July 15, 2011
FHA loan applications require the borrower to submit information on past and current employment including gross income, how long the job has lasted, and other details. This data is not accepted at face value by the lender; the FHA requires the loan officer to verify sources of income to make sure they are legitimate and acceptable.
July 11, 2011
The FHA offers help for those in trouble on their FHA mortgages in the form of the Loss Mitigation Program. The FHA recently sent out additional guidance aimed to specifically help homeowners who struggle to pay on their FHA loans during period of unemployment. The FHA’s “Unemployment Special Forbearance” was temporarily amended and clarified to further help prevent unemployed homeowners from going into default and foreclosure. “In Mortgagee Letter 2000-05, FHA provided mortgagees with additional guidance concerning the Loss Mitigation Program that all mortgagees must follow, when applicable, to reduce FHA insurance losses in those circumstances, as determined by the mortgagee, where delinquent mortgagors might be able to find an alternative to foreclosure.” Previous changes to the program as described in past FHA Mortgagee Letters permitted FHA lenders to “offer | more...
June 30, 2011
Real estate can be a confusing business for those not used to dealing with the daily ins and outs of the industry. But a first-time FHA borrower isn’t the only one likely to have some initial trouble navigating the rules and regulations covering real estate transactions, FHA loan requirements and other issues. A first-time applicant for refinancing also has plenty of questions about the process. One of the most frequently asked questions about refinancing involves an important ownership issue. Suppose a borrower purchased a home with an FHA insured loan, and either had the loan assumed, added someone to the title, or otherwise brought another person into property ownership without having them named on the original FHA loan? Can someone apply for an FHA refinancing loan if they own the | more...
June 14, 2011
In a tough housing market, house sellers often must include incentives to make their property more attractive to a borrower. In other words, the seller isn’t just putting the home up for sale, there are a few bonuses thrown into the deal such as helping with the cost of pre-paid expenses, paying discount points or other things. Some sellers will throw in some appliances as an incentive, others might offer to furnish a new large screen television, etc. When it comes to FHA loans, there are limits on how much and how far such incentives can go. The seller is not forbidden to offer any incentives, but there’s a difference between a contribution and what the FHA considers “inducements to purchase”. An inducement to purchase, while not illegal, does result | more...
May 31, 2011
Recent headlines all across America have told of floods, tornadoes and other natural disasters, all of which affect FHA borrowers, their homes and their mortgages. When an area is declared a major disaster area by the President of the United States, FHA borrowers should know there are programs that can help them in the wake of the disaster, provide help and forbearance on FHA loans, and even temporarily stop foreclosure proceedings. FHA officials urge borrowers to contact the FHA and the lender as soon as possible in the wake of a disaster as there are many steps that need to be taken in order to get help, advice and work on repairing a home damaged in the disaster area. But even before those calls are made, the FHA has begun | more...
May 16, 2011
There are many situations where a parent and child may wish to apply for an FHA insured home loan together. One of those is where a parent co-borrows on an FHA loan for the child in college, purchasing what some in the real estate industry call a “kiddie condo”. In such cases, the parent co-borrows on the loan but does not occupy the property. In most cases an FHA loan with a non-occupying co-borrower would be limited to 75% of the loan-to-value ratio, rather than the maximum loan amount. But FHA rules say when it comes to family members, the rules are different. A parent and child can take out an FHA home loan and get the maximum amount of FHA financing available (as long as the borrowers otherwise qualify). | more...
May 13, 2011
The rules for FHA insured loans have long included manufactured homes; the FHA recognizes that not all borrowers need or want a tradition suburban home, condo, or multi-family unit. Manufactured homes have their own unique requirements in order to be approved for FHA mortgages, and in order to be eligible for FHA financing, the home must meet these requirements to the letter unless otherwise specified in FHA loan requirements. For starters, a manufactured home is not eligible for an FHA insured loan unless it has at least 400 square feet of floor space. It must be built upon and remain on a permanent chassis and foundation. That foundation must be considered permanent and meet FHA specifications. The home must be classified as real estate, which goes back to the permanent | more...
May 3, 2011
FHA loan applicants have many things to budget and plan for. Mortgage insurance is one of the costs associated with a home loan, and FHA loan applicants are required to pay an annual mortgage insurance premium. The reason for mortgage insurance is to protect the lender against a loss associated with a default/foreclosure on the home. An FHA borrower making a down payment of less than 20% is required to carry mortgage insurance. But borrowers should know that mortgage insurance isn’t required for the entire term of the loan. The insurance is automatically terminated based on the nature of the loan, the length of the loan term and the Loan to Value ratio or LTV. According to the FHA official site, for all FHA mortgages closed after January 1, 2001, | more...
May 2, 2011
First-time home buyers looking into an FHA mortgage soon learn about a variety of requirements. Some are the rules set by a particular lender, others are dictated by the Department of Housing and Urban Development, while others are established by state laws that govern retail banking procedures. Of these guidelines, often the state laws vary the most from place to place. One example of this is the
April 29, 2011
There are many types of FHA insured loans available for single-family residences. Borrowers can apply for a traditional home loan with a down payment, fixed interest rate and a 15 or 30-year mortgage. But there are plenty of other loans which can be applied for including; Section 203h Insured Mortgage for Disaster Victims Section 255 Home Equity Conversion Mortgage (HECM) Section 203k Rehabilitation Mortgage Energy-Efficient Mortgage Program (EEM) Adjustable rate mortgages Section 248 Indian Reservations and Other Restricted Lands Title I Home Improvements Regardless of what loan product is preferred, for new purchases and many FHA refinancing options, borrowers must fill out an application giving information that includes employment and residence history, detailed accounts of outstanding debts and monthly financial obligations and much more. The FHA requires this information in | more...