July 2, 2020

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FHA Loans And Federal Law

078We’ve been discussing FHA loans, the Fair Housing act, and other federal laws lately. There have been many changes to applicable federal law in recent times that can and do directly affect the mortgage lending process.

It’s no surprise that the FHA single family home loan program, being created by the federal government, would lead the way in pro-consumer regulatory changes and set the example when it comes to requiring equal treatment for all qualified borrowers.

But some of the most important federal laws and regulations aren’t brand new–they’ve been around for quite some time. Some have been further modified to make them more inclusive. The Fair Housing Act now includes language that protects people regardless of their gender identity, family status, sexual orientation and much more.

FHA loan rules found in HUD 4155.2 identifies sections of the National Housing Act that protects borrowers in a variety of ways–and not just in connection to the issues mentioned above. According to Chapter One Section B, “Section 527 of the National Housing Act (NHA) prohibits denial of a federally-related mortgage loan on the basis of sex.”

But there are economic concerns as well: “Under Section 535 of the NHA, a lender is prohibited from requiring, as a condition of providing a loan to be insured by FHA, that the loan amount equal or exceed a minimum amount established by the lender.”

Federal law known as the National Affordable Housing Act also has something to say about FHA home loans: “Section 330(a) of the 1990 National Affordable Housing Act prohibits a variation in the mortgage rates charged by the lender (known as tiered pricing) that exceeds 2% for FHA-insured mortgages made on dwellings located within a particular area.”

All of these requirements add up to one thing–an set of protections for the borrower that he or she may not even be aware of, that dictates how the FHA home loan process is to be carried out. What happens if a lender violates these policies? According to HUD 4155.2 Chapter One, “Section 203 of the Helping Families Save Their Homes Act (HFSH) of 2009 contains provisions that place additional requirements on FHA-approved lenders and expand FHAs authority to pursue civil
money penalties for violations of program requirements.”

As you can see from the above, the FHA loan program is designed to provide genuine protection for borrowers under the law.

Do you have questions about FHA home loans? Ask us in the comments section.

Joe Wallace - Staff Writer

By Joe Wallace

July 16, 2015

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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