Bruce Reichstein's (brucereichstein) Blog

Realtors®! Get local FHA Loan Limits for your website w/ FREE widget.

Thu, 22 May 2025 13:22:55 -0700

In an effort to assist my network of Realtors®, I recently found this free FHA loan limits calculator tool that utilizes the most current loan limit data published by HUD. The output is clear and concise, presented in a user-friendly format, and is readily accessible online or through a mobile application. And it is developed and maintained by a reputable source which is simple and easy to download.https://fha.com/lending-limits-widgetFHA loan limits represent the maximum amount a borrower can finance with an FHA mortgage. These limits vary significantly based on geographic location, primarily reflecting median home prices within specific metropolitan statistical areas (MSAs) and counties.FHA loan limits are updated annually, and many real estate agents find that last year’s limits don’t apply in this spring’s house hunting season year to year. Offering an FHA loan limits calculator helps the borrower answer the most basic question asked when searching for a new home. “How much can you borrow?”Knowing the applicable loan limits in a given neighborhood, real estate agents can refine their property search parameters, focusing on homes within the client's affordable range. This streamlined approach saves time and effort for both the agent and the buyer, preventing the pursuit of properties that are ultimately unattainable with FHA financing. Some house hunters don’t want to speak in person or on the phone with an agent until they have a real sense of what they are looking for and what they can afford to borrow. An FHA loan limits calculator placed on the agent’s official site helps a borrower do that.Demonstrating expertise in FHA loan limits builds client confidence and fosters a strong working relationship. Agents can alleviate client anxiety and facilitate a smoother transaction by proactively addressing potential financing challenges.Learn more about FHA loan calculators at https://www.fha.com/lending-limits-widget

Homebuyers are Flocking to the FHA Construction Loan Program

Mon, 27 Feb 2023 22:59:13 -0800

We appreciate the editor of Realty Times posting this on February 17th, 2023. A growing number of people looking to purchase a home have come to the realization that existing inventory of houses currently on the market are in short supply. The discussion then turns to the possibility of having a brand-new custom home built from the ground up. Many believe they need large down payments to do so and are not aware that there is an FHA construction to permanent loan (3.5% down payment), which is offered by a small number of FHA approved lenders around the country. This loan is referred to as an FHA One-Time Close Construction Loan. FHA Construction Loan Limits Just Got Higher in 2023The FHA loan limits change annually based on a number of factors in the housing market. In 2023, the limits for all FHA forward mortgages (which includes FHA Single Close Construction Loans) increased and the floor and ceiling numbers were adjusted for single-unit properties as well as multi-unit purchases. This increase will allow more FHA borrowers to qualify for higher loan amounts to keep up with the increase in costs for both existing homes as well as building a new home.If you want an FHA Construction Loan in 2023, the floor is $472,030 in America’s low-cost housing markets. The ceiling is $1,089,300 for high-cost areas. The FHA loan limit floor is 65% of the national conforming loan limit of $726,200 for a single-unit property.Multi-unit loan limits are as follows: Two-unit: $604,400, Three-unit: $730,525, Four-unit: $907,900. You will find that loan approval from mortgage originators of multi-units is usually nonexistent and limited to single-unit, owner occupied properties with all borrowers needing a minimum middle credit score of 620. For high-cost areas, FHA mortgage limits are established at 150% of the national conforming loan limit in 2023. One-unit: $1,089,300, Two-unit: $1,394,775, Three-unit: $1,685,850 and Four-unit: $2,095,200. FHA One-Time Close Construction Loans feature the same general requirements as other FHA mortgages, including a low 3.5% down payment, no penalty for early payoff of the mortgage, and the ability to refinance later with an FHA Streamline Refinance loan that can result in a lower rate, a lower payment, or other tangible benefits to the borrower. Another government agency, the Department of Veterans Affairs, has a True $0 down payment VA construction to permanent loan. This loan is referred to as a VA One-Time Close Construction Loan and unlike its FHA counterpart, has no maximum lending limits. However, eligible Veterans must have an acceptable debt-to-income ratio which refers to the percentage of gross monthly income that goes towards debts and the cost of the mortgage on the to be constructed home. While the VA Guidelines are clear, lenders can impose “Overlays” which are additional requirements which are determined by each VA lender. The $0 Down VA construction loan limit maximum range varies by lender anywhere from $750,000 to $1,500,000, with all borrowers needing a minimum middle credit score of 620. No Payments During The Construction PhaseThe FHA and VA Construction Loans were designed for ease of use and not to be constraining on the borrowers. The guidelines will not allow the borrower to pay any interest costs during the construction phase of the loan. This interest is factored into the builder contract and paid for by the builder. That translates into the consumer paying no interest during the construction period with their first contractual payment starting the 1st of the month following a full calendar month after their construction is complete. This is a real advantage because the FHA or VA backed loan is structured so the borrower does not have to worry about making payments on their existing mortgage or lease as well as pay for the interest loan during the construction phase of the loan. There is No Requalification of the FHA or VA borrower when the construction is completed. Upon initial approval of the construction loan commitment, the FHA / VA borrower receives underwriting approval on their credit as well as income & employment, bank statements and other qualifying items. Once the loan is subsequently closed and the construction is fully completed by the builder, both the FHA and VA lender does not require any requalifying items from the borrower. They simply sign additional documents and / or loan modification agreements and no second closing is needed. That is significant because the borrower does not have to pay for any fees which would be charged on a second closing. Also, there will not be another credit pull and no employment or credit underwriting reverifications are needed because they are not required. Prudent lenders qualify the borrowers at a slightly higher interest rate at closing in addition to securing an extended lock for the period needed for construction. When the construction is completed, the lender requires a note modification which allows the borrower to get an interest rate at the same or lower rate at which they were originally approved. The program guidelines state that the final note rate cannot exceed the interest rate at the time of qualification. In the rare instance where that may occur, the lender would require new verifications for credit underwriting. “Demand for the FHA / VA One-Time Close Construction to Permanent Loan has risen due to higher demand for custom home construction. These programs are especially advantageous to both eligible Veterans and FHA borrowers because they only have one closing and avoid having to requalify for permanent financing after initially qualifying for the construction loan at the beginning” says Stuart Blend, Regional Sales Manager for Planet Home Lending, LLC, the correspondent division for Planet Financial Group, LLC. “These government sponsored programs saves borrowers time and money. Very few lenders around the Country know about this program and Planet Home Lending is extremely proud to offer our One-Time Close Construction products to our correspondent lenders as an avenue that includes our Veterans, allowing them to finance a new construction utilizing their hard-earned VA loan eligibility. There is no requalification of the borrower or recertification of the property value upon completion of the home. Mortgage payments do not begin until construction is complete.”Finding an experienced mortgage lender for this type of FHA and VA construction loan financing is not an easy task. Most FHA and VA lenders concentrate on regular FHA / VA home purchases, cash-out refinances and streamline refinances. Only a select few companies around the nation employ loan officers who fully understand how to put these deals together and provide quality service throughout the process. Our firm has done extensive research on the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in all 50 states and each company has supplied us with their product guidelines. Due to the difficulty in finding FHA and VA approved lenders who originate these low down payment government backed construction programs, we launched an educational website located at www.OneTimeClose.com. The site provides detailed product information for FHA / VA One-Time Close loans and complimentary connects consumers to (1) qualified One-Time Close lender licensed in their state. If a consumer is serious about purchasing a lot, finding a local builder and has the passion in moving forward with the various steps necessary to get this type of loan, then the least we can do is point them in the right direction. The ability to build a brand-new house in 2023 with higher lending limits and little or no down payment is of great benefit to potential consumers wanting to do so. Bruce Reichstein is the CEO of Warehouseline.com, a mortgage warehouse lender specializing in funding Government backed FHA & VA One-Time Close Construction to Permanent loans. Coming from a background of 30+ years in the mortgage banking industry including running a Nationwide VA Mortgage Origination company as well as being a former FDIC Bank Chairman for 12 years, Reichstein has concentrated his expertise and championed both the FHA and VA One-Time Construction Close programs for eligible borrowers Nationwide.

Texas Residents Guide To FHA / VA Construction One-Time Close Loans

Wed, 10 Aug 2022 11:51:29 -0700

The FHA and VA One-Time Close loans are construction-to-permanent mortgages, both of which are important options to consider if starting with a brand-new home is the direction you are heading. The One-Time Close program allows qualified borrowers in Texas to use a single closing to finance both the construction of the house and the permanent financing. The cost of the land can also be financed if you do not already own it. But if you do, lot equity can be rolled in. Even if you have a lien against the lot, it will be paid off and added to the new note. Zillow® periodically tracks housing trends and has shown residential growth in many areas in the state that should continue into the near future. The fastest growing Texas cities include Austin, Cedar Park, Conroe, Denton, Frisco, Ft. Worth, Georgetown, Houston and Leander. Many people in these cities are choosing to build their own homes rather than shopping around when there is not much to choose from.What Does it Take to Qualify? Down payments for eligible veterans are not required. $0 down payment loans up to $1,500,000 may be available. Down payments for FHA borrowers are as low as 3.5%. Lending limits for most Texas counties will max out at $420,680, but some go as high as $483,000. You will need to verify two years of consistent employment. A "middle score" from the 3 credit bureaus of 620 or better is needed. The debt-to-income ratio measures your housing and long-term debt against your income. It should not exceed 41% - 43% and varies from one government agency to another. Acceptable Property TypesYou can finance your stick-built, modular, or double-wide manufactured housing with a One-Time Close loan in any of the 254 counties in Texas. Keep in mind that this construction lending program can only be used for single family homes, but not for duplexes, triplexes, or fourplexes. Investor properties are not allowed, and you cannot function as your own builder.A key advantage of the One-Time Close loan program is that borrowers will only experience one mortgage application, one mortgage approval, and a single closing date. Compare that with more traditional products that feature two of each along with a more complicated process. When construction of your home is complete there will not be a new borrower requalification or a recertification of the property value. And until that point, debt payments will not begin.If you are looking for a home that fits your family, lifestyle, and future needs, building might be a better plan than buying. Do yourself a favor and consider this option before you make one of the most important decisions in your life.Want More Information About One-Time Close Loans?We have done extensive research on the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.Please note that investor guidelines for the FHA and VA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.Contact Us: Send Us Your Request – Spam SafePlease send your email request to info@onetimeclose.com which authorizes OneTimeClose.com to share your personal information with one mortgage lender licensed in your area to contact you. 1. Send your first and last name, e-mail address, and contact telephone number.2. Tell us the city and state of the proposed property.3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,000,000 and review higher loan amounts on a case-by-case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.

Client Wants to Build a Home on My Listed Lot?

Wed, 25 May 2022 12:14:28 -0700

Hello Bruce, I am a Realtor® here in Houston needing assistance for my Client who is looking to build a home on a lot I have listed. He is a Veteran and would like to be informed of his options on whether there is some sort of Construction Loan or a One-Time Close Loan to convert into a VA mortgage loan or any other available programs he may be able to utilize. If someone could contact me to advise us on which option would best fit his situation, that would be great.The answer to this question is Yes, there is a true $0 Down VA one-time close construction to permanent close program available to eligible veterans. https://www.fha.com/fha_article?id=1339 and https://www.onetimeclose.com/va-loan-one-time-close . Want More Information About One-Time Close Loans for your Clients?One-Time Close Loans are available for FHA, VA and USDA Mortgages. These loans also go by the following names: 1 X Close, Single-Close Loan or OTC Loan. This type of loan allows for you to finance the purchase of the land along with the construction of the home. You can also use land that you own free and clear or has an existing mortgage.We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted to one licensed construction lender in your area, please send responses to the questions below. All information is treated confidentially.OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders in an effort to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). You CANNOT act as your own general contractor (Builder) / not available in all States.In addition, this is a partial list of the following homes/building styles that are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin or Bamboo Homes, Shipping Container Homes, Dome Homes, Bermed Earth-Sheltered Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Tiny Homes, Carriage Houses, Accessory Dwelling Units and A-Framed Homes.Your email to info@onetimeclose.com authorizes Onetimeclose.com to share your personal information with a mortgage construction lender licensed in your area to contact you.Send your first and last name, e-mail address, and contact telephone number.Tell us the city and state of the proposed property.Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veteran’s, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,000,000 and review higher loan amounts on a case by case basis. If not an eligible veteran, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.

Build a Home on Your Own Lot FHA Construction Loans for Building Your Dream Home

Fri, 01 Apr 2022 12:30:23 -0700

If you are one of the many potential homeowners building your new home from scratch, you might be considering a Construction to Permanent Loan, also known as the One-Time Close loan, which allows you to finance the lot purchase, construction, and permanent mortgage with a single loan and closing. This type of loan enables you to construct your home on the land of your choosing, or on land you own outright.The LandIf you already own a plot of land on which you intend to build a home, you are a step ahead in the process. Your land equity will cover the down payment requirement (3.5% minimum for FHA loans). You might need to purchase the lot; in which case it is important to think long term. Whether you own the lot or you are looking for the best one, it is in your benefit to consult your contractor. There are many factors that go into selecting land to build on that an experienced builder knows to look for. You may think the land is perfect for the two-story house you envision, but a seasoned builder can help you determine whether the lot is suitable to build on at all.You may want to use the assistance of a licensed real estate agent in your area. They can locate lots for sale and take you to the property for viewing. If you choose to go this route, you will need to let the agent know that you plan on utilizing the One-Time Construction loan program in order to finance both the land and the construction.Finding a BuilderThe most important step in building a home on your own lot is selecting the contractor. A licensed general contractor has a wealth of knowledge and is going to be your best resource in selecting the land to build on, giving you floorplan options, and guiding you in making the best decisions. Involving your builder in the decision-making process sooner rather than later is bound to save you time and money, as well as avoid frustration in the process.When searching for a contractor, the best move is to be upfront about your needs. Be clear that you will be financing with a One-Time Close Loan. Look for builders who have experience with build-on-your-lot projects and are used to working with a buyer’s needs and budgets. Seasoned contractors also have relationships with suppliers and can get you the best pricing on materials for construction.It is often the case that borrowers who have construction skills want to build their own home. While the FHA has no restrictions on a borrower working as a contractor on their own home, it ultimately comes down to your lender’s discretion. The fact is that lenders are never onboard with taking on that risk, and so the answer is that they will not allow it to happen under any circumstances.What to Know When Building on Your Own LotAs you come up with the plans for your new home, you and your contractor need to be up to date on any and all building restrictions. You will need to determine geographical constraints, such as the distance the structure must be from a property line, local zoning codes or ordinances. This information can be found through public records at zoning offices or the city hall.Keep in mind that you and your builder need to follow the One-Time Close process and requirements with your lender as well. You will need to supply the architectural plans, a list of building materials, and work on getting an appraisal report. Lenders also require a Construction Contract, that outlines the project, the cost of building, and the timeframe of completion.There are many factors to consider when deciding to build on your own lot, and you may be daunted by the process. To help you with your first step, FHA.com can put you in touch with a well-versed licensed lender in your area to get pre-qualified for this type of loan. FHA.com has also compiled a list of Builders Associations across the U.S. These organizations serve as a resource for homebuyers and can assist you in hiring the best contractor to make your dream home a reality!Want More Information About One-Time Close Loans?One-Time Close Loans are available for FHA, VA and USDA Mortgages. These loans also go by the following names: 1 X Close, Single-Close Loan or OTC Loan. This type of loan allows for you to finance the purchase of the land along with the construction of the home. You can also use land that you own free and clear or has an existing mortgage.We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted to one licensed construction lender in your area, please send responses to the questions below. All information is treated confidentially.OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders in an effort to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). You CANNOT act as your own general contractor (Builder) / not available in all States.In addition, this is a partial list of the following homes/building styles that are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin or Bamboo Homes, Shipping Container Homes, Dome Homes, Bermed Earth-Sheltered Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Tiny Homes, Carriage Houses, Accessory Dwelling Units and A-Framed Homes.Your email to info@onetimeclose.com authorizes Onetimeclose.com to share your personal information with a mortgage construction lender licensed in your area to contact you.Send your first and last name, e-mail address, and contact telephone number.Tell us the city and state of the proposed property.Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veteran’s, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,000,000 and review higher loan amounts on a case by case basis. If not an eligible veteran, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.

Eligible Veterans Can Get $0 Down Construction Loans

Wed, 26 May 2021 23:26:38 -0700

https://www.themortgagenote.org/guest-voices-veterans-eligible-for-va-construction-loans/

Game Changing Reasons Why the VA Construction Loan Program is Thriving

Wed, 07 Apr 2021 00:05:23 -0700

Demand for custom built homes is on the rise and many Veterans who are in the market to build a new home are finding out about the VA guaranteed Construction loan program that has been around for years. If you are an eligible Veteran and qualify for a $0 Down VA Home Loan, then you qualify for a $0 Down VA construction loan as well! Not only can these Veteran borrowers select and purchase their desired lot / land, but they can also have a say in the design plans with a home builder of their choice for stick built, modular or manufactured homes. And they will be able to finance both the lot and the entire construction portion of the loan with this $0 down, VA One-Time Close Construction Loan. Let us look at why utilizing the VA Construction loan is on the rise. VA Construction Loans Have No Maximum Lending LimitsEffective January 1st, 2020, the Department of Veteran’s Affairs eliminated the cap on the maximum lending limits. This means that fully eligible Veterans are not constrained when it comes to maximum loan limits available in the county of the proposed property. This is not the case with the FHA, Fannie Mae, or Freddie Mac conventional loans where the construction loan programs are capped by the county limits for each program. For lenders offering Jumbo loans, loan amounts greater than the maximum limits, they require minimum down payments ranging from 5% on upwards depending on their company guidelines. While the VA rules are clear, lenders can impose additional guidelines which in the industry is known as “Overlays” and each lender who offers this VA Construction Loan program have imposed a maximum loan amount for $0 down VA construction loan that ranges from $750,000 on up to $1,500,000. The VA lender’s underwriter will still need to approve the borrower for a VA construction loan that they will be able to afford and still qualify financially. The highest debt-to-income ratio (DTI) acceptable to qualify for a VA mortgage is 41%. Simply put, the debt ratio compares the total monthly debt payments and divides it by the total pre- tax monthly income. The percentage that results is the debt-to income ratio. In the event the DTI ratio exceeds 41%, the VA allows the underwriter to use a Residual Income guide calculation that can be used with other compensating factors for approval. Residual income is the amount of net income remaining (after deduction of debts and obligations and monthly housing expenses) to cover family living expenses such as food, health care, clothing, and gas. Strong credit history, higher income levels, and long-term employment are a few of several compensating factors used for loan approval. No Payments During The Construction PhaseThe VA Construction Loan was designed for ease of use and not to be constraining on the Veteran. The guidelines will not allow the Veteran to pay any interest costs during the construction phase of the loan. This interest is factored into the builder contract and paid for by the builder. That translates into the Veteran paying no interest during the construction period with their first contractual payment starting the 1st of the month following a full calendar month after their construction is complete. This is a real advantage because the Veteran does not have to worry about making payments on their existing mortgage or lease as well as pay for the interest loan during the construction phase of the loan. There is No Requalification of the Veteran borrower when construction is completed. Upon initial approval of the construction loan commitment, the Veteran obtains approved after having their credit checked and meeting the minimum credit scores required by the VA Approved originating lender. In addition, verification of income & employment, bank statements and other qualifying items were validated as well. The underwriter approves the Veteran borrower only after all documentation and information has been verified. The loan is subsequently closed, and the construction draws begin. When the house is fully completed by the builder, the VA lender does not require any requalifying items from the Veteran. The borrower simply signs additional documents and / or loan modification agreements and no second closing is needed. That is significant because it means the Veteran does not have to pay for any fees which would be charged on a second closing. Also, there will not be another credit pull and no employment or credit underwriting reverifications because they are not required. Prudent lenders qualify the Veteran at a slightly higher interest rate at closing in addition to securing an extended lock for the period needed for construction. When the construction is completed, the lender requires a note modification which allows the Veteran to get an interest rate at the same or lower rate at which they were originally approved. The VA construction guidelines state that the final note rate cannot exceed the interest rate at the time of qualification. In the rare instance where that may occur, the lender would require new verifications for credit underwriting. “Demand for the VA One-Time Close Construction to Permanent Loan has risen due to high demand for custom home construction. This program is especially advantageous to eligible Veterans because they only have one closing and avoid having to requalify for permanent financing after initially qualifying for the construction loan at the beginning” says Stuart Blend, Regional Sales Manager for Planet Home Lending, LLC, the correspondent division for Planet Financial Group, LLC. “This VA program saves Veterans time and money. Very few lenders around the Country know about this program and Planet Home Lending is extremely proud to offer our One-Time Close Construction products to our correspondent lenders as an avenue that includes our Veterans, allowing them to finance a new construction utilizing their hard-earned VA loan eligibility. There is no requalification of the borrower or recertification of the property value upon completion of the home. Mortgage payments do not begin until construction is complete.”All Veterans with a Service- Related Disability Rating of 10% or higher are Exempt from paying the VA Funding Fee. This means Veterans with service-related disability ratings do not have to pay the VA for guaranteeing their newly constructed home (Veterans with no service-related disability pay 2.3% on a first time use and 3.6% on a subsequent use) and the loan receives the same 25% VA guaranty to the lender in the event of default. In addition to no funding fees, this brand-new construction can be specially adapted in the design stage to help Veterans with service- connected disabilities to live more independently and barrier free. Since the beginning of the year, I have received many requests from Veteran’s all across the country asking to be put in touch with an approved VA construction lender in their area who are well versed in the VA One-Time Close and know the program well. It is a privilege to do so. Each Veteran has their unique scenario, and it is important to be put in touch with the right VA construction lender that can accommodate their situation. As a Veteran advocate, I am committed to promoting the VA One-Time Close construction loan benefits program as often as possible. Bruce Reichstein is Chairman and CEO of Warehouseline.com, a warehouse line of credit company specializing in funding VA & FHA One-Time Close Construction to Permanent loans. Coming from a background of 30+ years in the mortgage banking industry including running a Nationwide VA Mortgage Origination company as well as being a Bank Chairman for 12 years, Reichstein has concentrated his expertise and championed the VA One-Time Construction Close program for eligible Veterans Nationwide. You can reach Reichstein at 1-800-518-0099 or at brucereichstein@warehouseline.com . Any eligible veteran wanting to learn more about the $0 Down VA Construction program or be put in touch with a participating lender can visit www.onetimeclose.com.

The $0 Down VA Construction Loan

Wed, 13 Jan 2021 23:43:23 -0800

In all my years of Mortgage Banking, I have not met or spoken with an eligible veteran who has not heard of the $0 down VA home loan program that is partially guaranteed by the United States Department of Veterans Affairs. This well-deserved home loan entitlement is bestowed upon our Military Heroes who are either active duty or honorably discharged after serving a specified number of days in the armed forces. Kudos to both the public and the military for continuously getting the word out. But what is not widely known is that this $0 down VA home loan can be used to purchase a newly constructed “to be built” home on a lot of their choice where the veteran gets to make color and design selections with a builder. As a VA One-Time Close Construction to Permanent Warehouse lender, I constantly have discussions with select industry group leaders and contacts whose clients revolve around Veterans. Veteran demand for the construction part of this program has substantially increased over the years and is expected to be the rising star for Veteran borrowers in 2021. But it is not widely known or easily available. If you would like to learn more about offering the product, I am here to “Unmuddy The Waters” and give you a road map. I hear daily from both industry professionals and veterans from all over the country wanting to know if the $0 Down VA One-Time Close Construction to Permanent Loan really exists and if so, how can they find a lender that offers this specific product? As a Veteran advocate, my goal is to educate as many people as possible about this program and help to connect the dots so that every eligible Veteran who wants to build a newly constructed home instead of buying a resale can do so. Most of the mortgage industry has gone AWOL on this product, and I am here to tell you that we “Got Your Six”. I am fortunate enough to be in the Room Where it Happens – and learned each piece of the puzzle that makes this product work. If you come across a Veteran looking for this product and really want to do a solid for them, here are a few suggestions. For Licensed Mortgage Bankers / Mortgage Brokers1) You can originate these loans as a mortgage banker and use our line to fund these by setting up with our partner administrator or2) You can broker through a National Lender who offers this product for Correspondents to sign up. Many Loan Officers "think" they want to learn this program, yet most will not make it through Boot Camp and revert to originating vanilla loans. Training LO's on OTC loans is a very labor-intensive task. But if you / your company has an established community of veterans, local builders, and excellent real estate industry contacts so that you can offer this product, I believe that with our shared guidance, you can succeed at it. Roger That! Real Estate ProfessionalsIn most cases I underwrite, the Veterans first step was to purchase a lot / land through the services of a licensed real estate agent. It can only benefit your real estate business by knowing this program exists, for the Veteran buyer may want to expedite their purchase sooner by combining the land purchase with the construction financing all in one transaction. That is the definition of the VA One-Time Close construction product. Eligible Veterans If you are an eligible veteran and cannot find a lender that offers this program, I ask that you reach out to me. We have done extensive research on the VA One-Time Close Construction loan program and have contact information for approximately 10+ CP licensed loan officers representing (5) companies for 50 state coverage. Each company has supplied me their underwriting guidelines and approved states. We provide information and connect consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options. The bottom line is that I believe the market for this product will become more popular as the eligible Veteran home buyer learns they have a $0 down option for a new construction and more mortgage professionals start offering this product.

One Time Construction Close Mortgage Loans: The Base Home Sales Price

Mon, 24 Aug 2020 01:42:33 -0700

There are home loans for borrowers–even first-time home buyers–to allow the construction of a home from the ground up. They are called One-Time Close construction loans and are available from participating FHA, VA, and USDA lenders.One Time close loans, also known as single-close construction loans, feature one loan for both the construction of the home and the purchase of that home.When you apply for a construction loan, one area you’ll soon learn about is something called the base home sales price. This is essentially the base cost of the project using the contractor’s standard designs and features–you choose the design and features and those choices generate a base price.Choosing Features, Materials, DesignHow do these choices affect cost? Consider the design itself. What is the cost of building a home with a two-car garage versus building a home with a single-car garage?Will you have a basement? If you want a fully finished basement your labor costs may be higher–these are the variables you should consider when thinking about the type of home you want to build on your own lot.There are also materials to decide upon; do you want to build your home with granite counters? Or do you want synthetic materials instead? These are choices that will affect your base price–a price that is more or less a collection of choices you will make about the home in these areas and elsewhere.How Your Project Is Charged May VaryNot all One Time Close contractors offer or charge for features in the same way; some companies have standard offerings but offer upgrades such as the option of choosing granite countertop over less expensive laminate countertops instead.You may also be offered a variety of options for one-story, two-story, split-level, or other design features.There will be adjustments to the base sales price depending on the features you prefer–understand that the more upgrades you have, the higher your base costs will be. And there are some expenses that may not make it into that calculation that you may need to contend with.Unexpected CostsThe base home sales price will not include unexpected costs, or “site expenses” that may occur during construction. If there is trouble excavating the ground for a basement, for example, there may be delays resulting in higher costs that could not be anticipated. These site costs are not included in the base home sales price.When breaking down the expenses for an OTC mortgage, the base home sales price is listed along with any seller-paid costs, the interest expenses over the construction period, and soft costs associated with construction. But the unexpected costs (if any, where applicable) cannot be anticipated ahead of time.For One-Time Close mortgages, all of this might make the entire proposition sound quite expensive, especially up front where the down payment is concerned. But even for a One-Time Close construction mortgage offered to a first-time home buyer, the down payment requirements are the same for the FHA OTC loan as for FHA purchase loans–3.5% is the minimum down payment.You can see that makes the OTC loan (especially the FHA version) quite attractive for qualifying borrowers. Remember, FHA mortgages are open to all who financially qualify–FHA loans do not have income caps or require you to be in financial need.Want More Information About One-Time Close Loans?One-Time Close Loans are available for FHA, VA and USDA Mortgages. These loans also go by the following names: 1 X Close, Single-Close Loan or OTC Loan.We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.OneTimeClose.com provides information and connects consumers to qualified VA Construction Loan One-Time Close lenders as well as FHA Construction Loan One-Time Close Lenders in an effort to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.Your email to info@onetimeclose.com authorizes OneTimeClose.com to share your personal information with a mortgage lender licensed in your area to contact you.1. Send your first and last name, e-mail address, and contact telephone number.2. Tell us the city and state of the proposed property.3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good – (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veteran’s, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $750,000 and review higher loan amounts on a case by case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limits for your county.

First-Time Home Buyers: Build Your New Home With A One-Time Close Construction Loan

Tue, 30 Jun 2020 00:26:32 -0700

Buying a home can be challenging for some first-time borrowers. Many newcomers to the mortgage market don’t know all their options open and in that situation it is easy to make choices that are less than fully-informed.One-Time Close construction loans are open to any financially qualified applicant and that includes FHA borrowers who have never purchased a home before but have good FICO scores and repayment history that has no late or missed payments in the last 12 months or better.One-Time Close loans are offered as FHA, VA, and even USDA mortgages. The FHA version is NOT need-based and features no income caps, unlike the USDA version.VA construction loans are intended only for qualifying military members, veterans, and certain surviving spouses of military members.For the average borrower who needs a low down payment requirement and the flexibility of a government-backed mortgage, the FHA One-Time Close construction loan is an option worth exploring.FHA One-Time Close loans (FHA OTC) carry the same FHA minimum requirements as any other type of home loan for purchase.The participating FHA lender will tell you that these construction loans offer the same basic down payment requirements (3.5% minimum for those with qualifying FICO scores), and the same rules for mortgage insurance, appraisals, and interest rates also apply. The good news about FHA construction loans? First time buyers do not have to come up with a bigger down payment just because they have never purchased a home before.However, in all cases borrowers who do not qualify for the most competitive rates and terms (with FICO scores and other financial qualifications) may be required to make a higher down payment on that basis.Whether your lender allows you to apply for a construction loan in such cases may be a factor–ask about the credit requirements for a construction loan compared to buying an existing home.You should definitely give yourself more time to prepare your credit and your finances ahead of a construction loan application. Why?Because not all housing markets operate the same–some states have crowded, busy markets and permits for construction and other requirements may take much longer.More time to save can also be helpful–FHA construction loans require more investment than buying an existing construction property because you’ll need a floor plan, laborers to complete the home, inspections must be paid for, permits, etc.The extra time you take to save up for these costs and others will be well worth the effort when your new home is complete.Learn More About FHA, VA and USDA One-Time Construction Close to Permanent / Single-Close Construction LoansOne-Time Close Loans are available with VA, FHA and USDA Mortgages. We have relationships with several large Mortgage Banking firms who specialize in these loans which also go by the following names: 1 X Close, Single-Close Loan or OTC Loan.Our extensive research on these programs and their guidelines allow us to educate potential home buyers who want to explore purchasing a newly constructed home versus purchasing a resale home while utilizing the same down payments for each product type.We are constantly updated on these programs and have extensive knowledge on VA (Department of Veterans Affairs), FHA (Federal Housing Administration) and USDA (United States Department of Agriculture) One-Time Close Construction programs.We speak directly to the licensed lenders that originate these residential loan types in most states. They are qualified mortgage loan officers who work for lenders that know the product well. Each company has supplied us with the guidelines for their product.If you are interested in being contacted by one licensed lender in your area, please respond to the below questions to save time. All information is treated confidentially.Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multifamily units (no duplexes, triplexes or fourplexes). Home types include: Site-Built, Modular or Manufactured Homes.In addition, the following are “NOT” allowed under these programs:Kit Homes – Steel Framing Kits, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar or Wind Powered Homes.Your response to help@onetimeclose.com authorizes us to share your personal information with a licensed mortgage lender that is familiar with your area to contact you. Send your first and last name, e-mail address, and good contact number. Tell us the city and state of the proposed property. Tell us your credit score and/or the Co-borrower’s credit score, if known. 620 is the minimum qualifying credit score for this product. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, the down payment is $0 up to the maximum amount that the debt ratio will allow – there are no maximum loan amounts as per the Department of VA. Most lenders will go up to $750,000. If not, the FHA down payment is 3.5% up to the maximum FHA Lending Limits for your county and the USDA down payment is $0 and based on maximum income.

Planning Your One-Time Close Construction Loan / Single Close

Mon, 29 Jun 2020 00:19:42 -0700

Some FHA loan applicants do not realize they have the ability to apply for a One-Time Close mortgage that lets the borrower build a home on their own lot instead of buying an existing construction home. The FHA One-Time Close (OTC) construction loan, like its’ VA construction loan counterpart, is a loan backed by the government that allows the borrower to apply for a single mortgage loan to cover both the costs of construction of a home from the ground up and the purchase of the home. This is offered as an alternative to construction loans that require two loan applications (one for construction, one for the completed home) and two closing dates. OTC Loans Have The Same Down Payment Requirements As Other FHA Loans The One-Time Close loan avoids this in favor of one loan, one closing date, and the FHA version has the same down payment requirements as any other FHA loan including mobile home and condo unit loans. That minimum is 3.5%, though borrowers who don't meet certain FICO score requirements (FHA and lender standards apply) may be required to make a higher down payment (the same as with other FHA loans). How do you prepare for an FHA One-Time Close loan? The process is similar to any other mortgage, but with some extra consideration along the way for the time it may take to secure architectural plans, building permits, and contractors. Skip Getting New Credit Cards, Work On Your Existing Credit Accounts Before you apply for a One-Time Close construction loan, you'll need time to save and plan your loan. You will also need time to start working on your credit using credit monitoring, reducing your card balances, and avoiding new debt. Your credit scores and your credit history both play a very important role in loan approval. Don’t come to the application process with new credit accounts opened in the last year. And don't apply for your loan until you have 12 months or more of on-time payments for all financial obligations for better results with home loan application approval. Get Ready For Your Down Payment Early Saving early helps in many ways. The bigger down payment you make on your dream home, the less the loan will cost over time. That said, some borrowers need to save on up-front costs and can only put the minimum amount down. For some types of home loan, a borrower may consider getting the help of a local down payment assistance program but for construction loans some lenders may not permit down payment assistance--ask before you plan on money coming from other sources than your own savings. You will be glad you did. You may also have access to state or local tax breaks or other incentives as a first-time home buyer or a borrower who has not owned property in a while. Investigate your local options in the planning stages to see where you can save money or get financial assistance (where applicable). Learn How Much Home Loan You Can Realistically Afford Try using an online mortgage calculator for an estimate of your monthly payments (including property taxes, mortgage insurance premiums, and other expenses that may affect your mortgage amount.) The online calculator is a helpful budgeting tool, but don't expect accurate-to-the-dollar amounts. This is an estimate for planning purposes only. Learn More About FHA, VA and USDA One-Time Construction Close to Permanent / Single-Close Construction Loans One-Time Close Loans are available with VA, FHA and USDA Mortgages. We have relationships with several large Mortgage Banking firms who specialize in these loans which also go by the following names: 1 X Close, Single-Close Loan or OTC Loan. Our extensive research on these programs and their guidelines allow us to educate potential home buyers who want to explore purchasing a newly constructed home versus purchasing a resale home while utilizing the same down payments for each product type. We are constantly updated on these programs and have extensive knowledge on VA (Department of Veterans Affairs), FHA (Federal Housing Administration) and USDA (United States Department of Agriculture) One-Time Close Construction programs. We speak directly to the licensed lenders that originate these residential loan types in most states. They are qualified mortgage loan officers who work for lenders that know the product well. Each company has supplied us the guidelines for their product. If you are interested in being contacted by one licensed lender in your area, please respond to the below questions to save time. All information is treated confidentially. Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multifamily units (no duplexes, triplexes or fourplexes). Home types include: Site-Built, Modular or Manufactured Homes. In addition, the following are “NOT” allowed under these programs:Kit Homes – Steel Framing Kits, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar or Wind Powered Homes. Your response to help@onetimeclose.com authorizes us to share your personal information with a licensed mortgage lender that is familiar with your area to contact you. Send your first and last name, e-mail address, and good contact number. Tell us the city and state of the proposed property. Tell us your credit score and/or the Co-borrower’s credit score, if known. 620 is the minimum qualifying credit score for this product. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, the down payment is $0 up to the maximum amount that the debt ratio will allow – there are no maximum loan amounts as per the Department of VA. Most lenders will go up to $750,000. If not, the FHA down payment is 3.5% up to the maximum FHA Lending Limits for your county and the USDA down payment is $0 and based on maximum income.

VA One-Time Close Construction Loan Options for Veterans Expanded

Thu, 19 Apr 2018 01:08:57 -0700

Some house hunters get fed up with looking for just the right home, while others start out their home loan journey knowing in advance they want a house built for them. What options to these borrowers have?There is an FHA home loan known as the FHA One-Time Close construction loan that lets borrowers apply for a single loan that covers both construction costs and the mortgage itself.The FHA version of this type of construction loan requires the borrower and lender to work together to establish a plan for the project including estimated completion times, interest rates, budgets, and more.Some borrowers aren’t interested in FHA home loans since they have other options; do qualifying military veterans have a VA loan version of the FHA One Time Close Mortgage? The short answer is yes.The VA One-Time Close Construction Loan ProgramVA construction loans have, on paper, long been available to eligible borrowers who meet VA loan time-in-service minimum requirements. But the instructions for participating lenders wasn’t as extensive and seemed to discourage lenders and borrowers from taking advantage of this option. However, in 2018 updates to the VA lenders guide offers more detailed guidance.VA Construction Loan StepsOnce the lender agrees to the loan, the VA One-Time Close loan is closed, “prior to the start of construction with proceeds disbursed to cover the cost to build, cost of the land, or balance owed on the land, with the remaining balance in escrow” according to the VA official site.Loan money disbursed during the construction phase of the project for labor and materials is viewed as a “Loan in Process” or as a “draw” account. The lender makes payments or “draws” the borrower’s permission (in writing!) before a new draw or payout can be made from the escrow account.What Kind Of Home Can I Build With A VA Construction Loan?VA guidelines may permit more types of dwellings than a single lender is willing to offer; you may find participating lenders unwilling to approve VA construction loans for three or four unit homes, manufactured homes, etc.The lender may require that your property be “stick-built” only rather than a modular or manufactured home. (Stick-built homes are those constructed from the ground up in the traditional manner, rather than being assembled on-site like a modular home.)Some lenders may permit a manufactured home to be built with a VA construction loan, but may restrict these transactions to certain types of mobile home (such as a double-wide). You will need to discuss lender standards as they related to your needs for the loan. Note that it is possible under the VA loan program to buy manufactured homes, but lender standards also apply in this area, too and you may not have every single home loan option technically available. VA construction loans are not the only types of loan product affected by lender standards.Who Can I Hire To Build My Home With A VA One Time Close Construction Loan?As mentioned above, lender standards apply to VA loans, but overall the Department of Veterans Affairs the VA construction loan borrower to use a licensed general contractor that is on a VA approved list. You may find that some lenders will not permit the borrower to do her own work on the home, or you may find that other restrictions or additional considerations apply.One-Time Close Loans are available for FHA, VA, and USDA Mortgages. These loans also go by the following names: 1 X Close, Single-Close Loan or OTC Loan. Contact Us for More InformationWe have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders in an effort to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.Your email to info@onetimeclose.com authorizes OneTimeClose.com to share your personal information with a mortgage lender licensed in your area to contact you. Send your first and last name, e-mail address, and contact telephone number. Tell us the city and state of the proposed property. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor - (Below 620). 620 is the minimum qualifying credit score for this product. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $750,000 and review higher loan amounts on a case by case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.

FHA Home Loans For Houses, Condos, And Townhouses Part One

Wed, 04 Apr 2018 00:23:28 -0700

What should you know about FHA home loans for houses, condos, and townhouses? There are plenty of issues to keep in mind including down payment requirements, appraisal rules, and special options.FHA Loan Rules For HousesThe FHA loan handbook, HUD 4000.1, addresses home loans for new houses depending on their classification as existing construction, new construction, or proposed/under construction.Borrowers who want to buy an existing construction home will be looking at property that has had at least one owner. Existing construction FHA loans require an appraisal and the borrower is required to make a minimum down payment of 3.5% of the adjusted value of the property unless the transaction requires more due to credit issues, identity-of-interest problems, etc.New construction loans (such as the FHA One Time Close construction loans) are possible with an FHA mortgage.One-Time Close Loans are available for FHA, VA, and USDA Mortgages. These loans also also by the following names: 1 X Close, Single-Close Loan or OTC Loan. Contact Us for More InformationWe have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders in an effort to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.Your email to info@onetimeclose.com authorizes OneTimeClose.com to share your personal information with a mortgage lender licensed in your area to contact you. Send your first and last name, e-mail address, and contact telephone number. Tell us the city and state of the proposed property. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor - (Below 620). 620 is the minimum qualifying credit score for this product. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $750,000 and review higher loan amounts on a case by case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county. These loans require higher FICO scores than mortgage loans for existing construction, but the results can be worth any extra time it takes to budget, save, and prepare for the loan application. An FHA construction home loan is technically available to either build a home from the ground up (“stick-built”) or for the assembly on-site of a manufactured or modular home.However, you may find that FHA construction loans for non stick-built properties harder to find. Consider that in your search for a participating lender.Buying a home with an FHA mortgage always means a new credit check, appraisal, and any required follow-up inspections as a result of that appraisal. Expect to put down a minimum of 3.5% of the adjusted value of the home unless you are applying specifically for an FHA 203(h) rehab loan in a federally declared disaster area; that is the only new purchase FHA mortgage that does not have a down payment requirement of 3.5%.FHA Loan Rules For Townhouses and CondosFHA loan rules for condo units (and yes, properties that appear to be townhouses but are organized under a condo project-style set of agreements and covenants) differ from new purchase loans for a few important reasons. One of those reasons involves the group ownership nature of condo projects.Borrowers aren’t buying the entire building when applying for an FHA condo loan, they are buying a unit within the project. FHA loan rules for condo loans are designed to protect the borrower in several ways including a prohibition of restrictive bylaws in the homeowner/condoowners agreements the buyer must sign.If the buyer cannot freely sell her property at any time under the condo owner’s association agreements, the property cannot be approved for an FHA mortgage loan. Do condo projects actually feature such requirements? Some still do. We’ll review that aspect of the home buying issue in part two.

What Is The FHA One-Time Close Construction Program? Part Two

Sun, 19 Nov 2017 23:44:06 -0800

What is the FHA One-Time Close Program? In our previous blog post, we discussed the basics of this FHA construction loan program-what it means to the borrower seeking an FHA new construction loan and how having a single loan (instead of two loans as with typical construction loan situations) can be an advantage for the borrower.FHA One-Time Close mortgages are for those who want an FHA construction loan for a property that has yet to be built. They can be more complex than typical new purchase FHA loans, but for those who need a construction loan, One-Time Close has definite advantages.They include a single closing date, and an early mortgage loan interest rate lock that can potentially safeguard the borrower against rising mortgage rates should they occur.Who is eligible for an FHA One-Time Close loan?One-Time Close mortgages generally require the borrower to have a minimum FICO credit score at or near 620. Borrowers with FICO scores below 660 may be required, depending on the lender and other factors, to have at least two credit scores. The lowest FICO score is used for loan approval decisions.Depending on the lender, there may be guidelines about what type of property may be built using an FHA One-Time Close mortgage loan. You may find that stick-built homes are given preference with this type of FHA construction loan. A stick-built home, also known as a site-built home, is a typical construction project, with the home built on site as opposed to having a modular home which is shipped to the home’s location and assembled in sections.Depending on the lender, you may find that modular or manufactured homes are not eligible for FHA One-Time Close loans.For the construction phase of the home purchased with a One-Time Close mortgage, an approved builder must be used. Potential FHA borrowers with questions about this aspect of the loan should have a discussion with the lender, as requirements and procedures for approved builders may vary from place to place.Appraisal issues for these types of home loan transactions are different that purchase existing construction homes. Appraisals and other compliance requirements may be conducted “as completed”, so borrowers will need to discuss the timing of those activities with the lender.Borrowers are still required to pay for appraisal fees, compliance inspection fees, and related services as part of the FHA loan process with One-Time Close loans. Escrow may be required, and you’ll need to discuss those arrangements with your participating lender.Our site has done some extensive research on this product and have compiled a list of licensed FHA One-Time Close lenders for most states. These are qualified mortgage loan officers who work for lenders that know the product well. Each company has supplied me the guidelines for their product. If you are interested in being contacted by “one” licensed lender in your area, please respond to the below questions to save time. All information is treated confidentially. Responding to onetimeclose@fhanewsblog.com authorizes fhanewsblog.com to share your personal information with a licensed mortgage lender in your area to contact you. Please note that the FHA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multifamily units (no duplexes, triplexes or fourplexes). Send your first and last name, e-mail address, and contact telephone number. Tell us the city and state of the proposed property. Tell us your credit score and /or the co-borrower's credit score, (if you know it). 620 is the Minimum qualifying credit score for this product. Are you or your spouse (co-borrower) eligible Veterans? If either of you are eligible Veteran's, the down payment is $0 up to the maximum VA lending limit for your county. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county - https://www.fha.com/lending_limits

What Is The FHA One-Time Close Construction Program? Part One

Wed, 08 Nov 2017 05:43:48 -0800

What is the FHA One-Time Close program? Who is it meant for? These are questions with important answers for potential FHA borrowers who are interested in applying for an FHA mortgage to have property built for them instead of buying an existing construction property.One-Time close mortgages are construction loans that differ from standard construction loans in that there is a single closing date for the loan rather than the traditional two closing dates. The borrower saves money on a one-time close loan thanks to the single loan for construction costs, land purchase, and the typical expenses associated with a home loan.These savings work in ways you might not expect. One advantage of this type of construction loan is that the lender and borrower arrive at a mortgage loan interest rate lock commitment for the mortgage earlier than they might with the old "two loan system" for FHA construction loans. That protects a borrower from possible higher interest rates later down the line, saving money over the lifetime of the mortgage with a fixed-interest rate home loan.One-Time Close loans feature a closing date that occurs before construction begins on the home. Funds are disbursed multiple times during the course of the construction, and the construction project is monitored to insure progress. Borrowers should know that One-Time Close FHA loans require additional waiting time depending on the nature and duration of construction, inspections, etc.FHA One-Time Close mortgage loans are more complex than typical FHA loans or FHA refinance loans for a suburban home because of the nature of the mortgage.Under the old "two-loan" system for building and buying a new property, the borrower had to qualify for a loan twice. This is not the case with an FHA One-Time Close loan, where the borrower qualifies for one loan.That loan has two phases-a construction phase, and a permanent phase. The construction portion of the FHA loan allows money to be paid for the construction of the property without the lender’s intervention. During the construction phase, the borrower is not required to make any mortgage payments. Once the permanent phase of the loan begins, the borrower will begin to make her mortgage payments the same as with any typical home loan.Our site has done some extensive research on this product and have compiled a list of licensed FHA One-Time Close lenders for most states. These are qualified mortgage loan officers who work for lenders that know the product well. Each company has supplied me the guidelines for their product. If you are interested in being contacted by one licensed lender in your area, please respond to the below questions to save time. All information is treated confidentially. Your response to onetimeclose@fhanewsblog.com authorizes www.fhanewsblog.com to share your personal information with a licensed mortgage lender in your area to contact you. All information is treated confidentially. Send your first and last name, e-mail address, and contact telephone number. Tell us the city and state of the proposed property. Tell us your credit score and/or the Co-borrower’s credit score, if known. 620 is the Minimum qualifying credit score for this product. Are you or your spouse (Co-borrower) eligible Veterans? If either of you are eligible Veteran’s, the down payment is $0 up to the maximum VA lending limit for your county. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county- https://www.fha.com/lending_limits .

FHA Appraisal Rules: A Reader Question

Fri, 18 Nov 2016 00:09:13 -0800

A reader asks, "Does the “no exposed wiring” rule apply to an unfinished utility closet that has the furnace and water heater inside it? This is merely a smaller utility closet space that was never finished as it was never meant for any type of living area."FHA appraisal rules in HUD 4000.1 include a set of instructions for the appraisal. Those instructions include a section that specifically addresses the electrical system of the home.In general this section tells the lender and appraiser about defective conditions which must be reported, including a variety of issues such as an electrical system that is not adequate to support the entire property.Those instructions also include the following:"The Appraiser must examine the electrical system to ensure that there is no visible frayed wiring or exposed wires in the dwelling, including garage and basement areas, and report if the amperage and panel size appears inadequate for the Property. The Appraiser must operate a sample of switches, lighting fixtures, and receptacles inside the house and garage, and on the exterior walls, and report any deficiencies. The Appraiser is not required to insert any tool, probe or testing device inside the electrical panel or to dismantle any electrical device or control."Note that the appraiser is not required to be an electrician or an expert in electrical systems. The appraiser's job is not to inspect the home to insure it is free from any and all defects, nor is the FHA appraisal intended as a stamp of approval that a home is defect-free. Borrowers should always pay for a home inspection to get the most detailed look at the home.The short answer to the reader's question is that exposed wiring is, in general, not permitted. Wiring that is encased in some form of protective covering, but still "exposed" is not directly addressed by this section of HUD 4000.1, but state or local building code may have a say in whether that is permitted or not.If a condition in the home "passes" FHA minimum standards, but is not permitted by state/local code, the local jurisdiction would definitely apply. Borrowers should know that FHA requirements never override or overrule these ordinances.

Divorce and FHA Loan Applications

Sun, 13 Nov 2016 22:21:55 -0800

FICO scores, debt-to-income ratios, and credit history aren't the only things that can factor in when the lender is gathering data from your FHA mortgage loan application. Borrowers who are divorced may experience additional requests from the lender for paperwork or supporting documentation.We get questions about issues like these quite frequently. Here's one recent example from the comments section:"Legally divorced in SC for close to seven years. There was no alimony, no children, and bills were split. The underwriters for an FHA re-finance are demanding a copy of the Separate Maintenance and Property agreement filed at the time of separation, a full year and a half before the divorce. I dont have a copy of it, so I have to either buy one online or miss a days work to go to the County Courthouse in another city. What is the purpose of this?"The frustration is understandable, but in many cases the loan officer may be bound to request such information for a variety of reasons including lender standards.Since the requirements of financial institutions may vary, what is required at one lender may not be at another. But the lender IS required, regardless of the institution processing the loan, is to evaluate the borrower's debt-to-income ratio.Anything that could affect that ratio, including a monthly financial obligation to pay maintenance, child supprt, etc. will need to be verified by the lender.From HUD 4000.1: "The Mortgagee must obtain the official signed divorce decree, separation agreement, maintenance agreement, or other legal order. The Mortgagee must also obtain the Borrowers pay stubs covering no less than 28 consecutive Days to verify whether the Borrower is subject to any order of garnishment relating to the Alimony, Child Support, and Maintenance."Additionally, the laws of a borrower's state may affect the mortgage loan transaction. Do you live in a community property state? Community property laws dictate how financial obligations incurred during the legal marriage are to be divided in a divorce. This can also affect the debt-to-income ratio, so the lender will need to verify any financial obligations the borrower has as a result, where applicable.Divorce is not a barrier to an FHA mortgage. But borrowers who have legally binding agreements as to the disposition and payment of debts or other issues should expect the lender to request documentation of these agreements as part of the loan application process.

High Voltage Lines and FHA Loans

Fri, 04 Nov 2016 06:03:36 -0700

A reader asked a question recently about high voltage transmission lines and the FHA loan rules that address them in relation to the property to be purchased with an FHA mortgage."I am looking to find info regarding High Voltage Transmission Lines. I know that in 4150.2 that it clearly states that the dwelling or other improvements can not be within the “fall zone”. However I am not locating this info in more updated references. Can you help with me finding this info?"FHA loan rules were updated in HUD 4000.1, and have since replaced many older references. According to the FHA/HUD official site, "The Federal Housing Administration’s (FHA) Single Family Housing Policy Handbook 4000.1 (SF Handbook) is a consolidated, consistent, and comprehensive source of FHA Single Family Housing policy".In HUD 4000.1, on page 160, we learn the following:"The Mortgagee must confirm that any Overhead Electric Power Transmission Lines do not pass directly over any dwelling, Structure or related property improvement, including pools. The power line must be relocated for a Property to be eligible for FHA-insured financing." This section of the FHA loan rule book adds, "The residential service drop line may not pass directly over any pool, spa or water feature".And finally, this section states, "If the dwelling or related property improvements are located within the Easement area, the Mortgagee must obtain a certification from the appropriate utility company or local regulatory agency stating that the relationship between the improvements and Local Distribution Lines conforms to local standards and is safe."High voltage transmission easements, gas pipeline transmission, and other conditions may be more problematic for some properties than for others. In cases where this could be an issue for the FHA appraisal you may find FHA loan rules AND state law, local ordinances, and other requirements may all have a say.It's never safe to assume that the FHA loan rulebook has the final work on high voltage transmission lines or other aspects of the property subject to building codes, federal law, etc.Borrowers may understand what the FHA loan rules say about such issues, but knowing what building codes and possibly even state law might have to say can be a major help in determining whether or not a property might "pass" an FHA appraisal.

Commission Income and FHA Loans

Fri, 28 Oct 2016 00:08:37 -0700

A reader asks, "Can I apply for an FHA loan after just one year of commission based pay with a cosigner?"FHA loan rules require all borrowers to be obligated on the loan to financially qualify, which would include verification of both employment and income. A co-signer or co-borrower may not be able to make up for financial shortcomings of the other borrower(s) on the mortgage loan, but lender standards would apply in this area and it's best to have a conversation with a loan officer about those standards and what may be possible.FHA loan rules for commission income, found in HUD 4000.1, state the following:"Commission Income refers to income that is paid contingent upon the conducting of a business transaction or the performance of a service...The Mortgagee may use Commission Income as Effective Income if the Borrower earned the income for at least one year in the same or similar line of work and it is reasonably likely to continue."The "likely to continue" factor is key. Furthermore, FHA loan rules break down the requirements for commission income based on the percentage of the borrower's pay that comes from commission:"For Commission Income less than or equal to 25 percent of the Borrowers total earnings, the Mortgagee must use traditional or alternative employment documentation."And for commission income greater than 25 percent? FHA loan rules in HUD 4000.1 require the lender to, "obtain signed tax returns, including all applicable schedules, for the last two years. In lieu of signed tax returns from the Borrower, the Mortgagee may obtain a signed IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-T, Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, and tax transcripts directly from the IRS."To calculate a borrower's income from commission pay, the lender is required to make a specific type of calculation, depending on the length of time commission income has been earned."The Mortgagee must calculate Effective Income for commission by using the lesser of (a) the average net Commission Income earned over the previous two years, or the length of time Commission Income has been earned if less than two years; or (b) the average net Commission Income earned over the previous one year. The Mortgagee must calculate net Commission Income by subtracting the unreimbursed business expenses from the gross Commission Income."This information is found on page 192 of HUD 4000.1.

Mold Standards: An FHA Loan Question

Sun, 23 Oct 2016 07:14:16 -0700

A reader asks, "Does the EPA or the FHA have the responsibility for setting the TLVs for mold spores in the air? What if the mold count is higher outside than inside?"The FHA does not set or regulate such health issues, deferring instead to federal, state, or local authority where applicable. According to the Environmental Protection Agency's official site, we learn the following about mold as it relates to exposure in buildings (in general):"Is sampling for mold needed? In most cases, if visible mold growth is present, sampling is unnecessary. Since no EPA or other federal limits have been set for mold or mold spores, sampling cannot be used to check a building's compliance with federal mold standards. Surface sampling may be useful to determine if an area has been adequately cleaned or remediated. Sampling for mold should be conducted by professionals who have specific experience in designing mold sampling protocols, sampling methods and interpreting results."That information can be found at https://www.epa.gov/mold/mold-testing-or-sampling. A quick check of the FHA loan rules for single family home loans in HUD 4000.1 turns up two references to mold-one specifically mentioning it in the overall context of the FHA appraisal:"The Appraiser must report known environmental and safety hazards and adverse conditions that may affect the health and safety of the occupants, the Property’s ability to serve as collateral, and the structural soundness of the improvements. Environmental and safety hazards may include defective lead-based paint, mold, toxic chemicals, radioactive materials, other pollution, hazardous activities, and potential damage to the Structure from soil or other differential ground movements, subsidence, flood, and other hazards."If mold is present and detected by the FHA appraiser, it is entirely likely that the appraiser will recommend corrections/repairs to fix the issue.However, FHA appraisers are not mold experts and just because a property "passes" an FHA appraisal does not mean the property is free of mold or any other problem. Borrowers will need to pay for an optional home inspection to determine whether or not a home has defects or other issues that could affect the borrower's use of the property once the loan has closed.Borrowers who want to learn more about mold and EPA advice about it should download the EPA's guide, A Brief Guide To Mold, Moisture, And Your Home which is a downloadable .pdf file.

Residency And Occupancy: FHA Loan Rules

Sun, 16 Oct 2016 06:07:56 -0700

FHA loan rules have requirements for both U.S. residency for potential borrowers, and occupancy for approved borrowers. Did you know that HUD 4000.1 states that an FHA loan applicant does not have to be a U.S. citizen in order to apply for an FHA mortgage or refinance loan?U.S. citizenship is not required, but legal documentation showing the applicant's status will be a condition of loan approval. The FHA loan program is open to both non-permanent resident aliens and lawful permanent resident aliens. The FHA loan rules also instruct the lender, "Non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured Mortgages".While all borrowers are required to show proof of a Social Security Number, this cannot be used to prove immigration or work status, according to HUD 4000.1:"The Mortgagee must determine the residency status of the Borrower based on information provided on the mortgage application and other applicable documentation. In no case is a Social Security card sufficient to prove immigration or work status".Once a borrower has provided the proper documentation needed by the lender, and is approved for the FHA mortgage or refinance loan, there will also be the FHA occupancy requirement which must be met:"At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year". If there is only one borrower, that person must meet the FHA loan occupancy requirement personally.Borrowers who have applied for FHA 203(k) rehab loans may have different requirements (different projects may involve different completion timelines), so it's important to know how and if they apply to you.Talk to your loan officer about occupancy requirements based on your specific needs under the 203(k) rehab loan project to see what may apply with the fixes or improvements to be made with the loan.

Natural Disasters and FHA Loans

Sun, 09 Oct 2016 00:33:25 -0700

Natural disasters are a serious issue for home owners, whether they have just closed, paid off their mortgages, or are somewhere in between. When a hurricane strikes, when flood waters rise, or when other acts of nature threaten, damage or destroy homes, many aren't sure where to turn or what to do first.FHA mortgage loan options in these cases depend on a variety of factors, but there is help available to rebuild and recover. FHA mortgage options include 203(k) and 203(h) loans (including refinance loans) that can help home owners recover, but what do to in the meantime?The first thing a home owner should do is contact FEMA to see what assistance may be available on a federal level. For the most recent (at the time of this writing) issues related to Hurricane Matthew, FEMA has set up a special page at https://www.fema.gov/node/292516?utm_source=hp_promo&utm_medium=web&utm_campaign=femagov_hp.State and local agencies may also have help waiting. Home owners should contact these agencies as early as possible to see what kinds of assistance are possible.For borrowers who are currently making payments on a home that could be or has been damaged/destroyed in a natural disaster, it's crucial to make contact with both your loan officer and your insurance agent as soon as possible.It's also crucial not to be rushed into insurance settlements-the promise of fast cash in the early stages of recovery may be appealing, but without knowing the full implications of settling early, a home owner is at a disadvantage. Don't be pressured into settling-know your options, rights, and responsibilities.When it comes to your mortgage loan payments, it's never safe to assume that your home loan is not due. Your lender may be willing to work with you on payments (including late or missed payments as a result of the disaster) but making these arrangements specifically is key.For FHA borrowers, the FHA official site says, "If you can't pay your mortgage because of the disaster, your lender may be able to help you. If you are at risk of losing your home because of the disaster, your lender may stop or delay initiation of foreclosure for 90 days.""Lenders may also waive late fees for borrowers who may become delinquent on their loans as a result of the disaster. If you have a conventional mortgage, you are strongly encouraged to contact your lender for further information, and to see if you are eligible for relief."Some types of disaster relief are only available once the President declares an official disaster area. When you contact FEMA, be sure to ask about the status in this regard to see what help might be currently available or become available soon.

FHA Proposes New Condo Approval Processes

Thu, 29 Sep 2016 23:27:36 -0700

A recent press release on the FHA official site announces new proposals for FHA condo loan approval procedures. According to HUDNo.16-146, there are significant alterations to current FHA loan policy that are currently under review."In response to changing conditions in the condominium market, the Federal Housing Administration (FHA) today proposed new regulations governing the approval process for condominium developments. FHA proposes to reinstate single unit approvals in unapproved condominium developments and to require condo projects to recertify their approval status every three years rather than the current two-year requirement."Individual condo units in projects that are not currently on the FHA approved list would, under these proposed changes, have a better chance of getting single-unit loan approvals if the units meet FHA criteria including (but not limited to) the following:-The unit is not a manufactured housing condominium project or located in a two-to-four-unit project;-The condominium unit is not a manufactured home and is in a project that has at least five dwelling units;-The unit is in a project in which the amount of Single-Unit Approvals is limited to a maximum of 20 percent of the total number of units in the project, which may be reduced to as low as zero percent via subsequent notice.The ability to approve individual condo units could seriously improve the availability of such units to FHA borrowers. According to the press release, the purpose of these changes in policy (which are under review and have not been made into a final rule or codified at the time of this writing) is to be more responsive to a changing housing market.There are also some other suggested revisions that could positively affect the FHA condo loan process. "FHA currently requires that approved condominium developments have a minimum of 50 percent of the units occupied by owners."Not having enough owner-occupiers may "detract from the viability of a project" according to the press release, but requiring too many owner-occupiers can hurt a condo project's marketability. "Through this proposed rule, FHA is specifically inviting comment on this issue and is proposing to establish an allowable range between 25 and 75 percent. The range allows FHA to choose a specific percentage that is responsive to future market changes."The press release also adds some discussion about the non-residential nature of the floor space in a given condo project. "FHA currently requires that the commercial/nonresidential space within an approved condominium development not exceed 50 percent of the project's total floor area, and anticipates maintaining this as a requirement in the near term.""However, as the agency gains experience with this program, it may wish to modify this limitation and is therefore proposing to establish a range between 25 and 60 percent, which may be specified via subsequent notice, giving the agency flexibility to make any needed future adjustment within this range."According to the press release, mixed-use developments are a way to integrate housing, land-use, economic and workforce development, "as well as transportation and infrastructure development. While the agency acknowledges the benefits of mixed-use developments, in the near term, it believes that allowing greater than 50 percent commercial/nonresidential space may have a negative impact on the residential character of a condominium project."We will report on future developments related to these FHA condo loan issues as details become available from the FHA.

Well Water: FHA Loan Questions

Thu, 22 Sep 2016 23:01:33 -0700

A reader asks, "FHA use to only require that these top items need to pass. Lead (first draw), Nitrate, Nitrite, Total Nitrate/Nitrite,Total Coliforms, Fecal Coliforms or E. Coli. Is this still true? I am hearing that a full water panel is required to be done, is this now true and if so,is FHA major focus still on the top items passing? Also what is required by FHA if one of these items fails?" This question is in reference to FHA requirements for properties that are served by wells. In general, the local health authority would set the standards, so the reader would need to consult with the local authority to get the answer to the first part of this question. Health standards, procedures, and requirements can and do vary from housing market to housing market, so the local standard may vary depending on location.HUD 4000.1 states that in the absence of a local health standards, a national standard would apply:"When an Individual Water Supply System is present, the Mortgagee must ensure that the water quality meets the requirements of the health authority with jurisdiction. If there are no local (or state) water quality standards, then water quality must meet the standards set by the EPA, as presented in the National Primary Drinking Water regulations in 40 CFR §§ 141 and 142."Note that the above is in reference to an individual well water supply. Shared wells are governed by this portion of HUD 4000.1:"An inspection is required under the same circumstances as an individual well. This may be evidenced by a letter from the health authority having jurisdiction or, in the absence of local health department standards, by a certified water quality analysis demonstrating that the well water complies with the EPA’s National Interim Primary Drinking Water Regulations..."As you can see, the local health authority will have the specific details of the drinking water requirements, not the FHA.When it comes to passing or failing the inspection, we refer back to the overall FHA loan appraisal policy. If corrections can be made to an aspect of the property that fails to meet standards, it may be possible to make the required corrections and have the property declared fit for an FHA mortgage.But if corrections cannot be made, or are attempted but not up to the required standard, it's likely the property would not be approved for an FHA mortgage.

HUD Announces Fair Housing Protections For Borrowers W/Limited English

Thu, 15 Sep 2016 23:17:18 -0700

It's known as "LEP" or "limited English proficiency, and has been an issue that directly affects legally binding agreements including home loans for as long as there have been such arrangements made in the United States. But now, LEP is being addressed directly through guidance from the Department of Housing and Urban Development, as described in a recent press release on the HUD official site."The U.S. Department of Housing and Urban Development (HUD) today issued 'Limited English Proficiency' (LEP) guidance that addresses how the Fair Housing Act would apply to claims of housing discrimination brought by people because they do not speak, read, or write English proficiently. More than 25 million people in the United States do not communicate proficiently in English."The Fair Housing Act makes it illegal for, according to the press release, "both intentional housing discrimination and housing practices that have an unjustified discriminatory effect." The press release notes that house hunters and home loan applicants with limited English skills are not a "protected class" in the Fair Housing Act, but that Fair Housing laws are definitely linked with protections for those with limited English skills."Housing providers are therefore prohibited from using limited English proficiency selectively or as an excuse for intentional housing discrimination" according to HUDNo.16-135, adding that Fair Housing laws forbid landlords and property owners from using an applicant or tenant's limited English as the basis for discriminatory behavior.“Having a limited ability to speak English should never be a reason to be denied a home,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity who was quoted in the press release. He adds, “Every family that calls this nation home has the same rights when it comes to renting or buying a home, regardless of where they come from or language they speak.”What kinds of discrimination are possible-and illegal-under Fair Housing guidance from HUD?According to the FHA/HUD official site, that discrimination can include, "...applying a language-related requirement to people of certain races or nationalities; posting advertisements that contain blanket statements, such as 'all tenants must speak English;' or immediately turning away applicants who are not fluent in English. Targeting racial or national origin groups for scams related to housing also constitutes intentional discrimination"But that's not all, according to HUDNo.16-135. Violations of the Fair Housing Act also happen when, "the provider’s policies or practices have an unjustified discriminatory effect, even when the provider had not intended to discriminate.""Determining whether a practice has a discriminatory effect involves a three-step legal evaluation of the statistical evidence of a discriminatory effect; whether the housing provider’s policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest; and, if so, whether there is a less discriminatory alternative policy or practice."HUD's guidance for LEP includes an explanation of how the Fair Housing Act would apply to claims of housing discrimination brought by people because they do not speak, read, or write English proficiently. The text of the guidance is available in a downloadable .PDF available on the HUD official site. Fair Housing Act laws apply to a wide variety of housing issues including rentals and mortgage loans.