August 20, 2017

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Articles Published in: May 2011

What Disaster Relief is Available For FHA Borrowers?

Recent headlines all across America have told of floods, tornadoes and other natural disasters, all of which affect FHA borrowers, their homes and their mortgages. When an area is declared a major disaster area by the President of the United States, FHA borrowers should know there are programs that can help them in the wake of the disaster, provide help and forbearance on FHA loans, and even temporarily stop foreclosure proceedings. FHA officials urge borrowers to contact the FHA and the lender as soon as possible in the wake of a disaster as there are many steps that need to be taken in order to get help, advice and work on repairing a home damaged in the disaster area. But even before those calls are made, the FHA has begun | more...

 

FHA Minimum Property Requirements (Part Two)

In our last blog post we discussed FHA minimum property requirements. Any home a buyer wants to make a serious offer on with an FHA insured loan must live up to the FHA’s minimum property standards or the loan cannot be approved. That doesn’t mean the home must be 100% in compliance when the appraiser comes to review the property, but it does mean that any deficiencies found must be corrected prior to the loan being closed upon. The FHA has three basic principles that guide an FHA appraiser when examining the home–it must be safe, sound, and secure. There are specific requirements in each area. For example, a home must not have stairways that aren’t equipped with hand rails, there must be no exposed wiring in the home, and | more...

 

FHA Loans: Minimum Property Requirements

First-time applicants for an FHA mortgage learn soon learn about the FHA’s list of minimum property requirements, which any property bought with an FHA insured loan must live up to in order to get loan approval. The FHA has three guiding principles that inform its list of minimum property requirements, defined by what some appraisers call “the three S’s” which include safety, soundness and security. An FHA appraiser will come to inspect the property a borrower wants to buy, looking at the home to make sure it meets the FHA standards in each of these three areas. When it comes to safety, the FHA tells its appraisers, “Deficiencies or a lack of functioning components of plumbing, electrical or heating and cooling systems may create hazards that could be considered health | more...

 

Can I Assume an FHA Loan?

There was a recent question in the comments section of this blog about FHA loan assumptions, so we thought it would be a good time to review the basics. Assumption of an FHA loan is a process where, according to the FHA official site, “the responsibility of the mortgage is acquired by another person through either Simple or Creditworthiness process.” This means that a potential borrower could take over the FHA mortgage of another borrower, but in some cases the process varies depending on when the FHA insured loan was originated. The “Simple” assumption process is only for FHA loans originated before December 1, 1986. Loans after that date may also be assumed, but the FHA requires a “creditworthiness assumption process”. Simple assumptions allow the borrower and lender to agree | more...

 

FHA Loans And Your Credit–What Is The Lender Looking For?

In our last blog post, we discussed FHA loans and credit history. Many people are afraid to apply for a home loan because of past credit mistakes, but it’s easy to assume the worst about credit reporting, your history with credit, and what an FHA approved lender is looking for when reviewing an FHA loan application. In some cases, those assumptions also apply to a lack of credit history. An FHA lender must investigate the applicant’s credit reports. A few late credit card payments or other minor issues in the past aren’t enough to condemn the borrower or have an application rejected. The FHA rules don’t have a chart for counting credit issues and a cut-off number for how many late payments are too many. Instead, the FHA rules state, | more...

 

FHA Loans and Your Credit History

A home loan is a major investment. Many borrowers are nervous about the credit qualifying portion of an FHA home loan application because they’ve made mistakes in the past with credit, have collection judgements in their record or have experienced bankruptcy. Those who have been through foreclosure sometimes assume they can never get their credit rating repaired enough to qualify for a home loan. But in many cases such fears are not warranted–at least where FHA loans are concerned. Conventional loans are more difficult to get in the wake of housing market woes, a bad economy and other factors, but borrowers trying for an FHA mortgage soon learn there are more options available than one might assume. According to the FHA rules, getting access to those options means having a | more...

 

FHA Loans: What Are the FHA Requirements For Sewer/Septic Systems?

FHA loans require a property to meet certain requirements before a loan will be approved. FHA loan applicants looking at properties that can’t meet such minimum property requirements must look elsewhere, but when a property can be modified, repaired or improved to meet those standards, FHA rules allow that to happen. Some properties have features that can’t be improved–some homes are situated in areas where well water is the only source available, and if the well doesn’t meet health and safety standards, the home may be considered inappropriate for an FHA mortgage. One similar area concerns septic and sewage systems. What are the FHA requirements for septic/sewage? FHA rules state that the lender is responsible for making sure a particular property lives up to local requirements and that community sewage | more...

 

FHA HECM Loans and Fees For Required Counseling

An FHA Home Equity Conversion Mortgage or HECM loan lets qualified borrowers age 62 or older get a loan on their home which is not paid back in any way until the borrower dies or sells the property. Borrowers can get a line of credit or cash payments (or combinations of the two) depending on how the loan is set up. There are specific rules and requirements for HECM loans, and borrowers must get mandatory HECM loan counseling through an FHA-approved agency before the loan will be approved. The FHA is strict about the counseling requirements–an informed borrower is able to make the right choices for their circumstances. But HECM counseling is not free, and the counseling agencies are not government entities. Because the borrower is required to pay a | more...

 

FHA Loans: The Difference Between a Co-Borrower and a Co-Signer

When applying for an FHA home loan, a borrower does not have to share the financial responsibility for the mortgage all by themselves. FHA rules allow a co-borrower or co-signer to apply alongside the borrower. In some cases this can improve the FHA loan applicant’s chances of getting a loan approved, and it’s also a way for a borrower with established credit to help a co-borrower become a home owner under the proper circumstances. It’s easy to assume a co-signer and co-borrower are the same thing, but in the eyes of the FHA and the lender, these are two separate terms. Co-signers don’t have the same benefits as co-borrowers, though they may share the same responsibilities in many cases. According to the FHA, “Co- borrowers take title to the property | more...

 

FHA Loans: Is A Property Eligible for an FHA Loan If It Has Asbestos?

Borrowers interested in purchasing older properties using an FHA insured mortgage could face several challenges depending on the nature of the property. For example, some buildings insulated or otherwise constructed with asbestos products could pose a health hazard. FHA rules include minimum property requirements for safety, which address situations like these. Is a property eligible for an FHA loan if it has asbestos in it?