fha mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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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fha mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: 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 mortgage: FHA Loan Questions: Paying Fees
- 04/10/16 10:55 PM
A reader asks, "Is their costs in an FHA loan the the seller has to pay for the buyer, and if so what are those costs?" FHA loan rules in HUD 4000.1 permit "interested parties" to contribute a certain amount towards approved expenses of an FHA mortgage loan for a new purchase. The rules for these contributions are found starting on page 220, which has both a definition of the phrase, and the types of costs these parties may contribute.
"Interested Parties refer to sellers, real estate agents, builders, developers or other parties with an interest in the transaction. Interested Party Contribution … (0 comments)
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fha mortgage: 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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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."
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