Articles in Category: FHA Requirements

December 1, 2021

FHA Loan Limits Increase In 2022

There are higher FHA loan limits scheduled for the year 2022. The FHA and HUD have published two mortgagee letters explaining the new limits for purchase loans and reverse mortgages guaranteed by the FHA (known as FHA Home Equity Conversion Mortgages). According to the HUD official site, the new forward mortgage loan limits for FHA loans in 2022 are available to view but do not take effect until the new year. HUD.gov reminds readers that the FHA loan limit calculations include “a nationwide forward mortgage limit ‘floor’ and ‘ceiling’ for a one-unit property. In 2022 the floor is $420,680 (low-cost areas) and the ceiling is $970,800 (high-cost areas). The floor is established at 65% of the national conforming loan limit of $647,200 for a single-unit home. For multi-unit properties in | more...

November 30, 2021

Do I Have To Make A Down Payment On An FHA Mortgage?

By Joe Wallace

One variation of a commonly asked question about FHA home loans is, “Do I have to make a down payment on an FHA mortgage?” This question gets asked sometimes in reference to other government-backed loans that feature no down payment (available via a Department of Veterans Affairs program offered to qualifying military members and certain military spouses only). FHA home loans do require money down-the borrower’s minimum required investment is 3.5% of the adjusted value of the home. But the borrower does not always have to pay that money out of pocket. Why? State and local down payment assistance programs can help–a borrower using a state or local program that meets FHA standards for third-party down payment help could save thousands upfront on the loan. What kind of standards are | more...

November 24, 2021

When Will You See The New FHA Home Loan Limits For 2022?

By Bruce Reichstein

FHA loan limits for 2022 have not been published at the time of this writing but many who are planning to purchase a home in the new year are eager to know whether loan limits are changing–higher or lower depending on where you live. When do the new rates get published? This time last year, FHA loan limits for 2021 wound up being published on December 2, 2020, FHA issued Mortgagee Letter 20-41 (setting the FHA loan limits for purchase loans, also known as forward mortgages) and Mortgagee Letter 20-42, establishing the limits for FHA Home Equity Conversion Mortgage loans. In both cases, the loan limits are effective starting on the first day of the new year and not before. That means that even if you can look up the | more...

November 22, 2021

How To Get Cash Back On An FHA Home Loan

By Joe Wallace

Do you need to know how to get cash back on an FHA home loan? If you want to purchase a home with an FHA “forward mortgage” you might be tempted to ask your lender if it’s possible to apply for more mortgage loan money than is required to complete the transaction. This question usually comes with the hope of being allowed to take the extra loan funds out in cash similar to a personal loan. Some borrowers want to know if they can do this, but that specific scenario is definitely NOT possible under FHA home loan rules. Borrowers are not permitted to get cash back in such cases (we’re discussing FHA purchase loans here and NOT FHA cash-out refinance loan options) except in the form of a refund | more...

November 17, 2021

Worried About Getting Scammed During Your Home Loan Approval Process?

By Joe Wallace

There are plenty of warnings about mortgage scams, mortgage-related identity theft schemes, and much more. We could go into the specifics of one or two of the more popular variations, but it’s equally important to know how to protect yourself more or less unilaterally against such threats to your privacy, your personal data, and your money. The first type of “best practices” you should adopt to protect yourself against scams of any kind? Refusing to respond to “out-of-the-blue” contacts on social media, text messages, or emails that you did not initiate. People get contacted unsolicited for legitimate reasons all the time. What we’re talking about here is third parties who write you trying to get you to click on a link, provide your account information, or perform some other act | more...

November 12, 2021

How Long Do You Have To Be At A Job To Get An FHA Loan?

By Bruce Reichstein

How long do you have to be at one particular job to get an FHA loan? The employment issue is an important one, but some borrowers misunderstand the rules, thinking them to be more strict than they actually are. What is the reality of the FHA loan employment rules? FHA Loan Rules For Minimum Employment Standards The rules governing FHA loan employment standards are found in the FHA loan handbook, HUD 4000.1, which includes the following requirement on how the lender must verify the borrower’s employment history: “Mortgagees must not accept or use documents relating to the employment, income, assets, or credit of Borrowers that have been handled by, or transmitted from or through the equipment of unknown parties, or Interested Parties.” Furthermore, the lender “may not accept or use | more...

November 9, 2021

FHA Mobile Home Loans Get Enchancements

By Bruce Reichstein

For the first time in four decades, the Federal Housing Administration has published major new guidelines to improve the sale of manufactured homes, mobile homes, etc. In a press release on the FHA and HUD official sites, it was announced that the FHA Title One Program for purchasing mobile homes has been revised and “enhanced” with policies designed to streamline the program and help those who want to use and FHA mortgage to buy a manufactured home. These rules are updated to include FHA mortgages for mobile homes that are “titled as personal” as well as the lot where such a home would be placed. Motivation for these enhancements includes a need to make the program guidelines more understandable to both lenders and borrowers, “while providing expanded eligibility requirements for | more...

November 3, 2021

FHA Loans: For Buying Your First Home

By Bruce Reichstein

Are you looking for your first home? The FHA home loan program offers mortgages with 3.5% down payments if you qualify with FICO scores, income, and responsible credit use. What do you need to know about what it takes to get approved for an FHA mortgage as a first-time buyer? A lot may depend on variables in your life such as how long you have been in the job market, what your current debt ratio looks like, and whether the employment you have now is stable and likely to continue into the first years of the new loan. Why do we say this? Because FHA mortgages require a minimum income history but not a minimum income. FHA loan approval depends on your credit history, your FICO scores, AND your employment. | more...

October 26, 2021

What You Need To Know About FHA Loans And Your FICO Score

By Joe Wallace

FHA home loan approval depends on a number of things–your payment history on your financial obligations, your employment, and your FICO scores. Credit scores are a big worry for some home loan applicants. Do you have thin credit? Have you had poor credit habits in the past that you are trying to fix? Remember, more consumers than you realize have had similar issues in the past–there is no shame in trying to correct your past mistakes and get back on track with your credit. Too many people feel a sense of shame about their past credit issues–and that shame can prevent people from taking constructive steps to help themselves. Did you know that you can begin repairing your own credit by making consistent on-time payments and lowering your balances on | more...

October 25, 2021

Can I Apply For A New Mortgage After Bankruptcy?

By Bruce Reichstein

Is a home loan in the wake of bankruptcy an impossible dream? In many cases, no, it’s not. But a potential borrower looking to start house hunting again after a Chapter 7 or Chapter 13 bankruptcy has been discharged should know about some rules that will apply in such cases. Do you know what they are? Some borrowers, including first-time home buyers, assume that after a Chapter 7 or Chapter 13 bankruptcy filing it is all but impossible to get a participating FHA lender to consider a loan application. It’s a mistake to count yourself out of the running to apply for a new home loan. Some people wrongly assume you must wait seven years or longer to apply for a new mortgage after bankruptcy. FHA home loan rules indicate | more...