June 28, 2017

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Articles Tagged With: FHA Mortgage

FHA Jumbo Loans

FHA Jumbo Loans, also known as non-conforming loans, are mortgages that exceed the county limit for mortgage loans in that area. FHA home loans in excess of these limits (also known as FHA loan limits) are possible, but there are some important factors you should know about before applying. FHA Jumbo Loans Are Like “Standard” FHA Mortgage Loans Some borrowers want to know if they can apply for an FHA Jumbo Loan that exceeds the value of the home and take the remainder of the mortgage loan out in cash at closing time. FHA home loans are specifically designed to prevent cash back to the borrower at closing time except in the form of legitimate refunds. If you paid cash for something up front that was later financed into the | more...

 

FHA Refinance Loans: Payoffs and Buyouts

We’ve been examining the ins and outs of FHA refinance loans in our last few posts, but one issue we haven’t discussed yet is whether an FHA refinance can be used to buy out an existing title holder, applied for as part of an FHA short refinance, or to pay off land contracts. HUD 4000.1 has a list of the rules in these areas. Where short payoffs are concerned, the rules are fairly simple: “The Mortgagee may approve a Rate and Term refinance where the maximum mortgage amount is insufficient to extinguish the existing mortgage debt, provided the existing Note holder writes off the amount of the indebtedness that cannot be refinanced into the new FHA-insured Mortgage.” Do you need to refinance your existing mortgage in order to buy out | more...

 

HUD: June Is National Healthy Homes Month

The Department of Housing and Urban Development has announced the second-annual National Healthy Homes Month. According to a press release at the FHA/HUD official site, “Launched by HUD’s Office of Lead Hazard Control and Healthy Homes (OLHCHH), National Healthy Homes Month 2017 will focus national attention on ways to keep people of all ages safe and healthy in their homes.” That focus includes an emphasis on lead paint. According to the HUD official site, National Healthy Homes Month is themed, “Just What the Doctor Ordered,” and put the spotlight on “the vital role that pediatricians and the health community play in healthy homes education” The HUD press release observes that due to lead poisoning and other home-connected health risks, creating a healthier home environment should be a top priority. “National | more...

 

FHA Appraisal Problems: A Reader Question

A reader asks, “I had an FHA appraisal and that came down said everything was in good working order, inspection on roof and all windows. Everything said it was old but good. Bought the house, got $5,000 off for repairs but turns out all windows need to be replaced. Roof needs to be replaced, central air unit needs to be replaced (which was done). But windows are all broken, don’t work and roof is leaking, all plywood needs to be replaced…is there anything we can do or is this all on us?” The implication of this reader question is that the reader did not pay for the optional (but critically important) home inspection. We can’t speculate on what actually happened, but all borrowers should know that it is stated FHA/HUD | more...

 

FHA Loans And Multi-Unit Properties

FHA home loans are intended for owner-occupiers. The FHA loan occupancy requirement states that the borrower must begin using the home purchased with an FHA loan within a specified time after closing (usually within 60 days) and for a minimum of one year. But FHA loan rules also permit owner-occupiers to buy multi-unit properties. For multi-unit homes, the borrower must occupy at least one unit but is free to rent out the unused spaces in the home to others. FHA loan rules limit the number of units to four in these transactions. If a borrower intends to apply for an FHA loan for a home that has multiple units, it may be tempting to try to convince the lender to factor in any potential income from such rental as part | more...

 
Mortgage Loan Rate Trends

Mortgage Rate Trends: Pushing Higher

Since our last report, mortgage rate trends have been in the “higher” category. That’s due at least in part, according to our sources, to local political drama which has sent investors moving for safer havens. Those moves often reflect badly on rates, and those hoping for a chance to squeeze more recovery out of current trends likely weren’t counting on breaking news about possible impeachment proceedings over FBI director James Comey and questions of Russian involvement in U.S. politics to influence mortgage rates. But they have, however indirectly. At the time of this writing, 30-year fixed rate conventional mortgage rate numbers have taken an upward turn to 4.0%, best execution. That’s out of a previous range of rates, with 4.0% being the bottom end of the range. FHA mortgage loan | more...

 

An FHA Mortgage Post-Bankruptcy?

Is a mortgage loan possible after bankruptcy? When it comes to FHA home loans the answer is yes, as long as the borrower meets FHA loan standards and sits out a mandatory waiting period (which may vary depending on the bankruptcy, state law, and lender standards). One reader asked a question this week about bankruptcy and FHA loans: “My credit rating is 677 as of 5/18/2017. My income is established by a job that Ive held for over 15 years. My bankruptcy was completed in July of 2011. Can I qualify for an FHA mortgage?” There are many issues at work in situations like these including whether or not the borrower has established a satisfactory pattern of credit activity following the bankruptcy action. The mandatory waiting period (under FHA standards, | more...

 

FHA Loan Questions: Credit Score

Do FHA loan rules require more than one credit score for a borrower to qualify for a mortgage loan? That’s what one reader wants to know this week: “Can you tell me if FHA can lend if someone only has one score? It’s a 621 score. This home buyer had a short sale four years ago and did not rebuild credit as she decided not to get any credit cards. She has a debit card and that is it. Please advise if one score would be accepted?” FHA loan rules for credit score requirements are found in HUD 4000.1, the FHA single-family home loan rule book. HUD 4000.1 has instructions to the lender for credit score requirements which include the following about what is called the Minimum Decision Credit Score: | more...

 

FHA Loan Appraisal Questions: Well Water Guidelines

A reader asked us an FHA loan appraisal question this week about a recent post we did on water quality issues. “We have been requiring a safe water test to verify the water standards are meet per the guidelines but we now have an Loan Officer arguing that it is not required unless the appraiser notes an issue. Is a water test really not required have I been reading the guidelines wrong since 2015?” The “we” in this case would seem to be a participating FHA lender. Is the loan officer mentioned in the question correct? We turned to the relevant passages in HUD 4000.1 to reaffirm what the FHA loan rule book says about water quality. “The Mortgagee must confirm that a connection is made to a public or | more...

 

FHA Appraisal Questions: Defective Conditions

A reader asks a question about FHA appraisal issues: “Bought a house that was supposedly totally renovated about a 1.5 months ago. Finding out about major issues and violations in the house. There were a lot of concealed things hidden…found they had unlicensed contractors.” “Didn’t have the money to do a regular home inspection. People were saying FHA does their own home inspection to make sure house is safe…problems with windows plumbing illegal hookup with water main electrical box etc. Have to make a payment to mortgage plus fighting with seller to get licensed contractors…please tell me why didn’t FHA see these issues.” FHA appraisals must never be confused with a home inspection. The FHA and HUD warn borrowers of this in a document found on the FHA/HUD official site | more...