Articles Tagged With: FHA

June 6, 2018

FHA Loan Rules For Down Payments And Cash To Close

What are the FHA loan rules for down payments and the cash required to close the deal? There are many requirements in this area, but one very important detail exists that borrowers should know that will definitely help them in the early planning and budgeting stages of the mortgage. FHA loan rules require that certain expenses be kept separate from down payment requirements, and that can make a big difference in how you approach the budgeting part of home loan planning. FHA loan rules for both down payments and closing costs require that the sources of these funds be FHA-approved, which means no credit card cash advances, payday loans, or similar types of indebtedness can be a source of the closing costs or down payment. That’s important because those FHA | more...

June 4, 2018

What Does It Mean To Get An FHA Mortgage Loan Case Number?

By Bruce Reichstein

For those new to the home loan process, or just new to FHA mortgage loans, the question, ‘What Does It Mean To Get An FHA Mortgage Loan Case Number?” is a good one to ask. What is this process and how does it work? It does not matter if you are applying for an FHA 203(k) rehab loan, a typical new purchase FHA mortgage, or even an FHA One-Time Close construction loan; when a borrower is serious enough to start the loan application paperwork the FHA case number process will begin. HUD 4000.1, the FHA Loan Handbook, says an FHA case number is ordered by the lender when there is an active mortgage loan application for the property a borrower wants to purchase. What is required of the borrower to | more...

May 30, 2018

FHA Home Loans For Manufactured Housing Classified As Condo Projects

By Bruce Reichstein

Are there really FHA home loans for manufactured housing classified as condo projects? Believe it or not, the FHA loan rules in HUD 4000.1 state that such loans are indeed available under the FHA mortgage program in addition to FHA One-Time Close construction loans, FHA Rehab loans, and other options. How does the FHA Loan Handbook describe these mortgages? “Manufactured Housing is a Structure that is transportable in one or more sections. It may be part of a Condominium Project, provided the project meets applicable FHA requirements.” FHA loans for manufactured housing, regardless of whether it is part of a condo project or not, must meet certain requirements including size, purpose, and how the home is delivered to the borrower. Specifically, manufactured housing eligible for FHA mortgage loans must be | more...

May 28, 2018

Happy Memorial Day 2018!

By Bruce Reichstein

Happy Memorial Day! We pause today from our usual posts about FHA home loans, refinance loans, FHA One-Time Close construction loans and related topics to recognize the sacrifices made by our women and men in uniform. Thank you to all who have served-from those who have gone before to those who are about to enter their first year in uniform in service to our country. We return with our regularly scheduled posts on Tuesday. Thank you for reading, and have a safe and happy Memorial Day 2018. We are glad you stopped by!

May 21, 2018

FHA Loans, Wells, And One-Time Close Construction Loans

By Bruce Reichstein

Borrowers who apply for FHA loans may not be clear on whether or not a property served by a well instead of being connected to the local utility is eligible for an FHA mortgage. Is the presence of a well a problem for FHA loan approval? And what about FHA loan standards for FHA One-Time Close / Single-Close construction loans? HUD 4000.1 contains guidelines for these issues including the acceptability of a property served by a well instead of a water utility. Borrowers will be relieved to know that FHA mortgage rules do not automatically rule out a property just because a well is present, but that well must meet both FHA minimum requirements and any applicable health code or other local ordinances. For One-Time Close / Single-Close construction loans, | more...

May 17, 2018

FHA Loans For Self-Employed Borrowers

By Joe Wallace

Are there FHA home loans for self-employed borrowers? There’s a persistent myth about FHA loans and self-employment; that working for yourself is a serious disadvantage when it comes to home loan approval. What’s the reality? FHA Home Loans Are Available For Financially Qualified Self-Employed Borrowers FHA loan rules in HUD 4000.1 state that being self-employed is an acceptable form of primary income as long as that income meets certain criteria. Borrowers will be required to furnish tax returns, business plans, profit-and-loss statements and other documentation as required by the lender to verify income. It may take some extra time to gather all the required information your lender needs, but you should come to the application or preapproval process knowing how your income has changed over time. Self Employment Minimum Requirements | more...

May 16, 2018

FHA One-Time Close Construction Loans And Other Government-Backed Mortgages

By Bruce Reichstein

House hunters looking for government-backed mortgages (as opposed to conventional mortgages which may have higher down payment requirements and other features) have a variety of options to choose from. Are you in the market for an FHA construction loan such as the FHA One Time Close construction mortgage? Do you need to build instead of buy? FHA One-Time Close / Single-Close Construction Loans Borrowers who choose the FHA One Time Close / Single-Close mortgage are applying for a single mortgage loan covering both the construction phase and the mortgage itself. These loans are for those who want to build a home from the ground up, and there are additional requirements for these loans regarding escrow, inspections, and when mortgage payments are scheduled to being. One Time Close (OTC) loans or | more...

May 15, 2018

FHA Home Loans And Occupancy Requirements

By Bruce Reichstein

What are the occupancy requirements for FHA home loans? Like many government backed loans, there are general occupancy requirements a borrower must follow as a condition of loan approval. Whether you are buying an existing construction home or having one built for you using an FHA One Time Close construction loan, some guidelines for occupancy will apply. FHA Definition Of Occupancy, Principal Residences FHA loan occupancy rules basically require that the borrower live in the home full time, using it as the primary residence or principal residence instead of a vacation home, time share, or other intermittent occupancy arrangement. How does the FHA specifically define “principal residence”? According to HUD 4000.1: “A Principal Residence refers to a dwelling where the Borrower maintains or will maintain their permanent place of abode, | more...

May 15, 2018

FHA Loan Rules For Appraisals: What Borrowers Need To Know

By Joe Wallace

What do borrowers need to know about FHA loan appraisal rules? We field reader questions every month that include queries about the appraisal process and whether or not a certain type of condition is permitted in a home to be purchased with an FHA mortgage. Some recent reader questions go along these lines: “Is an unfinished basement acceptable in a home I’m buying with an FHA mortgage?” “Does the garage have to be wired for electricity in order to be approved for an FHA loan? and, “The home I want to buy is served by a well instead of being connected to a local utility. Is this permitted?” There are some FHA loan rules for appraisals that may address some or all of these issues, but there’s a very important | more...

May 14, 2018

FHA Home Loan Approval And Your Credit Report

By Bruce Reichstein

What do potential home loan borrowers need to know about FHA loans and credit reports? There are some very simple things that some don’t realize going into the home loan process that can definitely affect your participating FHA lender’s ability to approve your mortgage. FHA Loan Credit Checks The lender is required by FHA home loan rules to pull a loan applicant’s credit reports to review credit scores, credit history, and look for overall patterns of reliable use of credit. However, some borrowers mistakenly assume that the lender will look at a credit report once, make the notes, and never go back to the credit report again. This is not necessarily the case. Your FHA lender is charged with making sure that a borrower’s credit position is stable and that | more...