fha loan: 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 loan: 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 loan: 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 loan: 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 loan: 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 loan: 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 loan: 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 loan: 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 loan: 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 loan: FHA Loan Questions: Overtime Pay
- 07/01/16 08:50 AM
We get many questions in our comments section about how FHA loan rules may apply to a specific situation with regard to employment, pay, and verifiable income.
Some potential borrowers want to know if having frequent changes of employment will negatively affect an FHA loan application (not necessarily) and others want to know if their new commission income will count towards their "effective income" (it depends on how long the commission income has been earned and whether it's likely to continue).
Still others want to know how the question of overtime pay is handled in the FHA loan rulebook. Recently, one reader asked:
"I … (2 comments)
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fha loan: FHA Loan Questions: Co-Borrowers
- 06/26/16 01:55 AM
A reader asks, "My husband is a co burrower on his mothers mortgage loan and he has been asking her to remove his name from it but she hasnt. The mortgage has affected his credit and has made it hard to get a home of our own. Can his name be removed from the mortgage or is this something we need a lawyer for?"
Before answering this question, let's examine how the FHA defines the role of a co-borrower. Page 128 of HUD 4000.1 states:
"To be eligible, all occupying and non-occupying Borrowers and co-Borrowers must take title to the Property in their … (2 comments)
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fha 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 loan: FHA Loan Questions: The Good Neighbor Next Door Program
- 05/26/16 08:13 AM
A reader asked us a question recently in the comments section about the HUD Good Neighbor Next Door program. "I am a 13 year veteran Corrections Officer of the Maryland's DCSCS and I wanted to inquire as to whether or not I qualified for the Good Neighbor Next Door Program."
The HUD Good Neighbor Next Door program is mentioned on the FHA/HUD official site, which states, "Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the … (0 comments)
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fha loan: FHA Loan Appraisal Rules: A Reader Question About Wells
- 05/20/16 12:34 AM
A reader got in touch with us recently to ask a question about wells and FHA loan approval. "Is a flow test required on a pre-existing drilled well in order to get financing using FHA? This is in a town where there is no public water and a drilled well is the normal. Well has passed all other test to determine all health safety and has been approved by the FHA appraiser."
FHA loan rules state that "Wells must deliver water flow of five gallons per minute over at least a four-hour period". Furthermore, "The Mortgagee must ensure that new wells are … (1 comments)
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fha loan: FHA Loan Tools
- 05/05/16 11:30 PM
If you are in the planning stages of a new home loan, there are plenty of FHA loan tools you can use to help you prepare. The planning stage of your new home loan is just as important as the house hunting, home inspection, and negotiation stages. Do you have the right tools to get started?
FHA Loan Limits
Knowing how much loan the FHA guarantees in your area is an important part of the process. FHA loan limits are not the absolute maximum you can borrow, but getting a bigger home loan above and beyond those limits may require you to work … (0 comments)
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fha loan: FHA Loan Rules and Individual Lender Standards
- 04/24/16 07:10 AM
A recent question in the comments section reminds us of the need to differentiate between lender standards and FHA loan rules. Both will have a say in loan approval, terms and conditions, and more.
The reader asks, "I was just in bank office today and yesterday. Yesterday before the lender saw my pay stubs i was pre-qualified for 70,000, now after seeing my work hours plus my W2. I'm now approved for only 30,000. How did that happen? I lost 40,000 just by not having 80 hours a week."
There are several issues at work here. The first is the nature of being … (1 comments)
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fha loan: FHA Loan Questions: Mixed Use Property
- 03/29/16 11:10 PM
We answer many questions about FHA home loans in the comments section. Here's one of the most recent, on the subject of mixed-use properties, co-borrowing, and more: "My sister and I want to buy a house that is 1/2 apartment, 1/2 store. I already own a home and have an 820 credit score. She has a 620 score, and would be the owner occupant. I am married. Does my husbands income affect the debt to income ratio? If not, am I only calculated as responsible for 1/2 of our mortgage payment each month?"
There are several issues that can affect the answers … (1 comments)
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fha loan: FHA Loans and the Importance of a Home Inspection
- 03/18/16 12:12 AM
The difference between an FHA appraisal and a home inspection is an issue that crops up frequently--especially in reader comments. Borrowers applying for an FHA mortgage to buy a home are required to have an FHA appraisal to insure that property meets minimum standards. But when a home passes the appraisal process or allows the loan to go through as long as required corrections are made, does that mean the property has been inspected and approved by the FHA?
Not according to the FHA official site, which says an appraisal is never a guarantee or endorsement of any kind. Borrowers should know … (0 comments)
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fha loan: FHA Loans And Your Credit Report: HUD 4000.1 Guidelines
- 03/10/16 11:06 PM
We get many questions about FHA loan credit standards. Some examples: "I have a charge-off on my credit report. Am I still eligible for an FHA mortgage?" "My credit reports show some missed payments on student loans. Will this affect my ability to get an FHA mortgage?" These are definitely questions worth asking long before you start the house hunting process.
Some borrowers are concerned with FICO score issues, others may have disputed accounts, or collection actions on their credit record. These things can worry a future home loan applicant, and with good reason--some credit issues are a barrier to loan approval, … (0 comments)
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fha loan: FHA Refinance Loan Types
- 02/23/16 06:09 AM
Do you want to refinance your home loan into an FHA mortgage or refinance an existing FHA mortgage? There are many different types of refinancing options and when HUD 4000.1, the new single family FHA loan rulebook was published in 2015 the entire refinance loan program rules were included in the new volume. That means some policies were updated, some were changed or modified, and some were simply restated.
HUD 4000.1 has a comprehensive list of the different types of FHA refinancing options open to those with single-family mortgages. Let's examine them:
FHA Cash-Out Refinancing
A Cash-Out Refinance is described in HUD 4000.1 as, … (0 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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