fha: FHA Home Loans For Houses, Condos, And Townhouses Part One
- 04/04/18 12:23 AM
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 Houses
The 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 … (0 comments)
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fha: What Is The FHA One-Time Close Construction Program? Part Two
- 11/19/17 11:17 PM
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 … (0 comments)
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fha: What Is The FHA One-Time Close Construction Program? Part One
- 11/08/17 05:43 AM
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 … (4 comments)
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fha: FHA Appraisal Rules: A Reader Question
- 11/18/16 12:09 AM
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 … (2 comments)
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fha: Divorce and FHA Loan Applications
- 11/13/16 10:21 PM
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 … (1 comments)
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fha: High Voltage Lines and FHA Loans
- 11/04/16 06:03 AM
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 … (4 comments)
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fha: Commission Income and FHA Loans
- 10/28/16 12:08 AM
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 … (1 comments)
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fha: Mold Standards: An FHA Loan Question
- 10/23/16 07:14 AM
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 … (0 comments)
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fha: Residency And Occupancy: FHA Loan Rules
- 10/16/16 06:07 AM
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 … (1 comments)
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fha: Natural Disasters and FHA Loans
- 10/09/16 12:33 AM
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 … (2 comments)
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fha: FHA Proposes New Condo Approval Processes
- 09/29/16 11:27 PM
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 … (1 comments)
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fha: Well Water: FHA Loan Questions
- 09/22/16 11:01 PM
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 … (3 comments)
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fha: HUD Announces Fair Housing Protections For Borrowers W/Limited English
- 09/15/16 11:17 PM
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 … (0 comments)
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fha: Do You Have To Be A Citizen To Get An FHA Mortgage?
- 09/08/16 11:57 PM
One not-so-commonly asked questions about FHA loans is still an important issue to address. Here's a recent reader question on a borrower's ability to be approved for an FHA mortgage without being a U.S. citizen:
"Ive just moved to the US from the UK on a K-1 Fiance Visa. Ive been here around 5 months. Just received my work authorization card through the mail, waiting for my social security number now. Ive been working voluntarily since I arrived...would we qualify for an FHA Mortgage Loan? Ive contacted two lenders who have told us that we might be entitled to a loan but … (0 comments)
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fha: FHA Home Loans: General Rules
- 09/02/16 12:14 AM
FHA home loans are unique compared to conventional loans due to the lower down payment and more forgiving credit requirements. There are some basic rules governing FHA mortgage loans you should know about going into the process; keeping these in mind will save time and help you better prepare for the loan.
One of the key issues for FHA mortgages is the location of the home. According to HUD 4000.1, "The Property must be located within the U.S., Puerto Rico, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, or American Samoa."
That's a very basic requirement, but FHA loan rules … (0 comments)
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fha: FHA Loans & Appraisal Rules: A Reader Question
- 08/26/16 01:42 AM
A reader asks, "I have been told by my realtor and the lender that an appraisal on a house I own will be on record for 180 days. They said that the appraised value will be on record and no other FHA appraisal can be made during this 180 day period. Is there a master list that other lenders and appraisers cross reference during this six month period? My reading of your blog indicates that if another FHA buyer makes an offer on my property. a different appraisal would need to be performed."
HUD 4000.1 does indeed contain language that leads one … (2 comments)
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fha: FHA Loan Rules For Overtime Income
- 08/18/16 11:07 PM
A reader asks, "Can I use my current overtime income if I’ve been working at this company 20 months but my previous company I also had overtime which I worked there for 1 year and my previous before that I worked for 4 years with overtime?"
FHA loan rules require the loan officer to verify income that will be used toward calculating the borrower's debt-to-income ratio. Only verifiable income can be used, which means the lender must determine that the income is stable, reliable, and likely to continue. Income from a variety of sources may be considered.
Some FHA loan applicants have seasonal … (1 comments)
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fha: FHA Loans and Social Security Income
- 08/09/16 10:55 PM
A reader asks, "I dont understand if I have a 1099 and I have a benefits letter, and the letter that states at the end of the year what I am getting for the following year, why I am being asked or can be asked for something that states I will get social security for 3 years? There is nothing that says social security will give this to me or a name for it."
FHA loan rules governing Social Security income are found in HUD 4000.1, page 195 under "Other Sources Of Effective Income". The rules require the lender to make a … (0 comments)
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fha: FHA Loans And Personal Data
- 08/05/16 01:26 AM
A reader asks, "Must income verification documents include sensitive information, such as account numbers, full SS# and bank account number(s). Can verification be made with sensitive information being Blacked-Out or omitted, as to not expose ones self to possible criminality?"
FHA loan rules require the lender to verify personal information including Social Security Numbers, bank account numbers, credit reports, etc. So the lender will definitely be required to have that information at the bank's disposal to verify not only the identity of the borrower, but also the sources of down payment funds and other money as governed by HUD 4000.1.
HUD 4000.1, page … (0 comments)
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fha: FHA Loan Appraisal Fees: What You Should Know
- 07/15/16 12:43 AM
Watch "The Appraisal Fee" from FHA.com on Vimeo.
FHA loans, like their conventional counterparts, have closing costs, fees, and expenses all borrowers will need to budget and save for. One such fee is the FHA appraisal fee.
The video linked to above (click the image or the link to view on Vimeo.com) helps explain the appraisal fee, but there are some common issues related to appraisals you should also keep in mind. One is that sometimes appraisals require corrections as a condition of loan approval. And that can require a follow-up known as a compliance inspection.
Compliance inspections, where required, also come with a … (1 comments)
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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.
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