Articles Published in: April 2022

April 14, 2022

Are FHA Credit Requirements For Refinancing The Same As Buying A Home?

Are FHA credit requirements the same for refinance loans as they are for buying a new home? Many borrowers want to know if their credit scores, payment history, and other factors will be scrutinized as closely when refinancing. FHA loan rules for refinances vary depending on the nature of the new loan. The rules that govern this area are found in HUD 4000.1, the FHA Single-Family Loan handbook, and lender standards may also apply. The credit requirements we’re discussing here are FHA loan minimum standards. To know what a specific financial institution may require above and beyond these standards, you will need to talk to a participating FHA lender.FHA Loan Credit Check Requirements For Cash-Out Refinance Loans FHA loan rules in HUD 4000.1 state that cash-out and the no cash-out | more...

April 13, 2022

Paying Your FHA Loan Off Early

By Joe Wallace

Some of the big differences between an FHA mortgage and conventional loans involve more forgiving credit qualifying requirements, as well as a lower down payment. There is also an FHA loan rule that requires that the borrower have the ability to freely sell or transfer the property in any way he or she sees fit once the mortgage loan has closed and the borrower has started using the home as their primary residence. But there’s another important difference between some conventional mortgages and FHA loans. Did you know that under the FHA loan program you cannot be penalized or charged for early payoff of the loan? In years past, this guidance was found in HUD 4155.2 Chapter Three, which had a section describing what the FHA terms, “prepayment”. And while | more...

April 12, 2022

5 things to know about FHA Appraisals

By Joe Wallace

What do you need to know about FHA appraisals? There are plenty of details to be concerned with depending on the nature of the property you want to buy but some issues loom larger than others. FHA Appraisals Are Not Home Inspections That’s an obvious one. The FHA appraisal is meant as a tool for the lender and not the borrower. What’s not so obvious? The appraisal process does not require the appraiser to be an expert in all systems of the home. That means your roof may have problems the appraiser can’t identify, or the HVAC system might be experiencing symptoms unfamiliar to your appraiser. In some cases, the appraiser might not even set foot inside a building to be appraised. It’s not so hard to understand why you | more...

April 11, 2022

What Hurts Your Credit Ahead Of A Home Loan

By Joe Wallace

Do you know why your credit score could drop ahead of a home loan application? If you are worried about your ability to qualify for the lowest down payment for a home loan with your FICO scores, it’s smart to know what can hurt your credit while you are in the planning stages of your FHA mortgage. There are three basic things that could affect your credit scores before you apply for a home loan. These issues are not the only ones, but they are some of the most common. You should anticipate these problems while you are planning and saving for your FHA home loan and take steps to ensure they do not become an issue. The first area to watch that potentially affects your credit scores? Your payment | more...

April 8, 2022

Fair Housing Month: HUD Pledges More Funds To Fight COVID-19 Discrimination

By Joe Wallace

April is Fair Housing Month, and it’s likely no coincidence that April is also the month HUD announced added funds from the American Rescue Plan to fund HUD Fair Housing actions to fight discrimination related to COVID-19. In a press release issued by the HUD official site, the agency announced an additional $3,285,353 in funding meant for organizations that qualify and can accept funding through the FHIP’s Private Enforcement Initiative. These added funds can be used for enforcement, awareness-raising, education, and outreach projects. This is the third time American Rescue Plan funds have been used to fight housing discrimination related to the Coronavirus pandemic. According to HUD, some $16 million has been distributed to more than sixty agencies working to fight this particular type of housing discrimination. “The COVID-19 pandemic | more...

April 7, 2022

What Do FHA Loan Closing Costs Include?

By Bruce Reichstein

What do FHA loan closing costs include? There are certain fees and expenses you will need to save up for during the planning stages of your FHA home loan. They include an up-front mortgage insurance premium, home inspection, appraisal fees, and other costs that add up and you may encounter unexpected costs like a compliance inspection that would come on the heels of the appraisal where repairs or corrections are required. They are not required in all home loan cases (only when deemed necessary as a result of the appraisal), so it’s not an expense you will definitely have to pay. Remember that the less you have included in the loan amount (certain permitted closing costs may be added to the loan) the lower your mortgage payments potentially are. Closing | more...

April 6, 2022

Your First Home: Buying With An FHA Mortgage

By Joe Wallace

Buying your first home with an FHA mortgage is a good option if you want to save money on down payment expenses up front, if you want a loan with no early payoff penalty, and you want one that allows you to purchase a brand new home, a fixer-upper, or build one from the ground up on your own lot. What do you need to know about FHA loans as a first-time homebuyer? Down Payments Are Low FHA mortgages have a minimum down payment requirement of 3.5%. You are also required to pay for mortgage insurance, but the Up-Front Mortgage Insurance Premium (UFMIP) can be financed into the loan amount if you need to save money up front on the loan. Think About Where Your Down Payment Might Come From | more...

April 4, 2022

Need An FHA Refinance Loan?

By Joe Wallace

What do you need to know about FHA refinance loans? If you are considering your options and aren’t sure about some aspects of the FHA refinance process, you may find some answers to your questions below. FHA Refinance Loan FICO Score Requirements FHA refinance loans typically require credit checks and appraisals. There is one exception. There is no FHA requirement for either when you are applying for an FHA Streamline Refinance mortgage. If you need to refinance but worry about your ability to qualify for an FHA mortgage due to credit issues or other problems? Contact the FHA directly at 1-800 CALL FHA. Request a referral to a local, HUD-approved housing counselor who can assist you with planning, budgeting, and other important credit application issues ahead of any purchase or | more...

April 1, 2022

HUD Celebrates Fair Housing Month

By Joe Wallace

The Department of Housing and Urban Development observes Fair Housing Month in April each year. Fair Housing Month always features a theme. In 2022 that theme is Fair Housing: More Than Just Words. It’s meant to raise awareness of the federal government’s commitment to ensuring fair housing opportunities are available to all who want them. In a press release discussing Fair Housing Month, HUD notes that equal opportunity for housing isn’t simply about finding a place to live without unnecessary barriers to entry. “(W)here we live impacts nearly every part of our lives,” according to HUD Secretary Marcia L. Fudge, who is quoted in the press release. She adds, “Fair Housing Month is a time to recommit to our mission to promote fairness, inclusion, and justice in housing. This month | more...