Articles Published in: July 2014

July 7, 2014

FHA Loan Reader Questions: Bankruptcy and Foreclosure

A reader asks, “I had a FHA mortgage with my previous home. Because of circumstances beyond my control, I had to file bankruptcy and my home was foreclosed on. It has been almost 2 years since the bankruptcy was discharged. Would I be eligible for another FHA mortgage and if so, when could I apply? Also my sister wants to buy the new home with me. Could she be a second borrower?” FHA loan rules are different depending on what kind of bankruptcy was filed. In some cases the borrower may not only be subject to a minimum waiting period, but also may need to get court permission in order to be obligated on the new home loan. For example, look at the rules covering Chapter 7 bankruptcy and a | more...

July 4, 2014

Happy Independence Day!

By Joe Wallace

Today we’re pausing the normal day-to-day routine answering reader questions, writing about FHA home loan, and FHA-related news that affects you; we’re celebrating the Fourth of July holiday and our usual posting schedule will return on Monday. Thanks for reading and have a safe, happy holiday!

July 3, 2014

FHA Loan Rules For School Debt: A Reader Question

By Joe Wallace

A reader asks, “My dad took out a Parent plus loan for me while I was in college. The loan is in his name but I make the monthly payment. My husband and I are applying for a mortgage and I was wondering if the monthly payment I make is going to count against my debt to income ratio in the lenders eyes even if the loan is in my dad’s name and not on my credit?” “I know we will be providing bank statements so I assume they are going to see the payments made per month and I just wanted to be prepared either way.” This is a situation the reader should definitely discuss with the lender–technically speaking the reader is not financially obligated on the loan mentioned | more...

July 2, 2014

FHA Refinance Loans and FICO Scores: A Reader Question

By Joe Wallace

A reader asks, “Would I qualify for and FHA Loan refinance with a credit score of 589 with no credit card debt, and all house payments have been made on time for the last three years? I really need to refinance. Please help!” FHA loan rules published in HUD 4155.1 state that a borrower with a credit score above 500 is technically eligible for a VA loan, though between the range of 500 and 579 the borrower is not eligible for maximum FHA financing–it’s limited to 90%. That means a 10% down payment is required at a minimum according to FHA regulations for new purchase home loans. For refinance loans, the implications are different–speak to your loan officer about what might apply in terms of an FHA cash-out refinance. The | more...

July 1, 2014

HUD Announces Settlement in Condo Housing Discrimination Case

By Joe Wallace

A press release at the FHA/HUD official site announces a settlement in a housing discrimination case featuring unlawful restrictions in a condo project. According to HUDNo.14-083, there’s an agreement between the Connecticut Fair Housing Center (CFHC) and a company called Lil-1 Associates, plus AllPoints Realty, and a realtor. “The real estate companies will pay more than $24,000 to settle allegations that they published discriminatory listings and advertisements for condominiums specifying that children were not permitted” according to the HUD press release. “The Fair Housing Act makes it unlawful to refuse to sell or rent housing on the basis of race, color, national origin, religion, sex, disability, or familial status. This includes refusing to allow families with children under 18 unless the property qualifies as housing for older persons.” Fair Housing laws | more...