Articles Tagged With: Real Estate

FHA One-Time Close Construction Loans In 2019

February 15, 2017

Switching Lenders: The FHA Loan Rules in 2017

Home loans sometimes feature complications. A borrower may decide to cancel the transaction altogether, have a change of mind on certain details of the mortgage, or in some cases switching lenders may be required. What are the FHA loan rules for switching lenders? Borrowers should know that the FHA loan rule book, HUD 4000.1, has some specific instructions in this area. Borrowers can expect the loan rules to function in some very specific ways should this be needed. According to HUD 4000.1: “The original Mortgagee must assign the case number to the new Mortgagee using the Case Transfer function in FHAC immediately upon the Borrowers request” (emphasis ours). The case number mentioned here refers to the FHA-assigned number required to move forward with the mortgage. Having an FHA case number | more...

February 15, 2017

Mortgage Rates: Four Days Of Moving Higher

By Joe Wallace

In the short-term, mortgage rates have been on an upward swing. Tuesday’s rate activity had early higher moves, but with recovering later in the day, resulting in a continuation of the recent range of conventional rates but with more lenders reporting the higher part of that range. 30-year fixed rate conventional mortgages are, at the time of this writing, being reported at a best-execution range between 4.125% and 4.25%, but as mentioned above the more common rates are found at or near the upper end. FHA mortgage rates are holding at 3.75% but with the current short term upward trend, it’s not clear how long that best execution rate may persist. FHA mortgage rates tend to vary more among participating lenders than their conventional counterparts. It’s best to shop around | more...

February 14, 2017

FHA Loans And Work Permits: A Reader Question

By Joe Wallace

Are work permits required for FHA loans when the applicant is a legal permanent resident alien or non-permanent resident alien? A reader asks, “So if a person had a work permit but never renewed it, but has been doing taxes with his/her ss# and is currently working does that mean there not qualify for FHA? Or does the legal status have to be current?” FHA loan rules in HUD 4000.1 are clear that a borrower is not required to be a U.S. citizen in order to qualify for an FHA mortgage loan. However, legal status is required-those in the United States illegally cannot qualify for an FHA loan. For permanent resident aliens, HUD 4000.1 states: “A Borrower with lawful permanent resident alien status may be eligible for FHA-insured financing provided | more...

February 9, 2017

FHA Loans: Purchase, Rehab, Refinance

By Joe Wallace

FHA loans are a good option to consider, especially if you are looking for an alternative to the comparatively high down payment requirements of many conventional mortgages. But do you know all of your FHA mortgage options? HUD 4000.1, the FHA single family home loan rule book, describes the basic options borrowers can choose from. FHA loans are not just for new purchases-you can apply for a refinance loan, or you can apply to purchase and rehab a property you intend to live in as your primary residence. HUD 4000.1 describes your FHA loan options starting with the most typical FHA mortgage: Purchase Loans and Construction-to-Permanent Loans “The Borrower may finance the purchase of an existing one- to four-unit residence, and may also finance construction of a one- to four-unit | more...

February 6, 2017

FHA Loans Following Short Sale Or Foreclosure

By Joe Wallace

Hands down, some of the most-asked questions we get in our comments section involve the FHA loan rules for borrowers who have a short sale or foreclosure on their credit record. It’s easy to assume that a new home loan isn’t possible after a short sale or foreclosure, but is this true? There are several factors that can determine whether a borrower is able to get a new loan or not under such circumstances, and it’s very important to remember that your credit activity, state law, lender standards, and your FICO scores will all play a role in whether a new loan can be approved or not. FHA loan rules often set benchmarks in this area but don’t have the final word when state law or lender standards also come | more...

January 30, 2017

HUD Announces Agreement In Fair Housing Cases

By Joe Wallace

HUD has announced agreements with insurance companies in Ohio and Florida following an investigation into violations of Fair Housing Act regulations. We occasionally devote space to these issues because even in situations where the violations involve rental housing or other non-FHA loan transactions, they can affect borrowers seeking to apply for FHA loans. Some borrowers need rental housing to use in the planning stages of a mortgage before they can purchase a home, others may find themselves forced to house hunt due to job relocations, etc. Fair Housing laws protect Americans at all stages of the process of finding a home regardless of renting or buying. This most recent announcement of Fair Housing action from HUD states, “The U.S. Department of Housing and Urban Development (HUD) announced agreements with two | more...

January 30, 2017

FHA Appraisals and Inspections: A Reader Question

By Joe Wallace

FHA appraisals are NOT the same as home inspections. This week we received a question about the appraisal process that serves as a reminder of this. A reader asks: “I purchased a home that was funded by FHA but the foundation is in significant disrepair it. There are whole sections where the beams are not being supported by anything therefore the beams will eventually not be able to sustain the floor. Approximately 30 Jacks or posts need to be added, addition to a few beams, most significantly in one 8 X 31-foot section of the house where there is nothing supporting it other than the outside foundation wall on one side.” “Basically it needs $35.000+ of work. The FHA guideline says that a structure has to be in good repair | more...

Will My Home Loan Application Be Approved?

January 27, 2017

Identity of Interest Transactions: An FHA Loan Question

By Joe Wallace

Do you know how FHA loan rules affect the sale of a home deemed an “identity of interest” transaction? A reader asks, “My husband and I have a contract to purchase his parents home that they currently live in. This is their principal residence.” “My loan officer is telling me that even though it is their principal residence and we are purchasing as our principal residence that the 85% LTV cannot be exceeded and we have to put 15% down. Is this correct?? If not, then what can I do to get them to make the exception? We were already pre-approved for 3.5% down.” FHA loan rules governing identity-of-interest transactions do feature a higher down payment requirement in many cases. HUD 4000.1 defines such transactions as follows: “An Identity-of-Interest Transaction | more...

January 9, 2017

Collection Accounts and FHA Loans

By Joe Wallace

We’ve had some recent questions about home loans and collection accounts lately; in light of those questions it seemed like a good time to review the FHA loan rules on collection accounts as found in HUD 4000.1. The FHA loan rule book has instructions for the lender on what to do when reviewing such credit report data and it never hurts to know what your loan officer’s marching orders are in this area-at least where FHA minimum standards are concerned. The information below may be supplemented or affected by lender standards, so know that you’ll need to see what’s possible with a specific lender if any of the rules quoted here apply to your circumstances. Lender standards will definitely apply in addition to what’s found in HUD 4000.1. Let’s begin | more...

When Is An FHA Loan Better Than A Conventional Loan?

December 30, 2016

Property Types Eligible For FHA Mortgages in 2017

By Joe Wallace

FHA mortgages for single family residences include a wide variety of eligible property types. You can purchase a typical suburban home with an FHA loan, a condo unit, manufactured home, modular home, or other approved structure meant to house a family that qualified under FHA loan rules. These properties can be single-unit homes or have up to four living units. While it’s true that not all lenders approve loans for all the possible types of housing available under the FHA program (some lenders choose not to loan money for mobile homes or new construction homes, for example) there are some general guidelines about the types of property you can purchase from a participating lender. FHA mortgages are approved for those who intend to be owner-occupiers. FHA mortgages are not available | more...