October 23, 2017

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Articles in Category: FHA Loan Basics

How many times in my life can I get an FHA loan?

How Many Times In My Life Can I Get An FHA Loan?

How many times in my life can I get an FHA loan? If you are buying your first home, this is a question you might not ask until later. But it’s a good idea to know what your options are should you need to sell your first home later and begin a new house hunt. Understanding FHA Loans Knowing that FHA home loans are intended for owner-occupiers who want to use their property as their home address and primary residence helps a lot when trying to understand FHA loan rules. If you don’t plan to use the property you want to buy as your home, you won’t be able to use an FHA single-family home loan to purchase it. There are certain exceptions for government agencies and non-profit groups, but | more...

 
What is a rate and term refinance?

What Is An FHA Rate And Term Refinance?

What is an FHA rate and term refinance? This refinance loan is different than FHA cash-out refinancing or reverse mortgages. The rules that cover FHA rate and term refinancing are found in the FHA loan handbook, HUD 4000.1, and explains how this type of mortgage differs from the rest. What Are FHA Rate And Term Refinance Loans? HUD 4000.1 defines an FHA rate and term refinance loan as follows: “Rate and Term refers to a no cash-out refinance of any Mortgage in which all proceeds are used to pay existing mortgage liens on the subject Property and costs associated with the transaction.” Who Is Eligible To Apply For An FHA Rate And Term Refinance Loan? HUD 4000.1 explains that “at least one Borrower” named on the original home loan as | more...

 
How can I get ready for an FHA loan application?

How Can I Get Ready For An FHA Loan Application?

How can I get ready for an FHA loan application? The process includes some advice you’ve likely heard before (check your credit, make sure you have on-time payments, and avoid new credit applications before you apply for a home loan) but there are other steps to take in the earliest stages of your house hunting journey that can be very helpful. Home Economics Do you know how much it will cost to live in and maintain  your home? Utility bills for a house are likely to be higher than for a small apartment. It’s important to start learning what typical utility rates, commuting costs, and other expenses related to owning your home instead of renting. You’ll also want to investigate how much it may cost down the road to repair | more...

 
Can I get an FHA loan for a home in a flood zone?

Can I Get An FHA Mortgage For A Home In A Flood Zone?

Can I get an FHA loan for a home in a flood zone? With Hurricane Harvey, Hurricane Irma, and many other natural disasters, it’s logical that someone looking for a home anywhere near these disasters would wonder if their house hunt is going to be affected. FHA loan rules do address flood zones and FHA appraisal requirements for these areas; the answers can be found in HUD 4000.1. The FHA loan rules for this issue can be found under a section covering general property eligibility for an FHA mortgage. On page 143, we learn: “The Mortgagee must determine if a Property is located in a Special Flood Hazard Area (SFHA) as designated by the Federal Emergency Management Agency (FEMA).” “The Mortgagee must obtain flood zone determination services, independent of any | more...

 
Can I finance my FHA loan up front mortgage insurance premium?

Can I Get A Second FHA Appraisal If I Don’t Agree With The First One?

Can I get a second FHA appraisal if I don’t agree with the first one? This is a common question, normally asked if the appraised value of the home comes in differently than a buyer or seller expects it to. FHA loan rules don’t allow a borrower to be forced into purchasing a home where the appraised value is lower than the asking price, so it’s an issue that can definitely affect a home loan transaction depending on what the borrower wishes to do in such cases. Can I Order A Second FHA Appraisal? FHA appraisals are ordered by the lender, so the borrower cannot initiate any second appraisal requests. In any case, the lender is restricted on how and when a second appraisal may be ordered. Specific Restrictions On | more...

 
Can I get an FHA single family loan for a multi-unit home?

Can I Get a Single Family FHA Loan For A Multi-Unit Home?

Can I get an FHA single family loan for a multi-unit home? Some borrowers get confused by the wording in the name of the FHA Single Family Home Loan program. It’s easy to assume that FHA single family mortgages are for one-bedroom houses, but that is definitely not the case. FHA loans are approved for homes that feature as many as four living units-a four unit property can definitely be financed with an FHA loan assuming the borrower is qualified to be approved for the mortgage. One-to-four unit properties purchased with FHA mortgages must be the primary residence of the borrower-you must agree to occupy the home purchased with an FHA mortgage loan usually within approximately two months after loan closing (unless the borrower makes other arrangements with the lender | more...

 
What should I know about FHA loan escrow account rules?

What Should I Know About FHA Home Loan Escrow Account Rules?

What should I know about FHA loan escrow account rules? Depending on the nature of your transaction, lender standards, and other issues, you may be required to use an escrow account to complete or maintain your FHA mortgage. The rules for escrow accounts to be used in FHA loan transactions are found in the FHA loan handbook, HUD 4000.1. The section governing escrow includes guidance that such accounts must be established in accordance with procedures defined in the Real Estate Settlement Procedures Act. The escrow account must be maintained in order to meet monthly financial obligations including the following (where applicable) as found in HUD 4000.1: -hazard insurance premiums; -real estate taxes; -Mortgage Insurance Premiums (MIP); -special assessments, including any assessments related to a PACE obligation; -flood insurance premiums if | more...

 
What Kind Of Home Can I Buy With An FHA Loan?

What Kind Of Home Can I Buy With An FHA Loan?

What kind of home can I buy with an FHA loan? That is an important question-not everyone is looking for a typical suburban home. Some people are interested in farm homes, condos, town homes or duplexes, or manufactured housing. What does the FHA loan handbook, HUD 4000.1, have to say about what can be purchased with an FHA mortgage? FHA Single Family Loans For Owner/Occupiers FHA single-family loans are intended for owner-occupiers who intend to use the home as their primary residence. There are some exceptions to this (we will cover those in another blog post), but for most transactions, borrowers must own/occupy the home as their main address. FHA Single Family Loans For Multi-Unit Properties Buyers can purchase homes they intend to occupy even if those homes have more | more...

 
Why is peeling paint an issue for the FHA appraisal?

Are FHA Appraisals The Same As Home Inspections?

Are FHA appraisals the same thing as home inspections? We’ve fielded a few reader questions this week about this issue, and it is very important for borrowers to fully understand why they should budget and save for the optional home inspection in addition to an FHA appraisal (which is not optional). FHA appraisals are NOT the same as home inspections. Appraisers and home inspectors will approach the same property with different intentions and procedures. The FHA appraisal will never give a borrower an informed look at the home the way the home inspection is designed to; the shortest way to address this issue is to state that appraisals are for lenders, home inspections are for borrowers. Even if a property makes it all the way through the appraisal process with | more...

 
Can I Get A Second FHA Appraisal?

Can I Get A Second FHA Appraisal?

Can I get a second FHA appraisal? There are a few reasons why a borrow might feel motivated to ask that question, but in many cases it could be due to a disagreement about the outcome of the original FHA appraisal. Ordering A Second FHA Appraisal FHA loan rules in HUD 4000.1, the FHA single-family home loan handbook, clearly state the FHA’s position on ordering second appraisals due to a dispute over the outcome. “The Mortgagee is prohibited from ordering an additional appraisal to achieve an increase in value for the Property and/or the elimination or reduction of deficiencies and/or repairs required.” That is simple enough. However, there may be situations where one party to the loan feels that the appraisal was not done competently or that the appraisal is | more...