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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mortgage: 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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mortgage: 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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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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mortgage: 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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mortgage: 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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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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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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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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mortgage: 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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mortgage: 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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mortgage: 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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mortgage: 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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mortgage: 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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mortgage: 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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mortgage: FHA Home Loan Down Payment Requirements
- 01/06/16 12:04 AM
A recent question in our comments section asked if the down payment for an FHA home loan could be financed, or does it need to come "out-of-pocket". This is an important factor for FHA single family home loans as there is what the FHA describes as a "minimum cash investment" or down payment required that a potential FHA home loan applicant will need to budget for.
That down payment is, at the bare minimum, 3.5% of the "adjusted value" of the property. This is stated in HUD 4000.1 which says specifically:
"Minimum Required Investment (MRI) refers to the Borrowers contribution in cash or … (0 comments)
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mortgage: VA Fee Appraiser Facts
- 07/14/11 04:06 AM
VA loan applicants new to the home buying process or the VA loan process itself will learn a lot of new terms.
One of those is “VA fee appraiser”. When it’s time to make a serious offer on a house and get the property reviewed to be approved for a VA mortgage, the borrower must pay for an appraisal by a VA-assigned appraiser. In the documentation for VA loans, this person is often referred to as the “fee appraiser” which means the same thing.
The appraisal is required for the VA loan to be approved. It is not the same as … (1 comments)
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mortgage: Zero Down Payment VA Home Loans
- 06/20/11 04:23 AM
VA loans have one very attractive perk; unlike many other real estate loans you can apply for a VA mortgage with zero down payment.
Conventional loans and FHA mortgages require some form of down payment. Even when the percentage is low as in the case of an FHA insured mortgage, the amount of the down payment is several thousand dollars at the very least. The VA no money down option is definitely an important benefit, but don’t assume that it’s a standard part of every VA home loan package.
It’s not a guaranteed option–borrowers may encounter several situations where it’s not only in their … (1 comments)
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mortgage: Can I Get My VA Certificate of Eligibility Online?
- 06/01/11 01:41 AM
Veterans who have never applied for a VA home loan before soon learn they need a VA Certificate of Eligibility before the lender will allow them to move forward with a VA home loan.
This isn’t just a requirement set down by the bank, the Department of Veterans Affairs does not approve VA loans for those with no Certificate of Eligibility. The VA requires the veteran to sign and complete VA Form 26-1880, Request for a Certificate of Eligibility.
According to the VA official site at VA.gov, “You can apply for a Certificate of Eligibility by submitting a completed VA Form … (5 comments)
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mortgage: VA Joint Loans
- 11/18/10 03:38 AM
A first time home buyer who wants to buy a new home with a VA mortgage is likely thinking of the typical VA loan approach; a single applicant for VA home loan benefits.
But there are many more VA home loan options besides that traditional approach. For example, a VA borrower can apply for a VA joint loan which gives the veteran the option to have a co-signer. Co-signers on joint loans can include one or more fellow veterans who use their individual VA loan entitlement together on one home loan; the vets also have the option NOT to use their … (2 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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