Articles by: Bruce Reichstein

Home Loans For Building On Your Own Land

November 8, 2019

FHA Loan Appraisal Requirements: Repairs

FHA loan rules require an appraisal of the property secured by the mortgage regardless of whether it’s an existing construction home or if you choose to build on your own land using a One-Time Close loan. Do you know what the home loan rules say about any required repairs or corrections? You may not expect an appraisal-directed repair from a new construction home. But if the FHA appraiser finds something that does not meet local building code, or if there was some kind of damage uncovered during the appraisal (these are just two examples of what could happen at appraisal time on a new construction home) those issues must be corrected. HUD 4000.1, the FHA Single-Family Home Loan Handbook, instructs the lender that in cases where the appraisal uncovers things | more...

November 6, 2019

HUD Announces Million Dollar Settlement With Bridgeport Housing Authority Over Disability Discrimination Claims

By Bruce Reichstein

No matter what stage you are at in the house-hunting process, discrimination has a chilling effect on your efforts to find a home. It does not matter if you are renting or buying, discrimination corrupts every stage of the housing process. That is one reason we report on Fair Housing cases here; borrowers sometimes don’t fully understand their rights or the fact that in order to prevent future discrimination tomorrow, the victims of today’s Fair Housing Act violations have to report the illegal activity to call it to the attention of HUD. This is vital in any case; in today’s action, HUD did not get the initial complaint from an outside source (which seems rare for this type of Fair Housing Act issue) but rather from a HUD compliance review | more...

FHA Home Loan Down Payment Help For Borrowers

November 1, 2019

FHA Loan Down Payment Help For Borrowers

By Bruce Reichstein

Even with the FHA loan program’s low 3.5% down payment requirement, some borrowers struggle to come up with the minimum required investment for the purchase of an existing home or construction of a new home. Fortunately, there is home loan down payment assistance available for borrowers from local agencies (the FHA itself does not provide down payment funds) and there are resources you can search to find the down payment help you need in your local area. But there are rules for down payment grants, home buyer grants, and other forms of down payment help. FHA loan rules say any down payment help must meet FHA requirements and must not be used in ways that are against the rules. For example, some well-intentioned groups may offer down payment funds to | more...

HUD Announces New Partnership To Enforce FHA Loan Rules

October 30, 2019

HUD Announces New Partnership To Enforce FHA Guidelines

By Bruce Reichstein

The Department of Housing and Urban Development has announced the signing of a Memorandum of Understanding (MOU) between the agency and the Department of Justice designed to provide guidance on pursuing disciplinary actions in cases brought against participating FHA lenders who may be in violation under the False Claims Act (FCA). “This agreement clearly outlines our FHA mortgage program requirements, so they do not impede or discourage lenders from offering affordable FHA-insured loans to credit-worthy borrowers,” according to one HUD official quoted in the agency’s press release. The United States Attorney General is also quoted in the press release adding, “”This MOU sets forth a robust and collaborative process for deciding when to pursue False Claims Act cases to remedy material and knowing FHA violations,” The agreement means HUD and | more...

October 28, 2019

Home Loans For Building On Your Own Land

By Bruce Reichstein

If you do not want to buy existing real estate or hire a realtor, and prefer to design your own home (or have one designed for you), a One-Time Close (OTC) construction loan is for you. These loans are named “One-Time Close” because unlike some construction loans that require two applications, two approvals, and two closing dates, One-Time Close mortgages have ONE loan for both the construction of the home and for the mortgage itself. These construction loans are available under several government-backed lending programs such FHA One-Time Close construction loans, VA Construction loans, and the USDA equivalent. VA and USDA loans have no down payment requirement, but VA mortgages are not for the general public (qualifying veterans, currently serving troops, and certain surviving spouses of military members who died | more...

October 24, 2019

The FHA Loan That Helps You Build On Your Own Lot

By Bruce Reichstein

The FHA One-Time Close construction loan FHA One-Time Close Loan is a mortgage that lets the borrower design and build a home on the borrower’s own land. If you would rather build a home rather than look at real estate listings for an existing construction house, the One-Time Close loan is for you. There is an FHA version of the One-Time Close construction mortgage that requires a low 3.5% down payment. There is also a version of this construction loan offered by the VA to qualifying veterans and currently serving military members. The VA One-time Close construction loan has a 0% down / zero-down option. No money down is required for a VA construction loan up to the VA loan limit. See the end of this article for more information | more...

October 22, 2019

FHA Disaster Relief Changes

By Bruce Reichstein

In August of 2019, the FHA and HUD issued press releases and Mortgagee Letters describing changes to the FHA loss mitigation guidelines for those recovering from natural disasters in federally-declared natural disaster areas. The FHA states that the new rules affect homeowners who live or work in a “Presidentially-Declared Major Disaster Areas (PDMDAs) of Hurricanes Harvey, Irma and Maria or certain California Wildfires, Flooding, Mudflows, and Debris Flows” according to the HUD official site. Certain temporary measures the FHA and HUD passed in recent times to help improve disaster recovery in these areas are now made permanent. There are some features that have been added that streamline the application process for FHA loan relief, forbearance, and other measures. According to the HUD official site, lenders can use a recent bank | more...

October 18, 2019

FHA Loans For Buying, Building, Or Assembling A Home

By Bruce Reichstein

Did you know that FHA home loans can help you buy an existing home as a first-time home buyer, but can also help a first-timer or experienced homeowner have a house built for them from the ground up on your own lot or a lot you purchase in connection with the mortgage. It’s also possible to have a manufactured home assembled for you on a lot you purchase or already own. These loans, especially the FHA One-Time Close mortgage for building a home from the ground up, are offered to both experienced borrowers and first time home buyers alike with no difference in the basic terms and conditions. That means that a first-time borrower is not penalized for being a first-timer; there are no elevated down payment requirements, no added | more...

Build on your own land FHA One Time Close Construction Loan

October 16, 2019

Build On Your Own Land: The FHA One-Time Close Construction Loan

By Bruce Reichstein

The FHA One-Time Close construction loan allows a borrower to build a home from the ground up, including loan applicants who want to build on their own land with an FHA construction loan. What do borrowers need to know about the FHA One-Time Close loan? To begin, this type of FHA home loan is available to all qualified borrowers who want to build approved properties; the first-time home buyer is just as welcome to apply for an FHA construction loan as an experienced borrower. For this type of loan, the time you would spend house hunting will be spent contracting with a builder (who must be a licensed general contractor), working with floor plans, and planning the construction of the home rather than going out to search for an existing | more...

October 14, 2019

Happy Columbus Day 2019

By Bruce Reichstein

Today we pause from our posts about FHA home loans, FHA refinance loans, and related topics, to enjoy the three day weekend some observe as Indigenous Peoples’ Day, traditionally observed in the United States as Columbus Day. We’ll return to our usual posting schedule tomorrow (Tuesday October 14, 2019) but in the meantime, if you too are celebrating a three-day weekend, have a safe and pleasant one and thank you for reading!