fha loan rules: 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 rules: 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 rules: 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 rules: 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 loan rules: 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 loan rules: FHA Adjustable Rate Mortgages
- 06/19/16 11:08 PM
The government's consumer protection agency, The Consumer Financial Protection Bureau (CFPB), has a page on its official site explaining the differences between a fixed rate mortgage loan and an adjustable rate mortgages, sometimes known as ARM loans.
According to the CFPB, "The difference between a fixed rate and an adjustable rate mortgage, is that for fixed rates the interest rate is set when you take out the loan and will not change. With an adjustable rate mortgage, the interest rate may go up or down. With a fixed rate mortgage, the interest rate is set when you take out the loan and … (2 comments)
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fha loan rules: FHA Home Loan Interest Rate Questions And Answers
- 06/09/16 11:17 PM
There are many questions about FHA home loans, especially where interest rates are concerned. Do you know how the FHA loan process works when it comes to negotiating rates or choosing a fixed rate or an adjustable rate mortgage loan? Here are some of the most common questions and answers in this area:
How does the FHA set interest rates on FHA mortgage loans and refinance loans?
In general, the FHA actually does not set or regulate interest rates on FHA home loans. For certain loan products there are restrictions on how interest rates can be changed or modified, and there are rules … (1 comments)
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fha loan rules: 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 rules: 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 rules: 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 rules: 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 rules: 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 rules: HUD Proposes Changes To Manufactured Housing Standards
- 02/10/16 10:32 PM
One common question asked by some about the FHA single-family home loan program is whether an FHA mortgage can be used to purchase an RV-type mobile home or a houseboat.
The answer in both cases is no because a house boat or recreational vehicle/RV motor home cannot be affixed to a permanent foundation. Therefore they cannot be sold as "real property" under the law, which makes them ineligible for an FHA mortgage.
The lines between recreational vehicles and manufactured housing or mobile homes can be blurry sometimes--why do some people confuse an RV with a mobile home? Foundation issues and real property status … (15 comments)
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fha loan rules: Why Use An FHA Loan Mortgage Calculator?
- 02/04/16 11:22 PM
When you are planning your home loan, there are many aspects to consider. The selling price of the home is only one of those aspect; borrowers will need to save money for closing costs, a home inspection, and make a monthly budget for the mortgage amount, plus taxes and insurance.
Some of the planning phase of your FHA mortgage involve things like requesting copies of your credit reports--things with concrete numbers such as FICO scores and payment amounts. But when it comes to figuring out your mortgage payment, arriving at the actual number can be a bit tricky.
That's one reason why it's … (2 comments)
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fha loan rules: FHA Mortgage Loan Limits For New Purchase Loans And Refinance Loans
- 01/28/16 09:33 PM
We've gotten some questions recently about FHA mortgage loan amounts, so it seemed like a good time to post the FHA loan rules found in HUD 4000.1 about how maximum loan amounts are calculated.
There are FHA loan guaranty limits and FHA mortgage loan amounts--the two shouldn't be confused as FHA mortgage loan guaranty limits refer to the amount of money the FHA will guarantee for the loan, whereas the maximum loan amount is the highest amount for a specific transaction that the lender/FHA loan rules will allow. FHA loan rules say the maximum can be affected by the type of transaction.
You … (0 comments)
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fha loan rules: 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 loan rules: 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 loan rules: FHA Mortgage Loans and Unpaid Federal Debts (Including Taxes)
- 11/01/15 01:38 AM
Here is a common type of question about applying for an FHA mortgage loan when you have owe a debt to the federal government:
"Can anyone tell me what the guideline for FHA loans regarding payment plan with IRS when you do not own property and you owe taxes? "
FHA loan rules here are basically concerned with giving lenders a yardstick to measure a borrower's creditworthiness with regard to federal debt--and that means that a lender is responsible for insuring the borrower is not delinquent on the payments of that debt.
Borrowers who are delinquent and are shown to be delinquent through the … (1 comments)
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fha loan rules: FHA Loan Rules In HUD 4000.1: Frequent Changes In Employment
- 10/18/15 10:43 PM
HUD 4000.1, the recently published Single Family Home Loan policy rule book, has either reprinted, revised, updated, or restated FHA loan policy for all single family home loan transactions. That's why we're examining some of the most important-to-the-borrower sections of the new rules--bringing you the latest FHA requirements so you can make informed decisions about your FHA loan or refinance loan.
One area we get asked questions about on a regular basis is FHA loan policy toward borrowers who have recently changed jobs, or frequently change jobs due to the nature of their work. How do FHA loan rules address such issues?
The … (0 comments)
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fha loan rules: FHA Loan Appraisal Rules: The Roof
- 10/04/15 11:33 PM
A recent reader question about FHA appraisal requirements on roof issues had us looking up details on those requirements in the new FHA Single Family loan handbook, HUD 4000.1.
The previous FHA loan rulebooks including HUD 4155.1 and HUD 4155.2 have been superseded by HUD 4000.1, so it seemed like a good idea to post the FHA's current appraisal requirements for the roof since it's one of the most commonly asked-about parts of the home with respect to the FHA appraisal process.
When the FHA appraiser comes to review the property, the roof is one of the areas that must be evaluated. According … (1 comments)
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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?
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