December 14, 2017

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Articles in Category: FHA Guidelines

FHA Loans And Surplus Land

FHA Loans And Surplus Land

What do FHA loan rules say about surplus and/or excess land? It’s not an issue for someone who wants to buy a condo unit, but for those looking for homes in rural areas, excess or surplus land could be an important detail at appraisal time. FHA loan rules in HUD 4000.1 discuss appraisals where there may be surplus land or excess land involved, and while the section referencing this issue is short, it does give us an idea of what to expect in these cases; a big question addressed in FHA loan rules here is how the excess or surplus land affects the valuation of the property. What Is The FHA Definition Of Surplus or Excess Land? HUD 4000.1 states, “Excess Land refers to land that is not needed to | more...

 
How FHA Maximum Mortgage Amounts Are Calculated

How FHA Maximum Mortgage Amounts Are Calculated

Have you ever wondered how FHA maximum mortgage amounts are calculated? FHA loan rules in HUD 4000.1 explain how it works, starting with a borrower’s required minimum down payment and including what happens when certain add-ons to the loan are included. How much can you really borrow with an FHA mortgage? According to HUD 4000.1, the FHA loan handbook, “Mortgage limits are calculated based on the median house prices in accordance with the statute. FHA’s Single Family mortgage limits are set by Metropolitan Statistical Area and county and will be published periodically.” Those limits are published just before the start of the new year and take effect the first day of the new year. But the amount of your FHA home loan may include more than just the calculation mentioned | more...

 
What Are The FHA Appraisal Rules For Mobile Homes?

What Are The FHA Appraisal Rules For Mobile Homes?

What are the FHA appraisal rules for mobile homes? FHA mortgages are available for mobile, manufactured, and modular homes the same as for “stick built” housing such as a typical suburban home. What are the basic appraisal requirements for mobile homes? FHA loan rules for appraisals are found in HUD 4000.1, the FHA loan handbook. There we learn that mobile homes have some unique appraisal requirements. Like condo loans, there are extra rules due to the unique nature of mobile homes. FHA Mobile Home Minimum Size Requirement For example, in HUD 4000.1, we find no minimum square footage requirement for a stick-built home or a condo. But for mobile homes, FHA appraisal requirements include a minimum 400 square feet of floor space. Anything less does not meet the FHA loan | more...

 
What are the property requirements for an FHA home loan?

What Are The Property Requirements For An FHA Home Loan?

What are the property requirements for an FHA home loan? There are some basic minimum standards listed in HUD 4000.1 that can help future FHA loan applicants understand the basics, but it’s important to remember that local building code, health standards for water and sewage, and other regulations may also apply. General FHA Loan Requirements For Homes To Be Purchased With An FHA Mortgage HUD 4000.1 states that it is the lender’s responsibility to make sure “each living unit” has the following features as required in HUD 4000.1: -a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses; -sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, | more...

 
What Are The FHA Loan Rules For Occupancy?

What Are The FHA Loan Rules For Occupancy?

What are the FHA loan rules for occupancy? This is a question many borrowers are curious about, especially those who are interested in becoming landlords and earning rental income from their property. Does the FHA single family home loan program allow a borrower to rent out the property purchased with an FHA mortgage? FHA Loans Are Specifically For Owner/Occupiers HUD 4000.1, the FHA loan handbook, states clearly that at least one person obligated on the FHA mortgage is required to use the property as their primary residence: “At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year.” Furthermore, the FHA clearly defines what it considers to be a “principal residence”. On page 140 of | more...

 
Late or Missed Payments and FHA Loan Applications

What Should I Know About FHA Loan Requirements?

What should I know about FHA loan requirements? The first thing to keep in mind is that no single factor determines your ability to borrow. Your FICO score is an important part of the loan approval process, but it’s not the only thing you will need to pay attention to in the 12 months leading up to your loan application. FHA Loan Approval Requirements FHA loan standards include a review of your FICO scores to determine whether you are eligible for maximum financing with a 3.5% minimum down payment. Those with FICO scores at 580 or higher are technically eligible for maximum financing. However, this is the FHA loan program minimum standard and your lender may have higher FICO score requirements. FICO scores affect your down payment, interest rate offerings, | more...

 
FHA Loan Rules For Loan Approval: Federal Debts and Tax Liens

Do The Same FHA Loan Requirements Apply to All Borrowers?

Do the same FHA loan requirements apply to all borrowers? This is a complex question, and the answer depends greatly on whether credit issues are being discussed or whether general requirements for loan approval outside FICO scores are the topic. What’s the difference? Basically, FHA loan rules apply for all borrowers when it comes to the basic minimum requirements, standards, and verification processes for a certain type of mortgage. If you apply for a new purchase mortgage, those basic requirements will affect your transaction. But the basic requirements for an FHA reverse mortgage are not the same as those for a new purchase loan and so there are different standards for that type of loan including an age requirement. FHA reverse mortgages are only for qualified borrowers age 62 or | more...

 
FHA One-Time Close Construction Loans: Utilities

FHA One-Time Close Construction Loan Rules: Utilities

FHA loan rules for One-Time Close construction loans include a set of requirements the finished property, which must meet both state/local building code and FHA loan minimum property standards. Those FHA standards include a set of requirements for access, utilities, and water quality which must be met as a condition of loan approval. It’s surprising to some FHA loan applicants that certain features of a new construction home are A) regulated and/or B) allow things like septic tanks or wells. But not all properties are the same, and some construction issues are present in some housing markets that aren’t a consideration elsewhere. Well water is a great example. When a resident of a large metropolitan areas thinks of a new construction home, it’s likely that issues surrounding wells and well | more...

 
FHA One-Time Close Requirements: Appraisals

Does The FHA Have An Inspection Checklist?

Does FHA have an inspection checklist? The question is a popular one, but it reveals a common misconception about the nature of FHA appraisals. It is one that’s extremely important to clarify-the FHA appraisal is NOT a home inspection and shouldn’t be considered one. The FHA Appraisal Is A Tool For The Lender, Not The Borrower In spite of the fact that an FHA appraiser is required to insure the property to be purchased with an FHA home loan meets minimum standards, the real usefulness of the appraisal is NOT for the borrower. The lender uses the appraisal to determine the fair market value of the home and that purpose should be considered its’ primary end result. That means the FHA appraisal is NOT a stamp of FHA approval, or | more...

 
What Is The Difference Between New Construction And Existing Construction?

Why Do People Prefer FHA loans? Part Two

Why do people prefer FHA loans? That’s a question we’ve been examining recently. In a recent blog post we discussed FHA loan down payments, credit requirements, and related issues-all reasons people might turn to an FHA mortgage instead of a different kind of home loan. But there are other reasons to think about FHA mortgages, reasons that aren’t as as top-of-mind as what kind of down payment you might need. Consider the consumer protections and benefits built in to FHA mortgages that make these loans attractive. FHA Loans Permit Early Payoff Of The Mortgage Without Penalty The FHA lender handbook, HUD 4000.1, states that the borrower cannot be penalized for early payoff of the mortgage. In a section covering pre-payment of FHA loans, “pre-payment” is defined as follows: “A Partial | more...