Articles Published in: November 2016

FHA Loans And Natural Disasters: What You Should Know

November 15, 2016

FHA Loans And Debt: A Student Loan Question

A reader asks, “I am a mother who is on a fixed income of $1600.00 a month in ft laud. my son is going to be the co borrower who lives and works in LA. Makes a good salary. We already got pre-qualified up to 300k, our credit score is above 680…question is my son has student loan of 33k and is in forbearance until next year. Will this be a problem with (an) FHA loan?” FHA loan rules in HUD 4000.1 instruct the lender on how to view debt, debt ratios, and the kinds of debt known as “deferred obligations” which may not affect the borrower’s debt to income ratio in the short term, but can do so after a home loan has closed. Sometimes, FHA loan approval may | more...

November 14, 2016

What Kind Or Refinance Loan Do You Need?

By Joe Wallace

Buying a home is sometimes only the first step in a larger financial journey-if you purchase a home with a conventional, VA, FHA or other type of mortgage loan, you might not be thinking about refinancing. But it’s an option that can be helpful in a variety of ways, especially if you understand how FHA refinance loans work. Choosing the right refinance loan is an important part of the process. Existing FHA mortgages have a refinance option that allows the borrower to get into a lower interest rate/monthly payment. This option is called the FHA Streamline Refinance mortgage and has no FHA-required appraisal or credit check. Depending on lender standards you may need one or both regardless, but the lender is free under FHA loan rules NOT to require them. | more...

November 14, 2016

HUD Announces Fair Housing Act Charges, Settlements

By Joe Wallace

The Department of Housing and Urban Development has announced a new Fair Housing Act case in Florida, and settlements of similar cases in two other states. According to a press release at the HUD official site, ” The U.S. Department of Housing and Urban Development (HUD) announced today that it is charging landlords in South Florida with discrimination against tenants with disabilities. Meanwhile, HUD is announcing separate agreements with landlords in Nevada and Massachusetts resolving similar charges.” According to the press release HUDNo.16-169, “HUD charged the owner of Hillcrest East Building No. 22, a multifamily development in Hollywood, Florida; the properties management company, Rhodes Management; and a previous president of the homeowners association with housing discrimination for failing to make reasonable accommodations, publishing discriminatory notices and statements, and attempting to | more...

November 11, 2016

Mortgage Rate Trends: Sharply Higher Post-Election

By Joe Wallace

Mortgage loan interest rates are not tied to election results. However, investor reaction to major events that have economic implications-and the 2016 Presidential election is definitely one of those-can and often does result in changes in mortgage loan rates. We won’t speculate or editorialize on the outcome of the 2016 election, that’s beyond the scope of this report. However, in the wake of election night, we have seen markets react sharply to both the results and the aftermath. On election night alone, the Dow fell dramatically after hours, with recovery the next day. This is a common knee-jerk reaction in the marketplace under such circumstances. What’s important for borrowers to know? At the moment we are in an upward trend for mortgage loan interest rates. Investor reaction to the election | more...

November 10, 2016

FHA Condo Loans: Owner/Occupancy Requirements

By Bruce Reichstein

FHA loans include the option to fill out a loan application for condo loans. Borrowers can apply to purchase a condo unit as long as the condo project is either on the FHA approved list or is added to that list. Recently we reported on the FHA’s change in rules for occupancy requirements for approval of condo projects. According to an FHA mortgagee letter, “In accordance with the passage of the Housing Opportunity Through Modernization Act of 2016 (HOTMA), the Federal Housing Administration (FHA) is required to provide guidance on the percentage of owner occupied units required to obtain condominium project approval.” To be put on the approved FHA condo loan list, the project must meet specific requirements including an owner/occupier ratio. That ratio is addressed in that mortgagee letter | more...

November 10, 2016

FHA Good Neighbor Next Door Loans

By Joe Wallace

A reader asks, “Im active duty military stationed overseas with 2 years left on my tour, and I’m interested in buying a home in my state or record to return to. If I take leave and occupy the house multiple times throughout the year, and have family watch it. Am I able to qualify under the FHA Good Neighbor Next Door Program? Or is that unlikely? The FHA Good Neighbor Next Door program is described on the FHA official site: “The Good Neighbor Next Door (GNND) sales incentive permits an Owner- Occupant Borrower who is a full-time law enforcement officer, teacher, firefighter, or emergency medical technician who meets HUD requirements to purchase a specifically designated HUD REO Property located in a HUD- designated revitalization area with FHA-insured financing at a | more...

How much can I borrow with an FHA refinance loan?

November 9, 2016

General Income Requirements For FHA Loans

By Joe Wallace

FHA loan rules include specific income requirements for all applicants. That can be an easy statement to misunderstand; FHA loans have no minimum or maximum income limits. Instead, the FHA loan rules state that a borrower’s debt-to-income ratio must be examined (both with and without the monthly mortgage payment factored into the equation) to see whether the borrower can realistically afford the home loan. HUD 4000.1 has the rules for income for “forward mortgages” or new home purchases, and those rules are found on page 186. It begins by defining what the FHA describes as “effective income”: “Effective Income refers to income that may be used to qualify a Borrower for a Mortgage. Effective Income must be reasonably likely to continue through at least the first three years of the | more...

November 9, 2016

FHA Loan Options: What You Should Know

By Joe Wallace

Are you thinking about purchasing a home? Or refinancing your current home loan? FHA mortgage loans and refinance loans offer a variety of options. For new purchases, an FHA mortgage loan allows qualified borrowers to purchase typical suburban homes, but also condo units, town homes, and manufactured homes. Any property that has a permanent foundation or will be affixed to a permanent foundation at closing time may be eligible for an FHA mortgage. (All homes considered for purchase with an FHA loan are subject to an appraisal and must meet basic FHA standards.) Heading 2 For new purchase loans, borrowers can choose a fixed interest rate mortgage or an adjustable rate loan. Borrowers who choose adjustable rate mortgages will be offered an introductory rate, and overall your FICO scores and | more...

November 8, 2016

Divorce and FHA Loan Applications

By Joe Wallace

FICO scores, debt-to-income ratios, and credit history aren’t the only things that can factor in when the lender is gathering data from your FHA mortgage loan application. Borrowers who are divorced may experience additional requests from the lender for paperwork or supporting documentation. We get questions about issues like these quite frequently. Here’s one recent example from the comments section: “Legally divorced in SC for close to seven years. There was no alimony, no children, and bills were split. The underwriters for an FHA re-finance are demanding a copy of the Separate Maintenance and Property agreement filed at the time of separation, a full year and a half before the divorce. I dont have a copy of it, so I have to either buy one online or miss a days | more...

November 8, 2016

HUD Adds Relief For Hurricane Matthew Victims In Virginia

By Joe Wallace

Last month, we reported on a HUD press release announcing relief for victims of Hurricane Matthew. That relief was offered in four states; North and South Carolina, Florida, and Georgia. Now, HUD has announced the same kind of relief for those who live in Virginia and are dealing with the aftermath of Hurricane Matthew. According to the HUD press release, “The U.S. Department of Housing and Urban Development announced today it will speed federal disaster assistance to the Commonwealth of Virginia and provide support to homeowners and low-income renters forced from their homes due to Hurricane Matthew.” The release adds, “President Obama issued a disaster declaration for the cities of Chesapeake, Newport News, Norfolk, and Virginia Beach. The President’s declaration allows HUD to offer foreclosure relief and other assistance to | more...