Articles Tagged With: HUD

March 14, 2016

Mortgage Loan Interest Rate Trends: Pushing Higher

Mortgage loan interest rates moved higher last week–every day except one (Tuesday) saw small moves that, over time, have pushed rates closer to 4.0% (for 30-year fixed rate conventional mortgages) best-execution. 30 year fixed-rate mortgages ended the week on Friday at a best execution range between 3.75% and 3.875%. In some cases the move higher is reflected in closing costs rather than an actual rate change. But if the upward trend persists we could see this range disappear in favor of 3.87% or a new range with 3.875% at the low end. FHA mortgage rates have remained in their best execution comfort zone range between 3.25% and 3.5% but it is likely not long before this range goes away. FHA rates do take their time catching up to the changes | more...

When Is An FHA Loan Better Than A Conventional Loan?

March 9, 2016

FHA Loan Rules in HUD 4000.1 on Maximum Loan Amounts

By Joe Wallace

When the FHA and HUD published HUD 4000.1, that document became the comprehensive rule book for FHA single family home loans and refinance loans. Many policies were updated, amended, altered or restated and there’s no way to compare all the changes with the previous version of FHA home loan rules found in HUD 4155.1 and HUD 4155.2. With that in mind we have been examining important sections of HUD 4000.1 to learn what the most up-to-date FHA loan policies are. Today we’re examining the FHA loan rules for maximum loan amounts. HUD 4000.1 begins this section by explaining the basics: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios | more...

March 8, 2016

FHA Loan Rules For Home Sales: HUD 4000.1

By Joe Wallace

The FHA Single Family Mortgage Loan program is regulated by the rules published in HUD 4000.1. These rules cover everything from appraisal requirements and FICO score minimums to Fair Housing requirements and responsibilities. HUD 4000.1 also establishes requirements for the home loan transaction–for example, did you know FHA mortgage loan rules have specific parameters for who can sell the property to the borrower purchasing with an FHA mortgage? HUD 4000.1 clearly states: “To be eligible for a mortgage insured by FHA, a Property must be purchased from the owner of record. The transaction may not involve any sale or assignment of the sales contract.” How is the lender required to establish that the seller is the owner of record? FHA loan rules say the lender must, “obtain documentation verifying that | more...

March 7, 2016

HUD 4000.1 Rules On Down Payment Assistance

By Joe Wallace

FHA home loans require a minimum 3.5% down payment as a condition of the loan. In some cases, depending on state law, the availability of a program, and other factors, certain borrowers may be eligible for some form of down payment assistance. This assistance is often intended for first time home buyers, which may create some confusion–it’s easy to mistakenly assume FHA loans themselves offer some kind of incentive for first time home buyers, or that the FHA provides down payment assistance. Neither of those two things are true–the FHA offers no preferential treatment to first-time buyers nor does it require more of second-time buyers. The FHA itself does not offer any form of down payment assistance. However, the FHA single family home loan program rule book, HUD 4000.1, does | more...

February 26, 2016

FHA Loan Mortgage Insurance Premium Rules

By Joe Wallace

When you purchase a home using an FHA mortgage, you’ll be required to pay an Up Front Mortgage Insurance Premium (UFMIP) and monthly mortgage insurance premium (MIP). The rules governing this mortgage insurance are found in HUD 4000.1 and it’s important to know them before you start budgeting and planning for your new mortgage. FHA loan rules covering this insurance begin by defining terms. “FHA collects a one-time Upfront Mortgage Insurance Premium (UFMIP) and an annual insurance premium, also referred to as the periodic or monthly MIP, which is collected in monthly installments.” One thing important for borrowers to know is that the FHA does not consider these payments to be part of the mortgage guaranty limit–this is a fee assessed after those limits are calculated, even though the Up | more...

February 25, 2016

Mortgage Rate Trends: Sideways To Lower

By Joe Wallace

Mortgage loan rates this week to date have been either holding their own (Monday) or moving slightly lower (Tuesday and Wednesday). While market activity did see some lenders raising rates, overall best execution levels are still at 3.625% for 30-year fixed rate conventional mortgages. FHA loans are still within a best execution range between 3.25% and 3.5%, some of the most favorable rates seen in quite some time. “Best execution” refers to rates offered to the most extremely well-qualified borrowers. Your FICO scores, loan repayment history and other financial qualifications will determine your access to these rates. Your experience may vary; the rates you see listed here are not available to all borrowers or from all lenders. Right now, rates are lower because of negative economic factors (among other things)–it | more...

February 23, 2016

HUD Announces Additional Funding For Housing Counseling Grants

By Joe Wallace

There are many times when, in the course of answering reader questions or discussing issues related to FHA loan prep, that we advise people to contact the FHA directly to request a referral to a HUD approved housing counselor. Housing counseling can be an important help for people–especially first time home buyers–who aren’t sure whether they qualify for an FHA mortgage or how to get started preparing for one. HUD has announced additional funding for housing counseling. According to a press release issued Friday February 19, 2016, “The U.S. Department of Housing and Urban Development (HUD) today announced it is making $40 million in grants available to support hundreds of housing counseling organizations across the country that assist families, including those buying their first home, struggling to locate affordable rental | more...

February 10, 2016

HUD Settles Connecticut Fair Housing Discrimination Case

By Joe Wallace

The Department and Housing and Urban Development and a group of Connecticut landlords have reached a settlement in a housing discrimination case. According to a HUD press release, “The U.S. Department of Housing and Urban Development (HUD) today announced an agreement with a group of Connecticut landlords to resolve allegations they discriminated against families with children. HUD reached the agreement with New Britain-based Green New Britain, LLC, and PBJ Management, and their on-site property manager for allegedly refusing to rent a two-bedroom apartment to a single mother and her two young children.” Violations of Fair Housing Act laws can affect the home buying process at every level. In this case, the victims were renters, but plenty of people seek rental housing while searching for a new home to purchase. The | more...

February 4, 2016

HUD Reaches Settlement In Home Loan Discrimination Case

By Joe Wallace

The Department of Housing and Urban Development issued a press release this week announcing a $1.9 million settlement with a bank in Tennessee over a housing discrimination complaint. According to HUDNo.16-009, the settlement with First Tennessee Bank resolves “allegations that the bank discriminated against African-American and Hispanic applicants by denying them mortgage loans and by allegedly failing to place bank branches in minority-concentrated areas” according to the press release. The Fair Housing act makes it illegal to discriminate, according to the HUD official site, “in the terms, conditions, or privileges of sale of a dwelling because of race or national origin. The Act also makes it unlawful for any person or other entity whose business includes residential real estate-related transactions to discriminate against any person in making available such a | more...

February 2, 2016

FHA Mortgage Loan Down Payment Rules

By Joe Wallace

FHA loans require a minimum down payment of 3.5%–that’s typical for many FHA mortgages. In some cases, depending on the nature of the loan and the borrower’s financial qualifications and FICO scores, the required down payment may be higher. But no matter what the down payment amount might be (and it will vary from loan to loan) the FHA has specific rules governing the sources of and verification for down payment funds. The FHA loan rulebook for single family mortgage loans is HUD 4000.1, which refers to the down payment as a “minimum required investment”: “Minimum Required Investment (MRI) refers to the Borrowers contribution in cash or its equivalent required by Section 203(b)(9) of the National Housing Act, which represents at least 3.5 percent of the Adjusted Value of the | more...