January 20, 2018

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Articles by: Bruce Reichstein

Bruce Reichstein - Staff Writer

By Bruce Reichstein

January 19, 2018

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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How to use an FHA home loan

How To Use An FHA Home Loan

Do you need to know how to use an FHA home loan? There are many things you can do with an FHA mortgage, or an FHA refinance loan. Some of your options include buying a home with more than one living unit, refinancing an existing loan to do rehab or repair work, and including energy-efficient upgrades into your new mortgage. Use An FHA Home Loan To Buy Your First Home FHA home loans are not specifically targeted at one type of buyer, but first time home buyers enjoy the lower down payment requirements and more lenient FHA credit requirements. First time home buyers may learn early that the FHA home loan program isn’t strictly for first homes, but that the participating lender has some kind of first-time buyer incentive. This | more...

FHA-to-FHA Refinance Loan Rules

FHA-To-FHA Refinance Loan Rules

Do you know the loan rules for FHA-to-FHA refinance loans? There are many reasons why a borrower with an existing FHA mortgage could need or want to refinance. Some are interested in taking a portion of their home’ s equity in cash, others want lower monthly payments. Let’s examine the rules of FHA-to-FHA refinance transactions. How the FHA Defines Refinancing The rules governing FHA-to-FHA refinancing are found in a section of HUD 4000.1, the FHA loan handbook. It defines FHA refinance loans as follows: “A Refinance Transaction is used to pay off the existing debt or to withdraw equity from the Property with the proceeds of a new Mortgage for a Borrower with legal title to the subject Property.” There are a variety of FHA loan options when you are | more...

Who can apply for an FHA mortgage?

Who Can Apply For An FHA Mortgage?

Who can apply for an FHA mortgage? The answers may surprise you; there are misconceptions about FHA home loans that many have to this day, including who is eligible to apply and when. Do you know if you are eligible to apply for an FHA loan or refinance loan? FHA Home Loans Are For All Income Brackets There is no such thing as earning too much money to qualify for an FHA home loan. Some mistakenly believe that there is a maximum income for FHA home loans that excludes people who “earn too much”. This is not true. There is no maximum income limit for an FHA home loan. You will be required to furnish bank statements, pay stubs (electronic or otherwise), and tax documentation to establish your income, but | more...

Are FHA Refinance Loans Only For FHA Mortgages?

Are FHA Refinance Loans Only For FHA Mortgages?

Are FHA refinance loans only used to refinance existing FHA mortgages? The answer might surprise you, and we should begin by dispelling a long-time myth about FHA home loans and FHA refinance loans in the process. FHA Refinance Loans Are Open To All Financially Qualified Borrowers FHA loans have no income limit, and are not specifically targeted at one type of borrower. There is an impression that only first-time borrowers or first-time refinance loan applicants will be considered for FHA loan approval, but this is NOT TRUE. FHA loans require a minimum FICO score, have no income minimum or maximum, and have more generally lenient application requirements than many conventional mortgages. You cannot earn “too much” to be considered for an FHA mortgage. Your income is measured against your monthly | more...

Can Disaster Relief Grants Be Used As Money To Close An FHA Loan?

Can Disaster Relief Grants Be Used As Money To Close An FHA Loan?

Can disaster relief grants be used as money to close an FHA mortgage loan? In the wake of the many natural disasters in 2017, many home owners in Texas, California, Puerto Rico, and other affected areas want to know what their options are to recover, rehab, repair, or replace their homes. FHA loan rules require the lender to verify the source of all funds used as a down payment on FHA mortgage loans; down payment money (also known as a Minimum Required Investment or MRI) cannot come from unsecured loans, gifts with an expectation of repayment, or other unapproved sources. The FHA loan handbook, HUD 4000.1, have rules for down payments that are sourced in whole or in part by disaster relief grants. But what does the FHA consider to | more...

Does The Age Of The Property Affect An FHA Home Loan?

Does The Age Of The Property Affect An FHA Home Loan?

Does the age of the property affect an FHA mortgage loan transaction? Not all properties are brand new, and in cases where existing construction homes or other property types are being considered for an FHA home loan, age can and often is a factor. Why is this? It depends on the type of home you wish to buy. FHA Home Loans For Mobile Homes, Manufactured Homes FHA home loan rules for mobile homes and manufactured homes carry a requirement that the property be of a certain maximum age. According to HUD 4000.1, the lender is tasked with insuring that the mobile home was built on or after June 15, 1976, “as evidenced by an affixed HUD Certification Label in accordance with 24 CFR § 3280.11”. The rules in this section | more...

Is U.S. Citizenship Required For An FHA Home Loan?

Is U.S. Citizenship Required For An FHA Home Loan?

Is United States citizenship a requirement to be considered for an FHA mortgage? The answer may surprise you, but the FHA loan program is designed for a certain amount of flexibility, and the rules in this area are no exception. The rules governing this issue can be found in HUD 4000.1, the FHA loan handbook, which instructs the lender to request specific documentation including a potential borrower’s Social Security Number. According to page 131 of the handbook, “Each Borrower must provide evidence of their valid SSN to the Mortgagee.” FHA Loan Rules For Citizenship And Home Loan Approval According to HUD 4000.1, citizenship is not a prerequisite for FHA mortgage loan approval. However, borrowers will have to provide paperwork showing their status as either resident aliens or non-resident aliens. FHA | more...

How Much Can I Borrow With An FHA Mortgage In 2018?

How Much Can I Borrow With An FHA Mortgage In 2018?

How much can I borrow with an FHA mortgage in 2018? There’s no single answer to this question for a variety of reasons, but in general there are things you should know about an FHA mortgage that can help you understand how much you are able to borrow to buy a home. FHA Loan Limits Are Set By County FHA loan limits are broken down by county in each state. You can see a good example of this and learn what the FHA limit for your area is for the current year, but it is important to note that the dollar amounts you see are calculated before add-ons to the loan such as mortgage insurance premius, FHA Energy Efficient Mortgages, etc. In other words, your loan limit is calculated with the | more...

What Is The Interest Rate For FHA Refinance Loans?

What Do I Need To Know About Applying For An FHA Mortgage?

What do I need to know about applying for an FHA mortgage? The answers to this question can help any potential home loan applicant go into the process better prepared and ready to begin the journey toward home ownership. Preparing For An FHA Mortgage Loan Takes Time The average preparation time for an FHA loan can be up to a year or more, depending on the borrower. Why does it take so long to plan for an FHA loan? Part of the prep time involves saving up for the fees and expenses of the loan including appraisals, compliance inspection fees, and the required minimum down payment. Borrowers should expect to pay a minimum of 3.5% of the adjusted value of the home as a down payment; this is required above | more...

Can I buy a mobile home with an FHA home loan?

Can I Buy A Mobile Home With An FHA Mortgage?

Can I buy a mobile home with an FHA home loan? There are many people who need to know if it’s possible, and the good news is that FHA home loan rules do include provisions for buying mobile homes with an FHA mortgage loan. Mobile home loans are unique due to the nature of the property and FHA loan requirements include some special considerations for mobile homes that include square footage and foundation requirements. FHA Home Loans For Mobile Homes: A Few Basic Rules All FHA mortgage loans are for homes that can be legally classified as real estate. Some are fooled by the term “mobile home”, thinking that the definition includes recreational vehicles commonly called mobile homes, motor homes, etc. FHA loan rules are clear-no FHA loan can be | more...