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Articles Tagged With: HUD

February 15, 2012

FHA Loan Questions: Is There Any Way Around My Bankruptcy?

By Joe Wallace

A reader asks, “Bankruptcy filed just 2 years ago, is there a way around that? Have a descent (sic) income, employment and debt to income ratio.” There are two types of bankruptcy borrowers sometimes ask about in these cases. One is Chapter 7, where the borrower has debts discharged. The other is Chapter 13, where borrowers have a restructured payment plan enforced by court order. For Chapter 7, FHA loan rules require a minimum two year waiting period from the discharge of the bankruptcy before a borrower may apply for a new FHA mortgage. There is no workaround for this two-year minimum, even when the borrower has tried to reestablish good credit and employment in the wake of the bankruptcy. However, for those who have filed Chapter 13 bankruptcy, FHA | more...

 

February 14, 2012

FHA Loan Debt To Income Ratios: Do Student Loans Count?

By Joe Wallace

FHA loans require the lender to calculate the borrower’s debt-to-income ratio to determine if the applicant can realistically afford to make a monthly FHA mortgage payment. The borrower’s debts are reviewed and compared to the amount of money coming in–if the ratio is within FHA requirements, the loan can be approved (assuming the borrower meets the other FHA loan criteria). Some borrowers are rightfully concerned about the amount of debt they bring to the bargaining table. Too much debt and the borrower could be denied the FHA home loan. But not all financial obligations are necessarily counted toward the borrower’s debt-to-income calculation. FHA loan rules say some debts, usually with 10 months or less remaining on the payment agreement, do not have to be counted. The lender may choose to | more...

 

February 7, 2012

FHA Loan Standards: Exceptions to the Rules?

By Joe Wallace

The FHA has standards for qualifying for an FHA insured mortgage including income, employment, credit score and other factors. In most cases, borrowers who don’t meet the minimum required credit score or debt-to-income rations can’t qualify for an FHA loan. But are there exceptions? For example, could a borrower who has a debt-to-income ratio that’s too high still get an FHA loan approved? And why would the FHA approve a loan when the applicant doesn’t meet FHA loan standards? FHA loans include an option for lenders to review any “compensating factors” the borrower might bring to the bargaining table. For example, one such factor has to do with the borrower’s ability to pay–and a history of being able to pay–even though the debt-to-income ratio might exceed FHA standards. According to | more...

 

February 1, 2012

FHA Announces New Fair Housing Rules

By Joe Wallace

Nearly 30 percent of same-sex couples were treated differently when trying to buy or rent a home. That figure was published in a 2007 report by Michigan’s Fair Housing Centers. FHA and HUD have announced new regulations designed to end that sort of discrimination and much more. According to HUDNo.12-014, new regulations have been implemented to “ensure that HUD’s core housing programs are open to all eligible persons, regardless of sexual orientation or gender identity” according to the press release.

 

January 31, 2012

FHA Loans, Effective Income, and Alimony

By Joe Wallace

One important section of the rules for FHA loans states a borrower’s income must be verified by the lender as “effective income”. This means that the income must be stable and likely to continue. Some types of income can’t be counted. A part-time business selling goods on eBay, for example, might not qualify. But what about other types of non-employment income like child support, alimony, or maintenance payments? There are plenty of borrowers who receive or are eligible to start receiving these types of payments. Does the FHA recognize them as effective income? In certain cases, yes. Alimony, maintenance payments as part of a divorce decree, and/or child support can qualify and be counted toward a borrower’s debt-to-income ratio provided the payments meet standards set by they FHA. According to | more...

 

January 13, 2012

FHA Loan Reader Question: Irregularities in the FHA Loan Process

By Joe Wallace

The FHA has rules which must be followed in order for participating lenders to legally take part in the FHA loan guaranty program. There are also federal laws which apply to all lenders above and beyond FHA regulations. With this in mind, we reviewed a reader comment/question which came in recently: “A friend of ours just told us she is closing on an FHA loan tomorrow.

 

December 26, 2011

HUD Offers 175-Language Pilot Program

By Joe Wallace

A recent press release from the Department of Housing and Urban Development could help some FHA loan applicants who need help with understanding their borrower’s rights. According to HUDNo. 11-29, released on FHA.gov December 22, 2011, “The U.S. Department of Housing and Urban Development (HUD) today announced that it has launched the HUD Language Line, a telephone language service pilot that will offer live, one-on-one interpretation services in more than 175 languages.” “Accessible throughout the nation, the language line will help HUD staff to better communicate with Limited English Proficient (LEP) individuals and families about HUD housing programs, services, and activities.” The pilot program, which runs through September 2012, is funded under the Consolidated Appropriations Act of 2010, “to help ensure that individuals have access to information in languages other | more...

 

December 14, 2011

FHA Energy Efficient Mortgages

By Joe Wallace

Borrowers new to the FHA insured loan program should know about the FHA loan option called an Energy-Efficient Mortgage or EEM. An FHA EEM is intended to add a set amount to the FHA home loan in order to finance upgrades or improvements to the home that result in a more energy efficient property, which saves money over the long term. According to FHA loan rules, eligible properties for an EEM loan include, “New and existing one to four unit properties, including one unit condominiums and manufactured housing properties”. EEM loans are for new purchase transactions or refinancing, including the FHA 203(k) Rehabilitation Loan, FHA 203(h) loans for victims of natural disasters and standard FHA 203(b) loans. Borrowers who are purchasing multi-unit property should know an FHA EEM is calculated | more...