Articles Published in: May 2013

May 9, 2013

FHA Loan Reader Questions: HOA Issues

A reader asks, “The town home next door is ruined by fire in July 2012 and not repairing. Trash in carport…I have one wall connecting with that house and my roof is damaged too. I contacted the HOA (I pay $ 100 each month and they should repair roof, clean up territory, etc) but they will DO NOT make any repairs or clean-ups. Even broken sidewalk by broken unit not repaired! I contacted the City and few Code Enforcement officers show up, now is almost year gone but no repairs…I call Code Enforcement again, but they told me, ‘case in progress’ and nothing more. How I can save my house from damage from that broken unit next door – and make Association do the work and repair the roof and | more...

May 8, 2013

FHA Loan Reader Questions: Down Payments

By Joe Wallace

A reader asks, “I have applied for an FHA loan. However, the home price is over the FHA limit in our area. We have enough money to get to the maximum loan amount, but we are not clear if that will be sufficient or if we will still need an additional 3.5% on top of that?” “As an example only – Let’s say the house costs $365,000 but the maximum FHA loan amount is $330,000. If we put down 35,000 to bring the loan amount to $330,000 will we still be required to put down more money?” The answer to this question is a bit complex, but we’ll quote the FHA loan rules word-for-word for maximum clarity. According to the FHA loan rulebook, HUD 4155.1 Chapter Five Section B, “Under | more...

May 7, 2013

FHA Loan Reader Questions: Mortgage Insurance Premiums

By Joe Wallace

A reader asks, “My home has more than 50% equity and I am thinking about refinancing with an FHA loan… will i still need mortgage insuranc3e for the life of the loan.. or can it be cancelled after verification of equity?” FHA loan rules for annual mortgage insurance premiums are changing. Some of the rules have already taken effect, and others go into effect on June 3 2013. FHA Mortgagee Letter 2013-04 says: “For loans with FHA case numbers assigned on or after June 3, 2013, FHA will collect the annual MIP for the maximum duration permitted under statute.” Additionally, “For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP)) less than or equal to 90 percent LTV, the annual | more...

May 6, 2013

FHA Loan Reader Questions: Do All Homes For Sale Require an Appraisal?

By Joe Wallace

A reader asks, “Do all homes need an inspection and an appraisal? My sister-in-law is the seller and is worried (about an) older kitchen; FHA may not give me a loan. The home is in good condition and the family already did an appraisal in order to get an asking price.” There are two separate procedures asked about in this reader question–an appraisal is not the same thing as a home inspection, but both are important parts of the home buying process. A home inspection is a voluntary service the borrower can and definitely SHOULD budget for when purchasing a home with any kind of mortgage whether it is an FHA, conventional, VA loan, etc. The home inspection is a more up-close look at the condition of the property and | more...

May 3, 2013

FHA Loan Answers: Legal Age For FHA Loans?

By Joe Wallace

A reader asks, “Does one of the co-borrowers have to be enrolled in college, or can one of the applicants be a young employed adult?” FHA loan rules require borrowers to be of legal age acceptable in the laws of your state. If you are old enough to sign a legally binding contract in the eyes of the law, you are old enough to apply for an FHA home loan. That does not guarantee loan approval–the FHA requires the lender to review all borrowers and co-borrowers for creditworthiness, income, employment and credit scores. A borrower who is at the legal age in his or her state, but does not meet credit standards would not be approved for a VA home loan. Borrowers who are in college would still need to | more...

May 2, 2013

FHA Loan Reader Questions: Short Sales, Credit Scores and FHA Loans

By Joe Wallace

A reader asks, “I was in the Independent Foreclosure Review. I was put in a modification for a year made all my payments and they sold my mortgage and then sent me a letter saying I was denied. I ended up short saleing on 7/5/11. My credit score is 561, what are my chances of getting an FHA loan?” Short sales in and of themselves may not be an automatic barrier to an new FHA home loan if the borrower was current on the mortgage at the time of the sale. You may find that in cases where there was a delinquency or late payments at the time of the short sale, a borrower may be required to wait at least 12 months from the time of the last late | more...

May 1, 2013

FHA Reaches Agreement With Maryland Mortgage Company Over Discrimination

By Joe Wallace

The FHA and HUD official site features a press release on a recent agreement between HUD and a Maryland-based mortgage company over allegations of discrimination and violations of the Fair Housing act. According to HUDNo.13-061, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached a Conciliation Agreement with Primary Residential Mortgage, Inc. (PRMI), in Salt Lake City, UT, settling allegations that the lender denied a Baltimore, Maryland woman a mortgage loan because she was pregnant and on maternity leave.” Fair Housing Act laws forbid lenders, sellers, landlords and others involved in housing from discriminating against borrowers based on “sex, race, color, national origin, religion, familial status, or disability” according to the FHA. The press release states, “Refusing to approve a mortgage loan or to provide | more...