Articles by: Bruce Reichstein

October 20, 2020

HUD Announces New Deadlines For Coronavirus Foreclosure Avoidance Options

Since the global coronavirus pandemic began affecting the United States economy, HUD has made a variety of policy changes and loss mitigation measures available to borrower struggling to make mortgage payments on FHA mortgages, refinance loans, and even reverse mortgages. In April, 2020, HUD published Mortgagee Letter 2020-06. That letter announced measures including COVID-19 related loan forbearance, plus “Standalone Partial Claims”, plus an extension of the deadline for FHA Reverse Mortgages (also known as FHA Home Equity Conversion Mortgages or HECM) for those affected by the pandemic. A few months later, HUD also announced loan forbearance options for those who needed it beyond the initial forbearance period. And now, the Department of Housing and Urban Development and the Federal Housing Administration have announced that the agencies recognize a need, “…to | more...

October 15, 2020

Who Is Eligible For An FHA Home Loan?

By Bruce Reichstein

Who is eligible for an FHA home loan? To begin, we must point out that FHA mortgages are not need-based loans, feature no income caps, and do not require you to be a first-time home buyer to apply. FHA mortgage eligibility rules are found in HUD 4000.1, including instructions for the lender pertaining to who is allowed to apply for an FHA single-family home loans. Who can apply for an FHA loan and what do the rules say about these applicants? Some of the rules about being eligible for an FHA mortgage have to do with the status of the buyer–does the borrower intend to be an owner-occupier or does the borrower want to purchase property they do not intend to use as the primary residence? FHA mortgage loans to | more...

October 12, 2020

Applying For Your Home Loan With Other Credit Applications Recent or Pending

By Bruce Reichstein

Here is a variation on a common question asked about applying for an FHA home loan. “I recently applied for financing for a vehicle. Do I still qualify for an FHA mortgage?” In general, borrowers should avoid opening new lines of credit ahead of a mortgage loan application. FHA mortgages, like other home loans, require the lender to justify the loan as a good credit risk. If a borrower is opening new lines of credit at or near the time the home loan application is turned in, it may make the lender think twice about approving the mortgage. One reason for this is that entering into other types of debt while applying for a home loan may give the impression (right or wrong) that the borrower isn’t disciplined with credit | more...

October 8, 2020

FHA Cash-Out Refinance Loan Questions And Answers

By Bruce Reichstein

Do you know what to expect when you want to refinance your mortgage in order to cash in on the value of your home? Are you wondering how much money will you get in cash at closing time? These and other questions are important–knowing the answers before you commit or at least knowing how to arrive at those answers is crucial before you commit to the refi loan. Here are some common questions about FHA Cash-Out Refinancing loan options you should know: Do FHA Cash-Out Refinance Loans Cost The Same In All Housing Markets? The short answer is no, and the reason for this is that all housing markets differ, lender standards differ, and your own personal needs and goals may affect the type of transaction you need. For those | more...

October 7, 2020

Getting Ready For Your Home Loan

By Bruce Reichstein

Are you considering your home loan options? FHA mortgage loans have more flexible credit requirements more consumer-friendly loan options, but even with more lenient credit guidelines (compared to some conventional mortgages) there are a number of areas to consider in the preparation stages of your loan. Some are already ahead of the curve when it comes to getting financially ready for a major loan application, others are really starting from ground zero. Do you know how ready you are to fill out that mortgage loan application? Having Enough Preparation Time Is Important It does cost money to buy a home–there are plenty of up-front costs including appraisals and the home inspection, etc. Financial experts advise taking at least a full year to save, budget, and even to research the new | more...

What You Need To Know About Your FHA Home Loan

October 2, 2020

Don’t Buy A House Without A Home Inspection

By Bruce Reichstein

Here’s a sadly common example of a home buyer question that is asked after the purchase of a house with an FHA home loan has closed, the new owners have moved in, and suddenly discover there are serious issues with the property: “I did not get a home inspection when I purchased my house and now there are problems. Do I have any recourse?” If what is meant by “recourse” involves some form of intervention or relief from the lender or the FHA, the general answer is no–you don’t have any avenues of recourse when buying a home if you choose not to pay for the optional but very important home inspection and choose to rely only on the FHA appraisal instead. An FHA appraisal is NOT a home inspection | more...

Buying A Home With An FHA Loan: What's Allowed, What's Now

October 1, 2020

Buying A Home With An FHA Loan: What’s Allowed, What’s Not

By Bruce Reichstein

FHA mortgages are great for borrowers who want a lower down payment, no early repayment penalties, and more flexible home loan approval guidelines than some conventional counterparts. But the tradeoff comes where certain kinds of property and other loan details are concerned. If you want a home as opposed to an investment, an FHA mortgage is right for you. That includes those who want to build a home from the ground up instead of buying someone else’s property. Whether you want a traditional suburban home, a mobile home, a condominium, or even a duplex or multi-family unit, there’s an FHA mortgage for those purposes. But what about those who want to buy a house they can rent out to others, or those who want a mixed-use property that can handle | more...

September 30, 2020

FHA Refinance Loans For Home Improvements

By Bruce Reichstein

FHA refinance loan options include the ability to apply for a refi loan to do home improvements–a very important option for those with existing FHA mortgages or non-FHA loans alike. How can FHA refinance loans help a borrower make upgrades or improvements? There’s more than one way to approach the refinance loan question if you want a refi AND funds to perform approved upgrades or remodeling to your house. Participating FHA lenders may offer a range of FHA loan products that can help in this area including the FHA Energy Efficient Mortgage program (EEM), and FHA Rehab loans. Most of these options will require the borrower to work more closely with the lender to determine what may be funded using FHA refinance loans, but many projects are possible. For FHA | more...

September 25, 2020

What Credit Score Is Needed For An FHA Mortgage?

By Bruce Reichstein

What is the minimum credit score required to get approved for an FHA mortgage loan? Readers ask questions about this issue all the time, sending in questions asking if it is possible to still get an FHA mortgage with a low credit score. FHA loan rules establish a minimum credit score for loan eligibility but lender standards also apply so this is a harder question to answer than you might think. What is best in these situations is to know that FHA loan rules are the baseline, the minimum. The lender’s requirements are also applicable so you will need to discuss what FICO scores qualify. In general, FHA loan rules in the FHA lender’s handbook say FHA borrowers with credit scores at 580 or higher are eligible for maximum financing | more...

September 21, 2020

Time Is Running Out On Exterior-Only FHA Appraisals

By Bruce Reichstein

In August 2020, the FHA and HUD issued an extension of their temporary exterior-only appraisal guidelines for borrowers applying for FHA mortgages and refinance loans. This measure, and others similar to it, came after the President declared a national emergency with respect to the coronavirus pandemic and, according to the FHA/HUD official site, “initiated actions to stem the threat to public health and the American economy.” On March 27, 2020, HUD published Mortgagee Letter 2020-05, authorizing “flexibilities to the re-verification of employment and Acceptable Appraisal Reporting Forms and Protocols by allowing exceptions for Exterior-Only and Desktop Appraisal inspections in certain transactions”. The original measures were issued in March of 2020 to allow FHA appraisers to perform their work on FHA mortgages without having to put themselves at risk of COVID-19 | more...