April 23, 2018

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Articles Published in: January 2018

Switching FHA Lenders, Part 2

Is There A Smaller FHA Rehab Loan?

The FHA 203(k) rehab loan is an excellent choice for borrowers who need to repair, upgrade, or renovate an existing home. But some borrowers don’t have ambitious, large-scale work to be done and a “full” 203(k) rehab loan might not be appropriate for smaller-scale work. Is there an option for borrowers who need an FHA 203(k) rehab loan but don’t need a very large sum of money to do the work? The FHA Limited 203(k) Rehab Loan The limited FHA 203(k) allows borrowers to apply for rehab loan funds, but the loans in this case have a maximum total repair cost of $35,000 and no repair cost minimum. This type of rehab loan is an excellent choice for borrowers who want to work on the home but without fully refinancing | more...

 
FHA Rehab Loans: The Limited 203(k) Option

FHA 203(k) Rehab Loan Standards

FHA 203(k) rehab loan standards include a list of things that can be done with a 203(k) rehab loan and a list of ineligible projects. Borrowers should know ahead of time what is allowed and what is not with these FHA rehab loans. FHA Loan Rules For Renovation, Improvements, Add-Ons In general, FHA home loan programs such as the Energy Efficient Mortgage (which can be used in conjunction with an FHA 203(k) loan) and the FHA 203(k) and FHA 203(h) rehab loan feature a list of approved uses for loan proceeds. There’s a prohibition against cash back to the borrower on these transactions except where it is needed to pay for materials and labor; even then a borrower cannot “profit” from the loan. FHA loan rules require escrow accounts to | more...

 
FHA Home Loan Approval And Debt Ratios

FHA Home Loan Approval And Debt Ratios

How is FHA home loan approval affected by your debt ratio? Your credit qualifications including FICO scores and credit history are very important factors in home loan approval, but the amount of debt you carry is also a factor. Your participating FHA lender must evaluate your monthly debt versus your monthly income to determine if you can realistically afford the mortgage. How does the lender do this? The rules governing this process are found in the FHA loan handbook, HUD 4000.1. It begins by stating that the lender is required to “determine the Borrower’s monthly liabilities by reviewing all debts listed on the credit report, Uniform Residential Loan Application (URLA), and required documentation”. The lender must review all monthly financial obligations but some things may not necessarily be included in | more...

 
Who Can Legally Sign My FHA Home Loan Documents?

Who Can Legally Sign My FHA Home Loan Documents?

Who can legally sign my FHA home loan documents? That may seem like an obvious question to some, but there are circumstances where the borrower themselves may be unable to sign the paperwork to complete the loan transaction. What options do borrowers have in these situations when applying for an FHA mortgage, refinance loan, or reverse mortgage? FHA Loan Rules For Signatures: The Basics The rules covering a borrower’s legally binding signature on loan documents used to process FHA home loans can be found in HUD 4000.1, which begins by stating: “All Borrowers must sign and date the initial and final Fannie Mae Form 1003/Freddie Mac Form 65, Uniform Residential Loan Application (URLA). All Borrowers must sign and date page two of the initial form HUD-92900-A, HUD/VA Addendum to Uniform | more...

 
What You Need To Know About FHA Home Loan Appraisals

What You Need To Know About FHA Home Loan Appraisals

What you need to know about FHA home loan appraisals includes the difference between an appraisal and an inspection, and what the appraiser looks for when spotting defective conditions and why. The most important thing to know overall about an FHA home loan appraisal is that the appraisal is not a tool for the borrower to use to determine whether the house is suitable; the appraisal is a tool for the lender to establish the fair market value of the home. Do not rely on the appraisal to tell you the home is in acceptable condition, it was not designed to do this no matter how it may seem from the appraisal report. The borrower-arranged home inspection is the best way to “test drive” a home to see if it | more...

 
FHA One-Time Close Construction Loans: Down Payments and Interest Rates

FHA One-Time Close Construction Loans: Down Payments and Interest Rates

FHA One-Time Close construction loans have different requirements for down payments and interest rate issues can be more complex; many borrowers are interested in this home loan but aren’t clear on the finer points. Today we examine how down payment issues and interest rate rules apply to the FHA One-Time Close construction loan. The FHA loan handbook, HUD 4000.1 describes the One-Time Close loan, also known as an FHA construction-to-permanent mortgage, as a loan that “…combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close Construction Loan Down Payment Rules HUD 4000.1 allows for some unique down payment sources that don’t | more...

 
HUD announces aid package for Puerto Rico

HUD Announces Major Review Of Manufactured Housing Rules

The Department of Housing and Urban Development has issued a press release announcing a major review of manufactured housing rules. According to the HUD official site, the agency is in the public comment period prior to “a top-to-bottom review of its manufactured housing rules as part of a broader effort to identify regulations that may be ineffective, overly burdensome, or excessively costly given the critical need for affordable housing.” For the next 30 days, the agency says it will accept public comments “to identify existing or planned manufactured housing regulatory actions to assess their actual and potential compliance costs and whether those costs are justified against the backdrop of the nation’s shortage of affordable housing”. General changes in manufactured housing regulations may not seem to have anything to do with | more...

 
FHA Home Loan Options: Build, Buy, Or Rehab

FHA Loan Options For New Construction Homes: FHA One-Time Close Mortgages And More

FHA loan options for buying new construction homes include the FHA One-Time Close Construction Mortgage, which allows a borrower to apply once and have a single closing date for a house built from the ground up. FHA One-Time Close mortgages differ from other construction loans because this type of construction loan eliminates the two-step construction loan application process where the borrower applies once for the costs of construction, and has a closing date for that loan, then applies a second time for the mortgage on the property itself. It’s definitely an advantage to have a single application and closing date. But what are the other options to compare this type of loan to? It’s good to know what you can get from multiple options-making an informed choice to build a | more...

 
Do you know what type of FHA home loan you need?

FHA Loan Options For Buying A Home

FHA loan options for buying a home include choices on the housing type you need, the type of home loan you need, and sometimes even the circumstances of the purchase, in the case of people who are buying homes in federally declared disaster areas. Do you know what your new purchase FHA home loan options are? FHA Loans Available For Many Types Of Homes FHA home loans can be used to purchase property that will be owner-occupied residences, but the home can have as many as four living units. That means the borrower has the option to rent out unused living units if she chooses. Owner occupancy is a condition of loan approval, so you can’t use an FHA loan to purchase an investment property (one you intend to rent | more...

 
FHA Loan Approval and Late or Missed Housing Payments

FHA Loan Approval and Late or Missed Housing Payments

What is the connection between FHA loan approval and late or missed housing payments? The simplest formula given to most borrowers is that you should come to the home loan application process with nothing but on-time payments on all financial obligations for the last 12 months leading up to the day you apply. Not all borrowers take that advice, and many want to know what the consequences of having a late or missed payment might be; in some cases the issue may be more problematic than others. This is true of having late or missed housing payments on your record. The lender will review your record of housing payments as one of the indications that a borrower is a satisfactory credit risk. But what do the FHA loan rules tell | more...