Articles in Category: FHA Lenders

September 26, 2018

What Happens If I Pre-Pay My FHA Mortgage?

What happens if you pre-pay your FHA mortgage? FHA home loans are known for having no pre-payment penalty but there may be certain steps the borrower is required to take in order for such pre-payments to be used as intended. The date of your FHA loan may make an important difference in how you are to proceed; it’s best to discuss pre-payment options with your loan officer ahead of time to learn what, if any, additional lender requirements may exist above and beyond the FHA loan standards we’re discussing here. What follows is NOT lender policy but the FHA loan rules. Lender requirements may add to or further develop these FHA guidelines. FHA Home Loan Rules For Pre-Payment On Mortgages Closed On Or After January 21, 2015 FHA loan rules | more...

June 18, 2018

FHA Loans: What Does It Mean To Be A First-Time Home Buyer?

By Joe Wallace

What does it mean to be a first-time home buyer when applying for an FHA home loan? Many borrowers want to know if there is an advantage to applying for an FHA mortgage if they have never borrower money for a home before. What is the reality? The FHA loan program itself does not give advantages to the first-time home buyer, nor does it penalize someone who has owned a home before. All financially qualified applicants are able to get an FHA loan even if they have purchased a home before. That does NOT mean first-time home buyers won’t get offered incentives from a participating FHA lender, but those incentives are offered by the lender and not via the FHA home loan program itself. Borrowers who are first-time home buyers | more...

April 25, 2018

FHA Home Loan Closing Costs You Should Anticipate

By Joe Wallace

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...

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!

Rent Or Buy? Arguments For Purchasing A Home With An FHA Mortgage

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...

June 2, 2017

HUD Kicks Off National Homeownership Month

By Bruce Reichstein

The HUD official site (www.HUD.gov) has announced that June is National Home Ownership Month. According to a HUD press release, June has been declared a time, “to reflect upon the impact owning a home has on household wealth, neighborhood stability and the nation’s broader economic health. The theme of National Homeownership Month 2017 is ‘Find Your Place in a New Era of Homeownership.'” The press release also adds that HUD Secretary Ben Carson helped begin Homeownership Month, “by hosting an academic forum on the state of homeownership in the U.S. following the housing crisis, specifically the challenges Millennials face” as the generation enters the job and housing markets. “After all we’ve been through, homeownership remains an American value and the cornerstone of our economy,” said Secretary Carson in the HUD | more...

May 16, 2017

FHA Loan Application Data: What You Should Know

By Joe Wallace

The FHA single family loan program rule book, HUD 4000.1, has a variety of rules and instructions to the lender on how FHA loan application information is to be handled and processed. You might not think those rules affect you as an applicant, but some of the rules do pertain to how the lender must collect the borrower’s information and the approved sources of that information. Your credit scores and other data must be given to the lender from approved sources. Did you know that HUD 4000.1 does not permit the borrower to handle or transmit certain kinds of information to the lender? Your loan officer is responsible for making sure she gets the information from the proper sourcing. According to HUD 4000.1: “Mortgagees must not accept or use documents | more...

Can I buy a manufactured home with an FHA loan?

May 3, 2017

Work Absences And FHA Loans

By Joe Wallace

Can FHA loans depend on a borrower not having medical leave or temporary absences from work? That’s what one reader wants to know this week: “I was out from work one month do to a job related injury. Can I get an FHA loan? How long I have to wait to qualify? I have been working for the same company three years.” FHA loan rules may be non-specific on certain types of circumstances, preferring to defer to state law, lender standards, or other guidelines. However, this situation is not one of those. HUD 4000.1 specifically addresses the issue of temporary absences from the applicant’s place of employment. HUD 4000.1 describes this as a “temporary reduction of income”, stating: “For Borrowers with a temporary reduction of income due to a short-term | more...

April 17, 2017

April Is National Fair Housing Month

By Joe Wallace

National Fair Housing Month is a bit more than half over, but it’s an important time to raise awareness of Fair Housing laws, how they affect mortgage loan applicants, and how such laws affect renters as well as borrowers. Do you know about your Fair Housing Act rights under the law? The FHA/HUD official site reminds its’ readers, “The Fair Housing Act protects people from discrimination when they are renting, buying, or securing financing for any housing. The prohibitions specifically cover discrimination because of race, color, national origin, religion, sex, disability and the presence of children”. You read that correctly-as a renter, a buyer, or an applicant, your rights include equal consideration regardless of the presence or absence of any of the factors listed above. Fair Housing laws do have | more...

March 27, 2017

FHA Loans and Co-Signers: A Reader Question

By Joe Wallace

A reader asked us a question about FHA loans and co-signers recently. “If I cosigned for a friend and he refinanced to get everything put in his name and me taken off, am I eligible for an FHA loan for my own home?” FHA mortgage loan requirements refer to co-signer arrangements and “contingent liabilities”. HUD 4000.1 says: “A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment. Contingent liabilities may include Cosigner liabilities and liabilities resulting from a mortgage assumption without release of liability.” If the reader’s circumstances meet that definition | more...