Articles Tagged With: Real Estate

September 4, 2015

Selling The Home You Purchased With An FHA Mortgage

We get many questions about appraisals, valuation and related issues. Many of the questions that come to us in the comments section come from home buyers, but a few come from those who want to sell the house they purchased with an FHA mortgage loan. One recent question in that area came from a reader who wanted to know what the best way to repair cracks in a basement wall might be, and whether or not the home should be put up for sale before the repair process was completed. The only way we can respond to questions like that is to say that it’s outside the scope of what we write about on this blog, but those looking for answers to questions in cases like these won’t be satisfied | more...

July 2, 2015

FHA Appraisals: Vapor Barrier Issues

By Joe Wallace

A recent reader question that arrived in our comments section involves an FHA appraisal that required a vapor barrier on all exposed dirt. The reader complained that the FHA appraiser didn’t explain how to correct the issue and asked us to define how it can be done. One objection to the FHA appraisal in this case was that the reader was under the impression that the FHA had removed the vapor barrier requirement from its list of minimum property requirements. While we aren’t experts on vapor barriers or how they are to be carried out, we can address the issue of being required to carry out a correction or repair that is not specifically required by FHA minimum property standards. It’s very important to know that FHA minimums are not | more...

April 30, 2015

“Second” FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I am in the process of selling my home. There was an appraisal done and it came in low. We negotiated with the buyers on that appraisal. Now I am learning they got another appraisal that was higher so they could get a higher loan amount for closing costs but will not provide the appraisal to us.” “By the way, this is FHA and apparently the lender never filed the first appraisal with the FHA. Additionally, the lender has now changed their story stating they paid for the first appraisal and that the buyer paid for the 2nd appraisal and therefore they dont have to give it to us for re-negotiations. This cant be legal? And surely I have recourse? We are set to close tomorrow, and | more...

April 27, 2015

FHA Loan Appraisals and Lender Standards: A Reader Question

By Joe Wallace

A reader asks, “I have a client that is FHA approved, and has had their appraisal done but can not locate the well. Well and septic have been tested and municipality has signed off on both stating they were ok with the way they are.” “My clients lender says no way, must meet the 50′ set back, other lenders say we can do it as long as you have the letter from the township My buyers dont want to start over as they are set to close on the house they are selling in 2 weeks. How can one bank say something different from another while following FHA guidelines?” There are several unanswered questions to go along with this reader question–are the lenders interpreting local or state building code or | more...

April 3, 2015

Is A Home Ever “FHA Approved”?

By Joe Wallace

A reader got in touch with us recently with a set of complaints about a home that was purchased using an FHA mortgage. The reader says, in part: “Please note that we have a home that was approved by FHA & Hud that has turned out to be a disaster. We have been through two of the programs to show that this house cannot be repaired with out costing more to repair than replaced…The people that was looking after us just laughed in the back ground as we talked to them and always adding another 4 or 5 thousand balance to our loan. In 2011 & 2012 We tried to repaid this house after being assured by FHA and Hud that it would be fine if just repaired in a | more...

What you should know about FHA 203(h) Loans For Disaster Victims

March 9, 2015

FHA Loan Questions: Seller Concessions

By Joe Wallace

A reader asks., “I saw a listing agent who stated in an MLS listing that the seller can only contribute up to 1% of sales price to an FHA qualified buyer’s closing costs. (She was implying not to ask for over 1% seller concession because of this FHA requirement). Is that correct? On your site I read that figure to be a maximum of 6%. Can you clarify please. The home is in Apache Junction, AZ (Phoenix suburb and county of Maricopa).” FHA loan rules state that any seller concession that exceeds six percent is considered an inducement to purchase and will result in a dollar-for-dollar reduction in the loan amount. This is true for all states, not just the one in the reader question, but it is important to | more...

January 8, 2015

FHA Mortgage Loan Closing Costs: Prepaid Items, Per Diem Interest

By Joe Wallace

In our last post, we answered a reader question about FHA loan closing costs. This type of question is important for borrowers to ask as the answers can help you save and prepare for the costs of getting a home loan. There are several items a borrower may be required to pay at or before the loan closes in order to finalize the transaction. Some of these items include pre-paid expenses such as per diem interest, and discount points (when the borrower chooses to pay these points). Pre-paid expenses are defined in HUD 4155.1 Chapter Five as follows: “Prepaid items are collected at closing to cover  accrued and unaccrued hazard insurance premiums  mortgage insurance premiums  taxes  per diem interest, and  other similar fees and charges.” | more...

October 29, 2014

FHA Loan Rules and Seller Costs: A Reader Question

By Joe Wallace

A reader asks, “What costs will a seller incur if a buyer is using an FHA loan to purchase?” That is a difficult question to answer for a variety of reasons–state real estate law, lender requirements and FHA loan rules all have a say in the closing costs of a FHA home loan. There’s no itemized list of seller costs listed in the FHA loan rulebook, HUD 4155.1, but the FHA does make a list of certain costs and/or seller contributions to the sale that are and are not permitted. For example, the borrower is not to be charged for pest/termite inspections. The borrower can’t pay for the lender’s legal counsel, and the FHA has a set of regulations that dictate how much the seller can contribute toward the sale | more...

July 3, 2013

FHA Loans: Broker and Agent Fees

By Joe Wallace

As with many other aspects of the FHA home loan process, there are rules and regulations that cover broker and real estate agent fees. Those rules are spelled out in Chapter Five of HUD 4155.1. In a section titled “Settlement Requirements Needed To Close” we find detailed rules on how such fees can be issued and paid. For example, FHA loan rules require real estate broker fees to be included in the HUD-1 settlement statement. The specific rule says, “If a borrower is represented by a real estate broker and must pay any fee directly to the broker, that expense must • be included in the total of the borrower’s settlement requirements, and • appear on the HUD-1 Settlement Statement.” The rules are different when the seller is paying a | more...