September 18, 2019

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Articles Published in: 2019

Will FHA Loans Let Me Rent Out My Home?

Will FHA Loans Let Me Rent Out My Home?

Will FHA loan rules allow you to rent out the property you purchase with an FHA mortgage? There are many who wish to buy a home to start working as a landlord, but if you wish to do this with an FHA mortgage, there are certain restrictions you will need to know before you commit. Many home loans have specific requirements; a borrower may be permitted to buy an investment property with certain kinds of home loans (not FHA) but the trade off may be higher interest rates, more restrictive terms and conditions (depending on the lender), and penalties for early payoff of the mortgage. Being a Landlord With An FHA Home Loan With an FHA home loan, you are permitted to be a landlord as long as you occupy | more...

 
HUD Brings Charges Against Three Housing Design And Construction Companies

HUD Brings Charges Against Housing Design And Construction Companies

The Department of Housing and Urban Development has announced charges against companies in New York, Pennsylvania and Georgia for alleged violations of the Fair Housing Act. We report about Fair Housing cases in this space to remind house hunters of their Fair Housing Act rights, but it’s not as common to report on a case that spans multiple companies and states the way this case does. HUD’s charge involves accusations of housing discrimination associated with the design and construction “of a 40-unit North 8 Condominium development in Brooklyn, New York, in accordance with the accessibility requirements of the Fair Housing Act”. Those named in the HUD Fair Housing Act charges include Toll Brothers, Inc.; Toll Land XIII Limited Partner; Lendlease (US) Construction LMB, Inc; Greenberg Farrow Architecture, Inc.; and 51 | more...

 
What You Should Know About FHA Home Loan Amounts

What You Should Know About FHA Home Loan Amounts

Do you know what affects your FHA home loan amount? There are factors that the borrower controls such as whether to make the minimum required down payment or pay more down up front; there are also factors that are in the lender wheelhouse such as the amount of the origination fee and other closing costs. Not all of these factors automatically result in a different home loan amount. Some may be required to be paid up front in cash, others may permit financing in whole but not in part. Still, other expenses may not be required of all transactions but may apply to yours. You may find that in some housing markets, a charge or expense that is reasonable and customary may not be common in other housing markets. Some | more...

 
Why You Can't Buy An Airbnb With An FHA Mortgage

Why You Can’t Buy An Airbnb With An FHA Mortgage

Some borrowers read our previous blog posts on what you can and cannot purchase with an FHA home loan and want to know why you can’t buy an Airbnb with an FHA mortgage. FHA loan rules in HUD 4000.1 state clearly that FHA Single-Family Mortgages are intended for primary residences and that any non-residential use of the home must be “subordinate to” the residential nature of the property. HUD 4000.1 also includes instructions to the lender about other acceptable uses of the property including various prohibitions including whether or not you can rent unused portions of your home out to other people after buying it with the FHA loan. For those who are interested in renting to another person as a long-term resident, this is NOT a problem. FHA loan | more...

 
Homes You Can And Cannot Buy With An FHA Mortgage

Homes You Can And Cannot Buy With An FHA Mortgage

What kinds of homes can you purchase using an FHA mortgage loan? It does not matter whether you are a first-time home buyer or an experienced borrower, the FHA mortgage option (as well as FHA refinance loan options) are open to any financially-qualified borrower. Homes You Can Buy With An FHA Home Loan: Condominiums The FHA condo loan program was revised in 2019 to include the approval of qualifying individual condo units in projects not on the FHA approved list. That means that it is easier to find a purchase a condo unit with an FHA mortgage. Some believe condos to be closer to the luxury side of real estate buying, but condo units are popular, especially in larger metropolitan areas. The FHA loan program allows borrowers to purchase condo | more...

 
FHA Loans In Special Flood Hazard Areas

FHA Mortgages In Special Flood Hazard Areas

The FHA lender’s handbook, HUD 4000.1, has instructions for the lender to make sure properties to be purchased with an FHA mortgage aren’t located in certain zones. The lender is also tasked with insuring that if the home is located within certain flood hazard areas that the appropriate hazard insurance is obtained as a condition of loan approval. One such zone is the Special Flood Hazard Area or SFHA. HUD 4000.1 instructs the lender to insure that a home is located in an SFHA as declared by FEMA. “The Mortgagee must obtain flood zone determination services, independent of any assessment made by the Appraiser to cover the Life of the Loan Flood Certification” where applicable. But in general, there are some areas where an FHA mortgage simply is not possible | more...

 
FHA Refinance Loan Options Millenials Should Know

FHA Refinance Loan Options Millenials Should Know

Should millennials explore their refinance options right now? Some finance and mortgage publications seem to think so, and recent headlines indicate that many are taking advantage of recent lower mortgage loan interest rates to explore their refi options. Some note that in recent times, some millennials have overlooked FHA refinance loans; one source indicates that FHA refinance applications dropped some nine percent during July 2019 among millennials; some blame that in part on a communication breakdown between lender and borrower where FHA loan benefits are concerned. What FHA refinance options should you know about before choosing the right kind of loan for you? FHA loans can be used to refinance conventional, VA, USDA, and other non-FHA mortgages. You can refinance an existing FHA mortgage with cash-out refinancing to convert the | more...

 
FHA Condo Loan Rule Changes

FHA Condo Loan Rule Changes

The FHA and HUD announced changes to FHA condo loan approval policy in August of 2019, opening the program up to condo loans in condominium projects that have not been added to the FHA approved list. A Final Rule detailing the program changes was published, but in the interim between revising the FHA Single-Family Home Loan program handbook, HUD 4000.1, the FHA and HUD have published rules to manage the new rules. According to an FHA mortgagee letter published on the FHA official site, “FHA systems will be enhanced in the future to permit the issuance of case numbers in unapproved projects” basically from the time the final rule became effective (mid-August 2019) until the FHA and HUD rules and systems are fully updated with the new changes. What is | more...

 
HUD Releases Housing Reform Recommendations

HUD Announces Housing Reform Recommendations

The Department of Housing and Urban Development has issued recommendations to the President for housing reform, including attention on down payment assistance programs and cash-out refinancing. According to a press release issued on the HUD official site, this is NOT the same housing finance reform plan, which was developed by the U.S. Treasury Department. There are major differences between the two in some respects including the HUD language discussing the need to focus on “the core mission” of the FHA where home loans are concerned. It’s the view of the Treasury Department (as stated in the plan) that any changes to the core of what has traditionally been considered an FHA loan program could be detrimental. The Treasury Department plan states, “…any proposal to fundamentally change the housing finance system | more...

 
How to Get A Loan Estimate

How To Get A Loan Estimate

Have you found a house you want to buy with an FHA mortgage loan? If you don’t know how to request a home loan estimate, there are plenty of resources for you to learn. A home loan estimate can help you compare lenders and decide which is the right one for you. It may include a breakdown of closing costs, interest rates, and the monthly payment and is generally helpful for borrowers trying to decide how much loan to apply for, how much down payment to make, etc. It’s never good to simply apply for the loan with the first mortgage lender you find; consumer watchdog agencies like the Consumer Financial Protection Bureau (CFBP) advise borrowers to identify several participating lenders and request loan estimates from all of them. “Contact | more...