Articles Tagged With: HUD

June 28, 2013

FHA/HUD Announce Relief For Alaska Flood Victims

The FHA and HUD have issued a press release announcing relief for victims of recent flooding in Alaska. According to HUDNo.13-100, released Thursday June 27, 2013, “U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to the State of Alaska and provide support to homeowners and low-income renters forced from their homes due to recent flooding.” This assistance came after the President made an announcement declaring parts of Alaska affected by the flooding to be federal disaster areas. According to the press release, “President Obama issued a disaster declaration for Alaska Gateway Regional Educational Attendance Area, Copper River Regional Educational Attendance Area, Lower Yukon Regional Educational Attendance Area, Yukon Flats Regional Educational Attendance Area and Yukon Koyukuk Regional Educational Attendance Area.” The federal | more...

June 20, 2013

FHA Loan Reader Questions: FHA Decision Credit Scores

By Joe Wallace

A reader asks, “Do all three credit scores on my credit report have to be in the 640 range in order to qualify for an FHA home loan?” FHA loan rules include a minimum credit score. Borrowers who have credit scores below this minimum are not eligible for FHA loan financing. But the minimums found in the FHA loan rules are not necessarily the minimums a financial institution will impose–and the bank is free to require a general higher standard applied equally to all borrowers according to Fair Housing laws. FHA loan FICO score minimums are as follows, as found on the FHA official site: However, many lenders will require a minimum credit score of 640. The reader wants to know if all his or her credit scores need to | more...

May 30, 2013

FHA Loan Credit Standards

By Joe Wallace

When applying for an FHA home loan, many borrowers are in the dark about credit score requirements and other issues related to FICO scores in general. We recently answered a reader question about FHA loan credit requirements and now is a good time to review FHA policy on FICO scores. The FHA requires the lender to use an available credit score to determine whether or not the borrower is eligible for an FHA home loan. The FHA has rules for interpreting or using FICO scores from credit reports. According to the FHA Frequently Asked Questions list on the official site: “When the credit report reflects: • 3 credit scores (one from each repository) – the middle score is used • 2 credit scores – the lower of the two scores | more...

May 23, 2013

FHA Announces Assistance For Homeowners in Oklahoma

By Joe Wallace

The FHA and HUD have announced disaster relief for victims of the recent tornado in Oklahoma. According to HUDNo.13-078, “HUD will speed federal disaster assistance to the State of Oklahoma in addition to resources being provided by Federal Emergency Management Agency (FEMA) and other federal partners. HUD will provide support to homeowners and low-income renters forced from their homes due to tornadoes and severe storms.” U.S. Housing and Urban Development Secretary Shaun Donovan has also reiterated current Federal Housing Administration policy, “that mortgage lenders should release insurance payments to homeowners rather than applying these funds toward outstanding mortgage debt” according to the press release. On Tuesday May 21, 2013, the President made a federal disaster declaration for Oklahoma counties including Cleveland, Lincoln, McClain, Oklahoma and Pottawatomi. A federal declaration allows | more...

May 20, 2013

Can Veterans Apply For FHA Home Loans?

By Joe Wallace

There are many reasons why a veteran might not want to apply for a VA home loan and choose an FHA mortgage instead. One such reason involves eligibility issues–a borrower who has purchased a home with a VA mortgage in the past may have complications that hold up getting eligibility restored. Others might have a personal preference depending on the circumstances–but regardless of the reasons why a veteran decides to investigate FHA loan options, they are definitely open to those who serve. What do FHA loan rules say about veterans who want to apply for an FHA mortgage? According to HUD 4155.1, “Military personnel are considered occupant-owners, and are eligible for maximum financing if a member of the immediate family will occupy the subject property as his/her principal residence, whether | more...

April 29, 2013

Deadline For New FHA MIP Policy Approaches

By Joe Wallace

The deadline for a new FHA mortgage insurance premium policy is approaching; beginning on June 3, 2013 most FHA loans endorsed on or after that date will be affected by the following changes as described in FHA Mortgagee Letter 2013-04: “For loans with FHA case numbers assigned on or after June 3, 2013, FHA will collect the annual MIP for the maximum duration permitted under statute.” That basically means that many affected FHA loans will feature annual MIP for the duration of the loan rather than cancelling the MIP after a certain point. Other FHA loans will have MIP where there was none required previously. Additionally, Mortgagee Letter 2013-04 states, “For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP)) | more...

March 12, 2013

FHA Loan Answers: Credit Evaluations

By Joe Wallace

A reader asks, “If my husband has a judgement against him from an old credit card debt, can we put the house in my name and use my credit only and still get approved? Or will they check him at some point anyway and reject me because of his judgement?” The answer to this reader question can be complicated. A married FHA loan applicant who is not affected by community property laws in his or her state may be able apply for an FHA loan without the participation or financial obligation of the spouse. As long as state laws don’t state otherwise, a married FHA loan applicant should be able to apply for an FHA guaranteed mortgage without obligating anyone else on the loan. In cases where more than one | more...

March 1, 2013

FHA Loan Reader Questions: First Time Homebuyer Requirement?

By Joe Wallace

A reader asks, “I’m not a first time home buyer, I have a conventional loan for a home that I’m planning to keep as a rental home. Can I qualify for a purchase FHA loan on a primary home?” One of the common misconceptions about FHA home loans is that you MUST be a first-time home buyer in order to qualify for one. This is not true. You may have state or local homebuyer assistance programs in your area that do require the applicant for that program to be a first time buyer, but FHA loans are open to all qualified applicants. The real issue in this reader question has more to do with debt-to-income ratios (DTIs)–will the FHA lender approve a buyer who already owns a home? Single-family new | more...

February 8, 2013

FHA Loan FICO Score Requirements: A Reader Question

By Joe Wallace

A reader asks, “My credit score is 678. When my husband tried to get his FICO score, he was told he couldn’t because he did not meet the minimum scoring requirements. (He is just starting to build credit and has nothing). Will we be able to qualify for an FHA loan based on my credit score?” FHA loan rules have a lot to say on this. In HUD 4155.1, you’ll find the following under the section titled Analyzing The Borrower’s Credit: “Neither the lack of credit history nor the borrower’s decision not to use credit may be used as a basis for rejecting the loan application. We also recognize that some prospective borrowers may not have an established credit history. For those borrowers, and for those who do not use | more...

January 28, 2013

FHA Loan Reader Questions: First Time Home Buyers and Down Payments

By Joe Wallace

A reader asks, “Is it true the first time buyer with an FHA Loan can purchase the home with no money down?” The FHA loan program is similar in some ways to another government-backed loan program–VA loans. VA guaranteed loans are for eligible veterans and feature a no-down payment option unique to that program. FHA home loans, which are also government guaranteed mortgage loans issued by a private lender, do not feature a no downpayment option. According to FHA home loan rules as described in Chapter Two of HUD 4155.1, says the following about down payments on FHA loans in a section titled Maximum Mortgage Amount For A Purchase: “The maximum mortgage amount that FHA will insure on a purchase is calculated by multiplying the appropriate loan-to-value (LTV) factor by | more...