Articles in Category: HUD Regulations

April 25, 2018

FHA Home Loan Closing Costs You Should Anticipate

FHA home loans have closing costs a borrower should plan to save and pay for. No matter if you need an FHA Home Equity Conversion Mortgage, a 203(k) rehab loan, or an FHA One Time Close construction loan, there will be closing costs to pay for. No borrower should plan for a home loan without anticipating the closing costs. You should budget and save for these expenses as early as possible-once you know you are interested in purchasing a home, you should prepare for these costs. HUD 4000.1 tells the lender that FHA loan rules permit closing costs; the lender “may charge and collect from Borrowers those customary and reasonable closing costs necessary to close the Mortgage. Charges may not exceed the actual costs.” This is not a complete or | more...

HUD Announces Resolution to California Fair Housing Case

February 20, 2018

HUD Announces Resolution In California Fair Housing Case

By Joe Wallace

The Department of Housing and Urban Development has announced the resolution of a California Fair Housing Act discrimination case. According to a press release at the HUD official site, the agency has reached an agreement with the Housing Authority of the County of Contra Costa (HACCC) and the Vallejo Housing Authority (VHA), “resolving allegations that they violated the Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act when they allegedly denied a request by a resident with disabilities to extend her search time to find suitable housing that would accept her Housing Choice Voucher”. Fair Housing Act laws make it illegal to discriminate against those buying or renting a home by “denying or limiting housing to persons with disabilities, or discriminating in | more...

Who May Contribute To My FHA Home Loan? Interested Party Contributions

February 13, 2018

What Can Affect An FHA Appraisal Or Inspection?

By Bruce Reichstein

What can affect an FHA appraisal or an FHA-required inspection? There are many factors that might influence the outcome of these procedures. For example, borrowers who are having a home custom-built using an FHA One-Time Close construction loan will learn about appraisal requirements that include noting the proximity of the project to gas stations, power lines, and other safety-related issues. The rules that instruct the lender and appraiser in these areas can be found in the FHA loan handbook, HUD 4000.1. Airport hazards, slush pits, and operating oil wells are just some areas the appraiser will note where applicable. For projects classified as New Construction under FHA loan rules, the appraiser must note the general environmental conditions of the area of the construction project and adjacent areas. According to HUD | more...

February 6, 2018

HUD Announces Aid Package For Puerto Rico

By Bruce Reichstein

The Department of Housing and Urban Development has announced a billion dollar relief package for Puerto Rico. According to a press release on the HUD official site, the agency “awarded more than $1.5 billion to help Puerto Rico to recover from Hurricanes Irma and Maria.” The funds are available via $7.4 billion in CDBG-DR (see below) funding for major disasters declared in calendar year 2017 thanks to a continuing resolution signed into law in September 2017. The HUD Deputy Secretary Pamela Hughes Patenaude discussed these HUD disaster recovery grants with Governor Ricardo Rosselló during a visit to Puerto Rico in the aftermath of Hurricanes Irma and Maria. Governor Rosselló, quoted in the press release, added, “On behalf of the many thousands of survivors here in Puerto Rico, I want to | more...

January 22, 2018

HUD Settles California Fair Housing Case

By Joe Wallace

The Department of Housing and Urban Development has announced a settlement in a California Fair Housing case. According to a press release on the HUD official site, the agency “has reached a conciliation agreement with the Richmond Housing Authority (RHA) in Richmond, California, settling allegations that it discriminated against a resident with disabilities.” Federal Fair Housing Act regulations prohibit the discrimination in the process of selling or renting a place to live because of the applicant’s disability. Fair Housing laws also forbid refusal to make reasonable accommodations for those disabilities. The settlement is the result of a resident’s complaint, “alleging that the Richmond Housing Authority failed to renew his Housing Choice Voucher before it expired” according to the press release. The complaint states that the resident submitted a request to | more...

January 15, 2018

Happy Martin Luther King, Jr. Day!

By Joe Wallace

Happy Martin Luther King, Jr. Day! Banks and markets are closed today to observe the holiday and we too feel it’s very important to remember this important day. America owes a great deal to Dr. Martin Luther King, Jr. and we are proud to observe this day dedicated to him. We pause are regular coverage of FHA news and answering reader questions about FHA home loans to observe the holiday. We resume our usual schedule of posts tomorrow. Thanks for reading!

FHA Home Loan Down Payment Rules You Should Know

December 26, 2017

What You Should Know About FHA Loan Down Payments

By Joe Wallace

What you should know about FHA loan down payments includes understanding the lender’s requirements for verifying the source of your down payment funds, and the fact that your down payment is not affected by other home loan fees or expenses. What do these things mean? The FHA Loan handbook, HUD 4000.1, has the answers. FHA Home Loan Down Payment Basic Requirements HUD 4000.1 tells the lender that the lowest possible down payment is 3.5% of the adjusted value of the property. This does not apply for HUD-owned “repo” homes also known as HUD REO properties. The rules for these homes includes the possibility of a $100 down payment (lender standards may also apply). The down payment is a condition of loan approval; the only FHA home loan “forward mortgage” for | more...

December 21, 2017

HUD Announces New Foreclosure Prevention Guide

By Joe Wallace

The Department of Housing and Urban Development has announced a new publication aimed at helping home owners avoid foreclosure and fraud. According to a press release on the HUD official site, the Homeowners Guide to Success is part of a “public-private partnership between federal agencies and industry partners. The guide provides homeowners with information on the critical first steps to take if they are at risk of missing a mortgage payment or facing foreclosure.” Foreclosure avoidance is an important issue, and with 2017’s natural disasters in Texas, Puerto Rico, Florida, and elsewhere, there is an emphasis not just on borrowers taking steps to keep their homes, but also to become more aware about the potential for fraud and scams aimed at those who struggle to keep up with mortgage payments. | more...

December 15, 2017

HUD Announces Settlement In California Fair Housing Case

By Joe Wallace

The Department of Housing and Urban Development has announced a settlement in a California Fair Housing Act case. According to a press release on the HUD official site, HUD has entered into an agreement “with the owner and property manager of Shadowbrook Gardens Senior Townhomes in Morgan Hill, California, a city in Santa Clara County, resolving allegations that they discriminated against a resident with disabilities”. A tenant of that property, “requested to have a live-in aide and a key to a locked gate near her unit that would make it easier for her to come and go” according to the HUD press release, which adds that in each case, “the owner and property manager allegedly asked her intrusive questions about her disability, challenged whether she really had a disability, asserted | more...

More FHA loan options for new and returning borrowers

December 4, 2017

FHA Loan Appraisal Rules For Central Heating and Air Conditioning Systems

By Bruce Reichstein

What are the FHA loan appraisal rules for central heating and air conditioning systems? Does a house need to have central air/heating to be FHA approved? There are two answers to this question. One of those answers is found in the FHA loan appraisal guidelines and is a general rule for all FHA appraisals. In HUD 4000.1, we learn the following about the appraisal requirements for heating systems and central air conditioning units: “The Appraiser must examine the heating system to determine if it is adequate for healthful and comfortable living conditions, regardless of design, fuel or heat source. The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if the permanently installed heating system does not: –automatically heat the living areas of the house to a | more...