October 17, 2017

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Articles Published in: September 2014

What you should know about FHA 203(h) Loans For Disaster Victims

FHA Mortgage Insurance: A Reader Question

A reader asks, “Mortgage companies have kept sending letters/emails, saying ‘You no longer pay MIP because FHA MIP policy has been changed since May 2014. You have paid unnecessary MIP payments because since you has refinanced for your home 2012.'” “I refinanced my home mortgage through FHA in Mar.2012 and since then I have paid MIP until principal reach less than 78%. It will be by 2019 according to my mortgage company. Can you clarify ‘Revision of Federal Housing Administration (FHA) policies concerning cancellation of the annual Mortgage Insurance Premium (MIP) and increase to the annual MIP’? Dose cancellation of MIP mean ” home buyers who apply finance through FHA do not need to pay MIP? Should I stay with my current mortgage or refinance?” This reader question refers to | more...

 

FHA Loan Terms and Payment Plans: A Reader Question

A reader asks, “I am trying to relocate to a new home with my three small children and would like to use an FHA loan to purchase it. I was told about a 40 yr note with yearly payments? Is there such a program? I am currently enrolled in school, working towards my bachelor’s degree in nursing. I have access to some funding for a down payment, approx $30,000. I have also located a home that I want to purchase. 3 bed, 3 bath on 25 acres, approx value of $89,900. Can someone please help me find the right loan to purchase this home?  FHA loans have specific rules about the term of the loan. According to HUD 4155.1, under the section titled Maximum Loan Limits, Mortgage Amounts and Mortgage | more...

 

FHA Mortgage Rate News For The Week of September 22 2014

September has been a rough month for FHA mortgage loan rates–there’s been an upward trend fueled at least in part by the recent Fed policy statement, which many anticipated as a possible indicator of where rates might be headed (predicting investor reaction to an announcement that indicated a stronger or weaker economy). But this week, we saw rates moving lower–the best execution numbers haven’t really changed, but the downward trend is a welcome one. In many cases borrowers will see the lower moves reflected in closing costs rather than in actual lower interest rates, but if the downward movement continues we may well see FHA rates shift out of their current range of numbers and back into the lower best execution rate of 3.75%. The downward trend we saw this | more...

 

FHA Mortgage Insurance Premiums: A Reader Question

A reader asks, “I am purchasing a second home using a FHA loan. Why is it necessary to pay for FHA insurance for the length of the loan it is a 30 year fixed mortgage?” While we can’t speculate what the FHA/HUD motivation for changing the FHA MIP requirement for 30 mortgages, we can reiterate FHA loan policy on the matter, which changed back in January 2013. In a Mortgagee Letter (FHA ML 2013-04) FHA loan policy for mortgage insurance premiums changed to require MIP payments for the duration of a 30-year FHA loan. According to the FHA official site: “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. See 12 U.S.C. § | more...

 

FHA Loan Occupancy Requirements: A Reader Question

A reader asks, “I currently have a 3 year old VA mortgage on my home. Will this disqualify me for a FHA loan on a second home?” FHA loan rules state that the borrower must certify he or she will occupy the home to be purchased with an FHA mortgage as the primary residence. A borrower who purchased a home with a VA mortgage loan is also required to certify in such a manner, but if the applicant closes the deal on the VA loan, moves into the house and uses it as the primary residence, the occupancy requirement is considered fulfilled in the eyes of the VA. The means that if the borrower is financially qualified for the FHA mortgage and can certify the new home will be the | more...

 

FHA Appraisals and Loan Approval: A Reader Question

A reader asks, “In our contract, we agree and stated the sale was as is. The price had been adjusted for this. We listed that the a/c needed repair on the disclosure. I did not want to spend the money to repair it because I live alone and put in window units, plus my buyer said she planned on replacing it anyway.” “This was noted on our contract. 3 months later the lender says the a/c has to be in working order, even though the window units work fine and the central heat did work. I had it fixed, $825.00 for a circuit board! What a waste of money. I would rather have given it to my buyer to replace the whole thing! Since they knew about this upfront, should | more...

 

FHA Loan FICO Score Requirements: A Reader Question

A reader asks, “I have a plan to pay off my student loan this year which is 18,000.00. My credit score is 565. This will leave me with 0 debt. Will it also improve my credit score and chances of getting a home loan?” These types of questions are difficult to answer because credit reporting agencies have their own criteria for evaluating credit, and apply their own standards for factors that might affect scores pushing them higher or lower. You may find that your FICO score reported by one agency are not the same as reported by another. That’s why FHA lenders look for a FICO score average to determine eligiblity. Having no debt is certainly a plus for an FHA loan application, but a borrower’s credit activity in the | more...

 

Fair Housing Act Violations: A Reader Question

A reader asks, “I am trying to sell my manufactured home and the land it sets on to a couple that are not married from California, the lienholder refuses to do this because they are not married, isn’t this a violation of Federal Law?” The Fair Housing Act makes it illegal to discriminate against a house hunter–a buyer or renter–based on family status. That includes being married, not married, a single parent, etc. The Department of Housing and Urban Development official site (which is also home to the FHA official site) states the following basic information on the Fair Housing Act: “The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use | more...

 

HUD Announces Settlement In North Dakota Housing Discrimination Case

We post news stories about settlements in housing discrimination cases for several reasons, but one of the most important is to remind borrowers that FHA loan applications aren’t immune from problems such as these. The first line of defense against continued violations of the Fair Housing Act usually comes in the form of complaints filed against companies that violate federal law. With that in mind, we bring news of a recent settlement between HUD and a North Dakota company over housing discrimination complaints. According to press release HUDNo.14-106, ” The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached an agreement with U.S. Bank National Association, U.S. Bank subsidiary Red Sky Risk Services, LLC (formerly known as USB Lending Support Services, LLC), and one of | more...

 

FHA Minimum Property Requirements: Central Air

A reader asks, “I am trying to purchase a home with an FHA loan. The central air in the house I’m trying to purchase is not working, however, the owner has window units in each room. They all work and cool the house very nicely. I was planning on replacing the central air after purchasing the home. I’ve been told the house will not qualify because the central air is not working. Won’t the window units suffice as meeting the minimum standards of living?” One interpretation of the FHA minimum property standards in this situation would be that it’s not the presence of the window units in the home that would be the issue, but rather than an installed appliance/system in the home is not functioning properly. The home may | more...