Articles Tagged With: FHA

January 19, 2018

How To Use An FHA Home Loan

Do you need to know how to use an FHA home loan? There are many things you can do with an FHA mortgage, or an FHA refinance loan. Some of your options include buying a home with more than one living unit, refinancing an existing loan to do rehab or repair work, and including energy-efficient upgrades into your new mortgage. Use An FHA Home Loan To Buy Your First Home FHA home loans are not specifically targeted at one type of buyer, but first time home buyers enjoy the lower down payment requirements and more lenient FHA credit requirements. First time home buyers may learn early that the FHA home loan program isn’t strictly for first homes, but that the participating lender has some kind of first-time buyer incentive. This | more...

January 18, 2018

FHA-To-FHA Refinance Loan Rules

By Bruce Reichstein

Do you know the loan rules for FHA-to-FHA refinance loans? There are many reasons why a borrower with an existing FHA mortgage could need or want to refinance. Some are interested in taking a portion of their home’ s equity in cash, others want lower monthly payments. Let’s examine the rules of FHA-to-FHA refinance transactions. How the FHA Defines Refinancing The rules governing FHA-to-FHA refinancing are found in a section of HUD 4000.1, the FHA loan handbook. It defines FHA refinance loans as follows: “A Refinance Transaction is used to pay off the existing debt or to withdraw equity from the Property with the proceeds of a new Mortgage for a Borrower with legal title to the subject Property.” There are a variety of FHA loan options when you are | more...

January 17, 2018

Who Can Apply For An FHA Mortgage? Part Two

By Joe Wallace

Who Can Apply For An FHA Mortgage? In our previous blog post we addressed some common misconceptions about FHA mortgages, but there is a long list of FHA home loan uses including refinancing, fixer-upper loans, and much more. Who can apply for an FHA home loan? You may find your own needs represented somewhere in this list of approved FHA loan uses. FHA Loans Are For Owner/Occupiers You can apply to buy a property up to four units, and act as a landlord to rent out the units you won’t be living in; FHA loans have an occupancy requirement so you cannot buy a home with an FHA mortgage unless at least one person obligated on the loan will live there as the primary residence. FHA Loans Are For U.S. | more...

January 17, 2018

Who Can Apply For An FHA Mortgage?

By Bruce Reichstein

Who can apply for an FHA mortgage? The answers may surprise you; there are misconceptions about FHA home loans that many have to this day, including who is eligible to apply and when. Do you know if you are eligible to apply for an FHA loan or refinance loan? FHA Home Loans Are For All Income Brackets There is no such thing as earning too much money to qualify for an FHA home loan. Some mistakenly believe that there is a maximum income for FHA home loans that excludes people who “earn too much”. This is not true. There is no maximum income limit for an FHA home loan. You will be required to furnish bank statements, pay stubs (electronic or otherwise), and tax documentation to establish your income, but | more...

January 16, 2018

What Is The Interest Rate For FHA Refinance Loans?

By Joe Wallace

What is the interest rate for FHA refinance loans? This is an important question since your interest rate will affect the overall cost of your refi loan over time, and it’s good to know how rates work before you apply for a new home loan. FHA mortgage loan and refinance loan interest rates have a variety of factors that affect how they are determined for your loan. There is no single determining factor that allows a lender to give a single rate to all applicants-your interest rate is determined based on application data, market forces, and other factors. Does The FHA Set Interest Rates On FHA Refinance Loans? The FHA and HUD do not set or regulate FHA mortgage loan and refinance loan interest rates, except to require that the | more...

Rehab Refinance Loans, reverse mortgages

January 16, 2018

Are FHA Refinance Loans Only For FHA Mortgages?

By Bruce Reichstein

Are FHA refinance loans only used to refinance existing FHA mortgages? The answer might surprise you, and we should begin by dispelling a long-time myth about FHA home loans and FHA refinance loans in the process. FHA Refinance Loans Are Open To All Financially Qualified Borrowers FHA loans have no income limit, and are not specifically targeted at one type of borrower. There is an impression that only first-time borrowers or first-time refinance loan applicants will be considered for FHA loan approval, but this is NOT TRUE. FHA loans require a minimum FICO score, have no income minimum or maximum, and have more generally lenient application requirements than many conventional mortgages. You cannot earn “too much” to be considered for an FHA mortgage. Your income is measured against your monthly | more...

January 12, 2018

Can Disaster Relief Grants Be Used As Money To Close An FHA Loan?

By Bruce Reichstein

Can disaster relief grants be used as money to close an FHA mortgage loan? In the wake of the many natural disasters in 2017, many home owners in Texas, California, Puerto Rico, and other affected areas want to know what their options are to recover, rehab, repair, or replace their homes. FHA loan rules require the lender to verify the source of all funds used as a down payment on FHA mortgage loans; down payment money (also known as a Minimum Required Investment or MRI) cannot come from unsecured loans, gifts with an expectation of repayment, or other unapproved sources. The FHA loan handbook, HUD 4000.1, have rules for down payments that are sourced in whole or in part by disaster relief grants. But what does the FHA consider to | more...

January 10, 2018

Bad Credit Scores And FHA Home Loans

By Joe Wallace

Bad credit scores and FHA home loans-do you know what the rules are for FHA credit requirements? FHA loan minimums and FHA lender standards may not be exactly the same, so it’s important to remember that the issues we discuss here are based around FHA minimum guidelines and that you’ll need to talk to a participating lender to see what other requirements must be met. Is There A Bad Credit FHA Home Loan? FHA loan rules require a 500 FICO score at the absolute minimum in order to qualify. Those who apply for an FHA loan with credit scores between 500 and 579 are required to make a higher down payment (10% of the adjusted value of the home) than those who apply with FICO scores 580 or higher. Remember, | more...

January 9, 2018

FHA Home Loan Rules For Buying Investment Properties

By Joe Wallace

What are the FHA home loan rules for buying investment properties? Regular readers of this blog may be confused by this question since our posts emphasize time and again that FHA single family home loans are for owner/occupiers and not for investment properties. So how can the FHA loan Handbook, HUD 4000.1, have rules that govern the purchase of an investment property with an FHA mortgage? The answer is actually fairly simple; FHA loan rules make an exception in certain cases. The FHA home loan policy in this area is explained on page 142 of HUD 4000.1, starting with a definition of the term “investment property”. According to the FHA, “An Investment Property refers to a Property that is not occupied by the Borrower as a Principal or Secondary Residence”. | more...

January 9, 2018

Is U.S. Citizenship Required For An FHA Home Loan?

By Bruce Reichstein

Is United States citizenship a requirement to be considered for an FHA mortgage? The answer may surprise you, but the FHA loan program is designed for a certain amount of flexibility, and the rules in this area are no exception. The rules governing this issue can be found in HUD 4000.1, the FHA loan handbook, which instructs the lender to request specific documentation including a potential borrower’s Social Security Number. According to page 131 of the handbook, “Each Borrower must provide evidence of their valid SSN to the Mortgagee.” FHA Loan Rules For Citizenship And Home Loan Approval According to HUD 4000.1, citizenship is not a prerequisite for FHA mortgage loan approval. However, borrowers will have to provide paperwork showing their status as either resident aliens or non-resident aliens. FHA | more...