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Articles in Category: FHA Loan Types

FHA loans

A Look At FHA Rehab Loans For Beginners

If you want to save money on purchasing a home, buying one that requires improvements or renovations can be a wise financial decision.  FHA Rehab loans can help whether you want a fixer-upper property that’s new to you, or you want to remodel your existing home. These government-backed mortgages, or 203(k) Rehabilitation loans, combine the home purchase cost and renovation expenses into a single mortgage. This program lets you buy a house that would not otherwise pass the appraisal process. The FHA offers two primary types of Rehab loans to cater to different project scales. The Standard 203(k) option suits major rehabilitation projects typically requiring structural repairs, additions, or extensive remodeling.  The minimum repair cost for this option is $5,000, and a licensed contractor must complete the work. There is | more...

 

Is There A Time Limit On FHA Loan Applications?

When FHA loan applicants work on getting a mortgage and closing the deal, sometimes things don’t always go as smoothly or as quickly as planned. In cases where there is a delay for some reason, do FHA loan rules include built-in time limits on how long a borrower and seller can go between loan approval and closing? While a casual glance at the FHA loan rules may not turn up a specific rule that says “FHA loans must be closed in X number of days,” there are several requirements that add up to the need to get an FHA loan accomplished in a timely manner. One is the length of your interest rate lock-in period. Once it expires, you and the lender may need to renegotiate the rate, so it’s | more...

 
Getting Ready For Your Home Loan

Qualifying For FHA Loans and VA Mortgages

When applying for a government-backed home loan like a VA or FHA mortgage, it’s important to know how your credit issues may affect your ability to be approved for a residential mortgage loan. Knowing which potential credit problems you may need to correct (as early in your house-hunting journey as you can) can greatly benefit you before loan application time. Some borrowers don’t believe they have credit issues. However, they sometimes change their minds after reviewing credit reports due to errors, items that should have fallen off the report ages ago, and evidence of identity theft. Credit problems such as undischarged bankruptcy, a recent foreclosure, or delinquency on federal debts might hurt your chances of securing an FHA or VA-backed mortgage. To be approved for a mortgage, expect to spend | more...

 
FHA/HUD

HUD Proposes Final Rule on Sale of Delinquent FHA Mortgages

The U.S. Department of Housing and Urban Development (HUD) has proposed a new rule to oversee the sale of delinquent single-family mortgage loans insured by the Federal Housing Administration (FHA). This initiative aims to increase the availability of affordable housing and enhance community stability. According to HUD.giv, this move is part of the Biden-Harris Administration’s commitment to “expanding affordable housing options,” and the proposed rule is intended to assist struggling homeowners. Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon was quoted in a HUD press release about the proposed rule. Gordon notes the proposed rule is meant to create stability. It establishes standardized regulations for future delinquent home loan sales and prioritizes neighborhood stabilization. HUD has been experimenting with selling off delinquent mortgages since 2002. The July 2024 | more...

 
FHA Mortgage

FHA Loans: What To Do After Closing Day

Buying your home with an FHA mortgage involves finding the right lender, making a down payment, saving for and paying closing costs, and taking the keys to your new home on closing day. However, it’s crucial to anticipate potential challenges that may arise after moving in. Did You Get A Home Inspection And An Appraisal? It’s highly recommended that you get a home inspection as a standard part of buying a house. Making the purchase contingent on the inspection and appraisal outcomes can offer protection that you won’t realize until long after closing the loan.  While an FHA mortgage safeguards against lower appraised values through an “escape clause” for situations where the house appraises lower than the asking price, adding a contingency clause for inspection issues is wise. Inspectors might | more...

 
FHA loans

Do You Need Help Understanding Your FHA Loan?

The variety of FHA home loan programs, including construction loans and reverse mortgages, can be overwhelming for many borrowers. HUD-approved housing counseling offers invaluable support to help borrowers make informed decisions about these complex programs. You can get a free referral to a HUD-approved housing counselor by calling 1-800-CALL FHA. FHA Loan Counseling: Your Path to Homeownership The Federal Housing Administration (FHA) insures mortgages, reducing lender risk and expanding access to homeownership for individuals with lower credit scores or limited down payment funds. However, understanding the nuances of certain FHA loans, such as reverse mortgages and construction loans, can be challenging.  Did you know you can call HUD to get a referral to an approved housing counselor to help you through the process? Housing counselors can help you in the | more...

 
FHA mortgages and refinance loans

FHA 203(k) Rehab Loan Program Updates

Changes are coming for those interested in remodeling a home with an FHA rehab loan. The Department of Housing and Urban Development, along with the Federal Housing Administration, have updated policies associated with the FHA 203(k) Rehabilitation Mortgage Insurance Program. These changes were implemented to modernize the program and make it a more helpful tool for individuals and families seeking affordable financing options for home renovation or rehabilitation projects. The FHA 203(k) program offers two loan variations: a “standard” 203(k) for major remodeling projects that may or may not include work on load-bearing walls. A “limited” 203(k) is available for smaller projects and for what the FHA determines to be “non-structural repairs.” Several fundamental changes have been made to aspects of the FHA 203(k) program. First, the total rehabilitation costs | more...

 
FHA Mortgage Loan

FHA Appraisals: When Are They Required?

When is an FHA appraisal required? For any FHA purchase loan, you will be expected to pay for an FHA appraisal, even if it is an after-improvements approach for renovation refinance loans or similar options. We examine the other situations where an assessment may be needed below. FHA Streamline Refinance An FHA streamline refinance loan does not require an FHA appraisal. These refinance options are meant to provide a tangible benefit to the borrower through a lower monthly payment, a better interest rate, or switching to a fixed-rate loan from an adjustable-rate mortgage. Your participating lender may require an appraisal, which is permitted under FHA loan rules. However, no FHA requirements for appraisals exist for streamline refi loans in typical cases. FHA Reverse Mortgage Refinances FHA reverse mortgages, also known | more...

 
FHA Home Loan

Planning Your First Home

Are you looking for your first home? Applying for an FHA loan might seem intimidating, but there are some things you can do to help reduce those feelings of being overwhelmed by unfamiliar details. This is especially true in an age of confusing information about changing interest rates, modified credit qualifying standards, and options to save your home if disaster strikes. Start Early The key is to start early and plan ahead. Before you fill out loan application paperwork, consider making your planning phase for the loan last a year or more. This takes some immediate pressure off borrowers to save up for the down payment and closing costs. It also provides adequate time to work on your credit and cut your monthly debt. What other things can first-time home | more...

 
Getting Ready For Your Home Loan

Comparing Home Loan Offers

Are you planning to buy a new home? You can find the right home loan by applying a similar process you use to find the right house.  In fact, shopping around for the right mortgage loan is just as important as shopping around for the right house. If you are considering an FHA mortgage to buy, renovate, or build a home, you’ll want to make the same kind of informed decisions about the lender and the loan.  Comparing lenders and loans is the way to do that. But there are some tips you can follow to make that process more streamlined. Research Multiple FHA Lenders While on paper, FHA loan terms and conditions such as FICO score requirements seem to be standardized, the FHA minimum FICO score requirements are just | more...