Articles Tagged With: FHA and HUD

April 4, 2016

FHA and HUD Kick Off Fair Housing Month

April is Fair Housing Month, a time when efforts are made to raise the awareness of fair housing issues and federal law that protects those seeking a place to live from discrimination. That’s why the FHA and HUD began Fair Housing Month 2016 with the launch of a national media campaign designed to help the public, “to envision what communities with shared opportunity for all might look like. The new campaign is designed to further educate the public about their housing rights and the ideals behind HUDs new Affirmatively Furthering Fair Housing (AFFH) initiative” according to a 1 April press release. “The campaign, which was developed in partnership with the National Fair Housing Alliance (NFHA), will include print Public Service Announcements (PSAs) in various languages, television PSAs in English and | more...

March 31, 2016

FHA Loan Questions: Mixed Use Property

By Joe Wallace

We answer many questions about FHA home loans in the comments section. Here’s one of the most recent, on the subject of mixed-use properties, co-borrowing, and more: “My sister and I want to buy a house that is 1/2 apartment, 1/2 store. I already own a home and have an 820 credit score. She has a 620 score, and would be the owner occupant. I am married. Does my husbands income affect the debt to income ratio? If not, am I only calculated as responsible for 1/2 of our mortgage payment each month?” There are several issues that can affect the answers to these questions. To begin with, let’s examine what FHA loan rules in HUD 4000.1 say about transactions with non-occupying co-borrowers: “A Non-Occupying Borrower Transaction refers to a | more...

March 30, 2016

FHA Loan Rules For Income and Debt Calculation: Collections

By Joe Wallace

FHA loan rules cover a lot of ground when it comes to a borrower’s creditworthiness. There are minimum FICO score requirements, instructions to the lender for reviewing the borrower’s record on-time payments (12 months of reliable payments on all financial obligations is strongly recommended), and much more. One area that is also covered in HUD 4000.1 is what the lender should do if collections are included in borrower’s credit history. The presence of a collection action on a loan applicant’s record may be cause for concern, but there are instructions to the lender on how to view collection accounts and what to do if those collections fall within the lender’s “tolerance” for loan approval. What will the lender require under FHA loan rules if the loan can move forward? HUD | more...

March 29, 2016

FHA/FDIC Advice On Interest-Only Loans, Adjustable Rate Mortgages

By Joe Wallace

We discuss a lot of aspects of the FHA home loan process, but sometimes it’s a very good idea to go right to the source–the FHA itself–to get the agency’s take on certain aspects of the FHA loan process. The FHA official site–www.FHA.gov–has some good advice for borrowers contemplating their loan options including interest-only loans and adjustable rate mortgages (ARMs). What does the agency say to potential borrowers about these kinds of loans? One of the first pieces of advice is along the basic lines of, “do your homework, and be sure to read the fine print”. The FHA official site actually directs readers to look at another official government website–the FDIC official site–for some sound advice on how to approach the mortgage loan process where ARMs and interest-only mortgages | more...

March 25, 2016

HUD Reaches Settlement In California Housing Discrimination Case

By Joe Wallace

Housing discrimination affects people in all stages of the journey to find a home. It doesn’t matter whether you are a renter, a prospective borrower, or somewhere in between; the rules that make up the Fair Housing Act apply across the board for those looking for a place to live. The FHA/HUD official site recently published a press release announcing a settlement in a California housing discrimination case; sometimes the victims of housing discrimination are the only ones who can prevent further discrimination from happening. Those who report their experiences do a service to themselves and to future borrowers and renters by helping to end illegal practices such as the ones mentioned in HUDNo.16-035: “The U.S. Department of Housing and Urban Development (HUD) announced today an agreement with a Cupertino, | more...

March 22, 2016

How Much Can I Borrow With An FHA Mortgage Loan?

By Joe Wallace

One of the most common questions about FHA loans is, “How much can I borrow?” The answer to that question is a lot easier to get by using an online mortgage calculator to factor in the length or term of the loan, interest rate (estimated), estimated property taxes and other details. Some of the information you need to calculate how much you can borrow depends on circumstances. The interest rate, for example, is determined in part by what rates are on offer currently based on market conditions and other factors but also by your credit history and FICO scores. The better your FICO scores are, the better the interest rates. The borrower and the lender negotiate interest rates on FHA mortgages, they are not set or regulated by the FHA | more...

March 17, 2016

FHA Loan Advice: Know Your Costs, Interest Rates

By Joe Wallace

We give a lot of advice both here and in our comments section about FHA home loans. And there’s a lot to give; FHA loan rules cover everything from the acceptable minimum condition of the home to a borrower’s credit requirements for maximum financing. But what does the FHA itself, as a government agency, say about the home buying process? Our publication is not associated with the FHA in any way, and what follows is the result of our research and examination of FHA-published material. What we have found is definitely information a potential borrower should consider during the planning stages of a new home loan or refinance loan. An FHA publication titled, Looking For The Best Mortgage has some excellent overall advice for the borrower starting with the old | more...

March 16, 2016

FHA Loan Rules for “Expected Income”

By Joe Wallace

It’s easy for borrowers to get nervous about their debt to income ratio when trying to qualify for an FHA mortgage. Some, who may be concerned that their ratio isn’t good enough may look to expected raises, performance bonuses, or other types of future earnings that haven’t begun yet in hopes that those extra earnings might give them a better chance at loan approval. But what do FHA loan rules say about this type of expected income? The issue is addressed on page 2o7 of HUD 4000.1, starting with the FHA definition of expected income, provided to clear up any confusion over what may or may not be counted as such: “Expected Income refers to income from cost-of-living adjustments, performance raises, a new job, or retirement that has not been, | more...

When Is An FHA Loan Better Than A Conventional Loan?

March 9, 2016

FHA Loan Rules in HUD 4000.1 on Maximum Loan Amounts

By Joe Wallace

When the FHA and HUD published HUD 4000.1, that document became the comprehensive rule book for FHA single family home loans and refinance loans. Many policies were updated, amended, altered or restated and there’s no way to compare all the changes with the previous version of FHA home loan rules found in HUD 4155.1 and HUD 4155.2. With that in mind we have been examining important sections of HUD 4000.1 to learn what the most up-to-date FHA loan policies are. Today we’re examining the FHA loan rules for maximum loan amounts. HUD 4000.1 begins this section by explaining the basics: “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 | more...

March 8, 2016

FHA Loan Rules For Home Sales: HUD 4000.1

By Joe Wallace

The FHA Single Family Mortgage Loan program is regulated by the rules published in HUD 4000.1. These rules cover everything from appraisal requirements and FICO score minimums to Fair Housing requirements and responsibilities. HUD 4000.1 also establishes requirements for the home loan transaction–for example, did you know FHA mortgage loan rules have specific parameters for who can sell the property to the borrower purchasing with an FHA mortgage? HUD 4000.1 clearly states: “To be eligible for a mortgage insured by FHA, a Property must be purchased from the owner of record. The transaction may not involve any sale or assignment of the sales contract.” How is the lender required to establish that the seller is the owner of record? FHA loan rules say the lender must, “obtain documentation verifying that | more...