances for loan approval? Many first-time borrowers need to know this due to personal circumstances; it’s true that FHA home loan rules require the lender to verify two years of employment and it’s also true that an FHA borrower does not have to be with the same employer for two full years to be considered for an FHA mortgage. But what are the consequences of a job change in the FHA home loan process or immediately before a home loan application? If the job change is an upwardly mobile move that benefits the borrower and still meets FHA loan income requirements (for stability and the likelihood of the job to continue) there should be little to no negative effect | more...

August 16, 2019

The New FHA Condo Rules

By Joe Wallace

The Department of Housing and Urban Development official site announced new FHA condo loan rules in August 2019 that make it easier to purchase a condo unit, especially for condo projects not added to the FHA approved list. October 15, 2019 is the start date for the new rules that allow FHA loan approval for mortgages to buy condo units in projects that are not on the FHA approved list. Not all condo units are eligible for this consideration, and the FHA and HUD have issued a list of “single unit approval” requirements that include the following as described on the HUD official site: The individual condominium unit must be located in a completed project that is not FHA-approved; Condo projects that have 10 or more units are limited to | more...

August 13, 2019

FHA Loan Rules For Second Residences

By Bruce Reichstein

One thing you will read often about FHA single-family home loans? They are only intended for owner-occupied residences. So why do some borrowers hear of some homeowners being approved for FHA loans for a second house? There is a provision in HUD 4000.1 that allows an FHA mortgage for a “second” primary residence, as well as a provision for what the FHA and HUD term “secondary residences” under certain conditions. The FHA loan rules say secondary residences are defined as follows: “Secondary Residence refers to a dwelling that a Borrower occupies in addition to their Principal Residence, but less than a majority of the calendar year. A Secondary Residence does not include a Vacation Home. “ FHA loan approval may be possible for a secondary residence when the following applies: | more...