fha home loan: 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 home loan: 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 home loan: 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 home loan: 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 home loan: FHA Mortgage Loan Terms: Understanding Equity
- 07/24/16 11:55 PM
Let's Talk About Home Equity from FHA.com video on Vimeo.
Equity is an important term to understand when you're applying for any kind of mortgage loan, but for some loans equity is a larger factor than others. For example, when you apply for a new purchase FHA loan to buy a home, you start out with 3.5% of the adjusted price of the home as your equity. That's the amount of your down payment, and the equity grows over time with the number of payments you make.
When you apply for a home equity loan, a home equity line of credit, or an … (3 comments)
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fha home loan: FHA Loans Versus Conventional Loans
- 07/08/16 12:52 AM
What are the differences between FHA home loans and conventional loans? There are several, some features of mortgage loans can vary depending on the lender, and state law may also affect how your home loan is handled depending on circumstances, but there are a few very important general differences to keep in mind when comparing FHA loans to conventional loans.
The first difference is the basic nature of the loan itself. Conventional loans are not backed by the government, unlike FHA home loans where the FHA guarantees a portion of the loan to make it more attractive to the lender to issue … (4 comments)
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fha home loan: FHA Loan Questions and Answers
- 06/04/16 12:55 AM
Tired of renting and looking to purchase a home of your own? There are many questions many first time home buyers or first time FHA loan applicants have. Here is a list of some of the most frequently asked questions about FHA mortgages.
Is There An Income Limit For FHA Loans?
No. FHA mortgages are not designed specifically for one type of financial situation or another. You cannot "earn too much" with the FHA single family home loan program. All wage earners are encouraged to explore their FHA loan options.
Is There A First-Time Home Buyer Advantage Or Preference With FHA Mortgages?
While an individual … (0 comments)
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fha home loan: Ordering a Second FHA Appraisal: The Rules in HUD 4000.1
- 03/02/16 10:38 PM
There are many questions about the FHA appraisal process--we get many in the comments section asking about the nuances of FHA appraisals. One typical question has to do with when a second appraisal is appropriate or permitted. Can a second FHA appraisal be ordered if the borrower or lender doesn't agree with the outcome of the original?
HUD 4000.1 spells out the rules for FHA appraisals including "second appraisal" requirements. They include the following:
"The Mortgagee is prohibited from ordering an additional appraisal to achieve an increase in value for the Property and/or the elimination or reduction of deficiencies and/or repairs required. The … (2 comments)
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fha home loan: FHA Loans, Credit Issues, And Down Payment Assistance Programs
- 12/21/15 04:11 AM
A reader got in touch recently to ask about FHA loan credit requirements and down payment assistance programs. That question includes the following:
"...My (FICO) score was about 500 for years till I finally am working with the Lexington Law Firm that Im paying $99 a month that I have 3 negatives I still am owing but I see that now I have my score went up to 648 which is fair but I want to know about the loan."
"Will FHA approves me to get a loan to buy a house in PA. But Im not quite sure about AmeriDream that if … (0 comments)
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fha home loan: HUD 4000.1 On Appraisal Expiration Dates
- 12/14/15 11:39 AM
Ever since the FHA and HUD published the new FHA single-family mortgage loan rule book, HUD 4000.1, we've been examining important sections of the rules to see what current FHA mortgage loan policy is; FHA and HUD announced there would be no comparison document outlining the myriad of changes from the old guidelines to new and that it was the reader's responsibility to learn what current policy might be for any given FHA loan topic.
With that in mind we started reviewing HUD 4000.1 and discussing important issues. One such issue is the FHA's rules on appraisal expiration dates. FHA appraisals are … (1 comments)
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fha home loan: FHA Home Loans For Existing Properties: Weatherization
- 12/07/15 08:45 PM
Did you know that in certain cases, FHA single-family home loan rules in HUD 4000.1 permit the borrower to add funds to weatherize an existing construction home being purchased with an FHA mortgage? According to HUD 4000.1:
"The weatherization product permits the Borrower to finance the cost of eligible energy-related weatherization improvements, in conjunction with a purchase or refinance."
This is separate from an FHA Energy Efficient Mortgage (EEM) though that can also be included in the loan for qualified borrowers. From HUD 4000.1:
"Weatherization improvements may be financed in conjunction with the following:
--Section 203(b) purchase transaction (or) no cash-out refinance transaction
--Section 203(h) … (0 comments)
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fha home loan: HUD 4000.1 On Calculating Maximum Mortgage Amounts For Purchase Loans
- 12/06/15 09:42 AM
HUD 4000.1 was published earlier in 2015, and contains new, updated, and restated FHA loan policy on single-family mortgages, refinance loans, HECM loans and more.
One important section of the new FHA home loan rules for single family mortgages is the part of HUD 4000.1 that discusses maximum mortgage loan amounts. Do you know what the rules are for calculating the maximum loan amount on a new purchase FHA loan?
According to HUD 4000.1, "The maximum mortgage amount that FHA will insure on a specific purchase is calculated by multiplying the appropriate LTV percentage by the Adjusted Value. In order for FHA to … (0 comments)
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fha home loan: The FHA Appraisal Process: Selecting An Appraiser, Appraisal Integrity
- 11/08/15 09:45 PM
HUD 4000.1, the new FHA single family home loan rulebook, has specific instructions to participating FHA lenders about the appraisal process. An appraisal is required as we learn from this line in Part II Section A of the rulebook:
"The Mortgagee must order a new appraisal for each Mortgage or refinance case number assignment and may not reuse an appraisal that was performed under another case number, even if the prior appraisal is not yet more than 120 Days old."
The mortgagee, or participating lender, is required to insure the integrity of the appraisal process as follows:
"Appraisers must comply with the Uniform … (1 comments)
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fha home loan: FHA Loan Rules: Income From Government Assistance, Military Benefits
- 08/13/15 12:50 AM
We've written elsewhere about the importance of the borrower's verifiable income when it comes time to fill out an FHA loan application and have the lender review the amount of money coming in versus how much goes out for financial obligations. A borrower's employment income is very important, but the job you have may not be the sole source of income at application time.
For some applicants there may be military income, public assistance or other types of government income for the lender to consider. What are the FHA loan rules for this type of income? Is it allowed at all?
The loan … (2 comments)
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fha home loan: FHA Loans And Pre-Payment
- 07/31/15 01:29 AM
One of the important selling points of an FHA mortgage loan is the basic differences FHA mortgages have from conventional loans; the lower down payment, more forgiving credit requirements, and a rule that a borrower is able to freely dispose of the property in any way he or she sees fit once the deal is closed and the borrower has taken up residence in the home.
But there's another important difference between some conventional mortgages and FHA loans. Did you know that under the FHA loan program you cannot be penalized or charged for early payoff of the loan?
HUD 4155.2 Chapter Three … (3 comments)
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fha home loan: FHA Single Family Home Loans: Owner-Occupiers Only
- 06/23/15 01:11 AM
Recently we answered a reader question in the comments section about the nature of FHA single-family home loans. The reader wanted to know if it was possible to get an FHA home loan on a home to be used as a rental property or as a guest house for visitors, etc.
The short answer to this question is no. FHA loans are designed for those who intend to purchase a home and move into it when the loan closes. The borrower is required to occupy the home as his or her personal, primary residence as a condition of loan approval. This would … (1 comments)
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fha home loan: What You Should Know About FHA Loan Interest Rates
- 06/12/15 11:36 PM
We get many reader questions about interest rates on FHA home loans, and it's clear from these questions that a misconception still exists--some people believe the FHA sets or regulates the interest rates on FHA single family home loans. This is not true, but in spite of that we get variations on a common type of question that goes something like this: "Should I expect an FHA loan interest rate above XYZ? What kind of interest rate should I be getting?"
The truth is that FHA loan interest rates, while lower than the conventional equivalents, is still subject to negotiation between the … (5 comments)
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fha home loan: FHA Appraisals: Sewer & Septic
- 05/10/15 08:52 AM
A reader asks, "We closed on house on 3/31. Had inspection. Stated was sewer, prev owner said was sewer, realtor said was sewer. On 5/8 found waste backed up in toilet in basement, called plumber, found out we have a septic system, currently waiting on them to come out inspect and pump."
"We have a FHA loan. How was this missed? we have no problem paying to have it pumped, but who is responsible if it more then pumping out issue? The company we called (only one in area) stated he had just pumped it 2 years ago. So prev owners knew it … (2 comments)
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fha home loan: FHA Loans For Purchasing A Second Home: A Reader Question
- 04/30/15 12:27 AM
A reader asks, "I applied for a fha loan my contract on the house I am to purchase expires Thursday. I found out Wednesday night that I have to apply for an exception for the 2 fha loan rule and the house I am currently in and have on the market is a fha. I did not know this."
"I qualify for both loans but have no clue how to apply for an exception. I am sure I should be able to get it as I travel 1 hr 10 mins to 1 hr 40 mins each way to work due to … (0 comments)
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fha home loan: FHA Loans For Investment Property? A Reader Question
- 02/20/15 06:31 AM
A reader asks, "I have a grand daughter who is looking to buy a fore close house asking only 12, 000.00.. Is there a program out there to help her. some one had started doing repairs to the house. a new bathroom, up dated kitchen tile kitchen and bathroom floors. She wants to use this property as a investment."
The FHA single family home loan program is intended for owner-occupied residences only, so the basic answer to this question (where FHA single family home loans are concerned, which is the focus of our blog) is no--at least for new purchase … (1 comments)
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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.
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