Articles Tagged With: FHA ARM

September 5, 2012

FHA Loans and Homeowner’s Association Policies

A recent press release issued by the FHA/HUD announced charges against a Florida homeowner’s association for policies the press release claims are in violation of the Fair Housing Act. According to HUDNo.12-145, “The U.S. Department of Housing and Urban Development (HUD) announced…that it is charging a Gibsonton, FL, homeowners association and its Tampa-based former management company with violating the Fair Housing Act by subjecting a family to different rental terms and conditions because they have six children.” The charges allege, according to the press release, “that Townhomes of Kings LakeHomeowners Association (HOA), Inc., and Vanguard Management Group, Inc., violated the Fair Housing Act by telling the family that they had too many people living in their rental townhouse and threatening to evict them if they didn’t reduce the number of | more...

August 28, 2012

FHA Loans, Fair Housing Laws, and Discrimination: What You Can Do

By Joe Wallace

In the month of August, 2012, the FHA/HUD official site reported no fewer than four cases investigated by the Department of Housing and Urban Development related to housing discrimination. In one case, the owners of an Alabama mobile home park were charged with discriminating against an African-American family; another case that reached the settlement stage in Alabama involved discrimination against Hispanic residents. Two more cases, one in West Virginia and another in Minnesota, involved racial bias and discrimination due to a medical condition. FHA loan rules, state laws and federal statutes forbid discrimination of any kind in the housing process. Whether you are applying for a home loan, looking for rental housing, or trying to renew leases or refinance, it is illegal to deny housing for reasons of race, creed, | more...

March 8, 2012

What You Should Know About FHA ARM Loans

By Joe Wallace

Did you know the FHA loan program gives borrowers the option of choosing an adjustable rate mortgage, also known as an FHA ARM loan? Adjustable rate mortgage loans offer an introductory interest rate which, according to the terms of the individual loan, change after the introductory fixed rate period. How long the introductory period may last can vary depending on the loan. Once the introductory rate period has elapsed, the adjustable rate is subject to a cap which can apply year-to-year, or over the lifetime of the FHA loan. The introductory interest rate is often lower than the fixed rate of conventional home loans, making ARM loans attractive to some borrowers depending on their financial needs and goals. ARM loans are comprised of four basic components; the index, margin, interest | more...

January 19, 2012

FHA Loan Reader Question: FHA Loans and Credit History

By Joe Wallace

Sometimes, shopping around for a participating FHA lender is a bit more complex that you might think. There are basic issues related to competitive interest rates, getting the most favorable terms, even the simple chemistry between the borrower and the bank can be an issue. But what about situations where the borrower feels the lender hasn’t quite done right in terms of customer service? One reader left this comment; “I owned my home for 12 years (FHA loan) and sold it December 2010. I am now told that I have NO CREDIT SCORE!!! I paid cash for car and have no credit cards. I

January 12, 2012

FHA Loans: Can I Change the Terms of Sale Agreement?

By Joe Wallace

The FHA provides many helpful resources for homebuyers on its official site at FHA.gov. One of those resources is an online version of a HUD/RESPA booklet called “Buying Your Home” which includes a section on settlement costs. One of the first portions of this booklet a prospective FHA mortgage loan applicant will read includes the following: “The real estate broker probably will give you a preprinted form of agreement of sale. You may make changes or additions to the form agreement, but the seller must agree to every change you make. You should also agree with the seller on when you will move in and what appliances and personal property will be sold with the home.” The second sentence contains a revelation for some borrowers–some loan applicants simply assume that | more...

November 30, 2011

FHA Loan Loan Limits and Non-Occupying Co-Borrowers

By Joe Wallace

If you’re buying a single-family home with an FHA insured mortgage, FHA loan rules require you to certify the property will be your primary residence. But FHA loans do permit a loan with co-borrowers who do not plan to occupy the property. Chapter Three of FHA Handbook 4155.1 states, “A non-occupying borrower transaction involves two or more borrowers where one or more of the borrower(s) will not occupy the property as his/her primary residence.” This in mind, borrowers should know that there is a different FHA maximum mortgage permitted for a non-occupying borrower transaction in many circumstances. “When there are two or more borrowers, but one or more will not occupy the property as his/her principal residence, the maximum mortgage is limited to 75% loan-to-value (LTV).” However, the rules do | more...

June 28, 2011

The Different Types of FHA Home Loans

By Joe Wallace

There are many different types of FHA insured home loans to choose from. Buying a home or refinancing one isn’t a one-size-fits-all process, and FHA guaranteed loans come in a variety of types to accommodate the various needs different house hunters or current home owners bring to the lender. The two most basic types of FHA home loans are new purchase loans and refinancing loans. New purchase FHA loans, by name alone, may seem to indicate that these loans are intended only for new construction houses, but new purchase simply refers to the type of transaction (a “new to you” home purchase), not the age or condition of the property itself. FHA refinancing is, as the name implies, a home loan intended to pay off an old home loan and | more...

May 3, 2011

FHA Loans, Appraisals and Refinancing

By Joe Wallace

FHA loan applicants who find a suitable home and want to buy it must wait out the required FHA appraisal process before a loan can be approved. The FHA appraiser’s job is to make sure the home meets minimum property requirements and to assign the fair market value. The fair market value establishes a baseline for the FHA loan amount and is a very important part of the process. That appraisal has an expiration date. According to FHA rules, ” Effective for all case numbers assigned on or after January 1, 2010 the validity period for all appraisals on existing, proposed, and under construction properties, including HUD REO appraisals that have an effective date of on or after April 1, 2010, will be 120 days.” That doesn’t give the borrower | more...

May 2, 2011

FHA Loans: The Non-Purchasing Spouse

By Joe Wallace

First-time home buyers looking into an FHA mortgage soon learn about a variety of requirements. Some are the rules set by a particular lender, others are dictated by the Department of Housing and Urban Development, while others are established by state laws that govern retail banking procedures. Of these guidelines, often the state laws vary the most from place to place. One example of this is the

April 29, 2011

How Does the Bank Approve FHA Loan Applicants? (Part Two)

By Joe Wallace

In our last blog post we discussed how the lender processes applications and the information on them when approving FHA home loans. The FHA has a strict set of rules covering what must be used to underwrite the loan and how the borrower’s personal data must be verified in order to process the loan paperwork. Three areas are explored at length by the lender;