December 14, 2017

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Articles in Category: Loan Limits

FHA Loan Limits For 2018

Higher FHA Loan Limits For 2018

The FHA has announced FHA loan limits for 2018, and the new numbers mean good news for those looking to buy a home in the new year. The “national conforming loan limit” for 2018 is set at $453,100, up from last year’s limit of $424,100 (see below). The higher limit means more potential borrowing power for qualified FHA loan applicants. According to the announcement on the FHA official site, there are higher limits for 2018. The Federal Housing Administration calculates “forward mortgage limits based on the median house prices in accordance with the National Housing Act. FHA’s Single Family forward mortgage limits are set by Metropolitan Statistical Area (MSA) and county and are published periodically.” The FHA sets loan limits “at or between the low cost area and high cost | more...

 
Buying land with an FHA loan.

Buying Land With An FHA Loan

There are several reasons why a house hunter looking for a home to purchase with a VA mortgage might want to buy a piece of land. In times when the housing market is favorably inclined towards new construction loans, some buyers might want a government insured loan for a proposed construction or new construction purchase; others might want to buy a piece of land for a manufactured home or mobile home.

 
Late or Missed Payments and FHA Loan Applications

Late or Missed Payments and FHA Loan Applications

Is it possible to get an FHA loan application approved with late or missed payments on your credit report? It’s easy to get caught up in a struggle with common financial problems, and some of the simplest situations (late and missed payments on financial obligations) can have the biggest impact on a borrower’s credit rating or perceptions of creditworthiness. Having a handful “lates” and/or missed payments in your recent credit history might not affect your overall financial bottom line IF you’re not planning to seek new lines of credit. But if you are planning to apply for a home loan in the 12 months following late or missed payments, this situation becomes far more important. FHA loan applications, like other major lines of credit, are affected by anything that changes | more...

 
FHA Loans And Surplus Land

What Are The FHA Loan Rules For Maximum Loan Amounts?

What are the FHA loan rules for maximum loan amounts? It’s an important question many borrowers need to know when looking for homes; knowing how much you can borrow is an important factor in budgeting and planning for your FHA loan. FHA Loan Maximum Mortgage Amounts Defined HUD 4000.1, the FHA loan handbook, describes FHA loan maximum mortgage amounts as follows: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction.” For most FHA loans, the maximum mortgage an applicant is eligible for involves “the lesser of the Nationwide Mortgage Limit | more...

 
Do FHA home loan limits change?

Do FHA Home Loan Limits Change?

Do FHA home loan limits change? Borrowers who want to know what the FHA loan limits for a given housing market might be have to contend with the possibility of changing limits depending on what time of year they are house hunting. How FHA Loan Limits Work The Federal Housing Administration calculates new purchase mortgage loan limits based on “the median house prices in accordance with the National Housing Act” according to the FHA official site. “FHA’s Single Family forward mortgage limits are set by Metropolitan Statistical Area (MSA) and county and are published periodically.” FHA publishes updated home loan limits for forward mortgages and reverse mortgages on a yearly basis. The FHA official site states, “FHA sets these limits at or between the low cost area and high cost | more...

 
What Is An FHA Loan Limit?

What Is An FHA Loan Limit? Part Two

What Is An FHA Loan Limit? We’ve been exploring this question-in our previous blog post we looked at the basics of FHA loan limits. According to the FHA/HUD official site, “The maximum mortgage amount that FHA will insure on a specific purchase is calculated by multiplying the appropriate LTV percentage by the Adjusted Value. In order for FHA to insure this maximum mortgage amount, the Borrower must make a Minimum Required Investment (MRI) of at least 3.5 percent of the Adjusted Value.” FHA loan limits are set by the National Housing Act and will vary depending on the housing market. Some areas are low-cost markets, some are high-cost, and others are simply “average”. But what does that mean for the typical FHA loan applicant? The FHA loan handbook, HUD 4000.1, | more...

 
Can I buy a manufactured home with an FHA loan?

What Is An FHA Loan Limit?

What is an FHA loan limit? The answer to this question can be found in HUD 4000.1, the FHA loan handbook, which begins by explaining: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction.” Furthermore, the handbook says that for most FHA loan programs the maximum mortgage is either the Nationwide Mortgage Limit for that area or “a percentage of the Adjusted Value”. The handbook breaks down how a home’s adjusted value is calculated, according to transaction. For new purchase or “forward mortgages”, the handbook states: “For purchase transactions, the | more...

 
FHA Refinance Loans

FHA Loan Limits: Low-Cost Areas, High-Cost Areas

FHA loan limits can be puzzling to those unfamiliar with how the program works. FHA loans are calculated based upon the appraised value of the property or the sale price, whichever is lower. There are other factors that will help determine the final amount of the home loan including whether approved closing costs have been rolled into the loan, approved energy efficient upgrades, etc. But housing markets vary across the nation. What is an affordable, modest price for a house in one area won’t be enough to purchase property in a high-cost area. So how does the FHA determine what the proper loan amount should be with this factor in mind? HUD 4000.1 has the answers, listing FHA loan limits, and their requirements and loan guaranty limits for low-cost areas | more...

 

Maximum Loan Amounts For FHA Loans

What are the FHA loan rules for maximum loan amounts? The rules for loan amounts are found in the FHA single family home loan rule book, HUD 4000.1 has answers, starting with this from page 155: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction.” Borrowers sometimes wonder if they can apply for a home loan for more than the purchase price of the home. The answer to such questions depends greatly on what the extra money is to be used for. For forward mortgages and refinance loans alike, FHA | more...

 

Temporary Reduction of Income: FHA Loan Rules

What happens if a borrower fills out an FHA loan application while having a temporary reduction of income either on the record or ongoing during the application process? Does the FHA loan rule book, HUD 4000.1, address these situations? Fortunately, yes. There are many reasons why a loan applicant might experience a temporary reduction of income-short term disability, for example. Maternity leave. Temporary leaves of absence, sabbaticals, etc. According to page 206 of HUD 4000.1, FHA loan rules in this area include the following: “For Borrowers with a temporary reduction of income due to a short-term disability or similar temporary leave, the Mortgagee may consider the Borrowers current income as Effective Income, if it can verify and document that: – the Borrower intends to return to work; – the Borrower | more...