May 24, 2018

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Articles Tagged With: FHA Guidelines

FHA Home Loan Rules And Airbnb

FHA Home Loan Rules And Airbnb

Is it possible to buy a home with an FHA loan to use as an Airbnb type venture? Borrowers are eligible to apply for FHA home loans for up to four unit residences; what do FHA loan rules say about using the home as a rental space? FHA loan rules governing these situations are found in HUD 4000.1. Borrowers may feel encouraged by the notion that owner-occupied properties with up to four units can by purchased with an FHA mortgage, and even more encouraged that the rules actually do address (and permit) borrowers to rent out the unused living potions. However, renting these units out is also subject to FHA loan rules (in addition to lender requirements and state law). What does HUD 4000.1 say about using spaces in your | more...

 
FHA One Time Close Construction Loans: What's Required At Closing Time

FHA Loans And Electronic Signatures: Rules You Need To Know

What do you need to know about FHA loans and electronic signatures? In the 21st century, it’s easy to assume that certain aspects of digital and mobile culture are applicable to most (if not all) transactions. But in the case of FHA home loans, it’s not quite that easy. Electronic Signatures Are Not Universal The use of electronic signatures for home loan paperwork is not available from all participating FHA lenders, and FHA loan rules do not permit the use of electronic signatures in certain loan transactions. In fact, on certain types of loan paperwork, electronic signatures are never permitted, at least at the time of this writing. FHA Loan Rules Define Electronic Signatures HUD 4000.1 instructs the lender, “An electronic signature conducted in accordance with the Electronic Signature Performance | more...

 
Can I Assume An FHA Mortgage?

Can I Assume An FHA Mortgage?

Can I assume an FHA mortgage? That is a question on the minds of those looking to take over an FHA home loan from the original borrower. Loan assumptions are a bit different than a new purchase home loan application, though the borrower must be able to afford the loan in both cases. The short answer is that yes, in most cases with lender participation you may be able to assume an existing FHA home loan from the original borrower. A credit check may or may not be required (see below) depending on circumstances, and lender standards. It’s the lender’s job to determine whether or not the loan assumption will happen-FHA loan rules in HUD 4000.1 permit the assumption of an FHA mortgage, but the process requires the lender’s participation. | more...

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

FHA Loan Rules: Late Or Missed Housing Payments

Many readers contact us asking about the FHA loan rules for late or missed housing payments. These questions aren’t usually along the lines of “what happens if I am late making my FHA mortgage loan payment”, but rather how a participating FHA lender will view late or missed housing payments when it comes time to approve or deny the mortgage loan application. FHA loan rules governing the lender’s loan approval process are found in the FHA Single Family Loan Handbook, HUD 4000.1. These instructions to the lender aren’t the only rules that may affect your transaction; lender standards and state/federal laws will also apply. But the basic guidelines for the FHA home loan approval process give the lender specific instructions for FHA loan minimum requirements, and that will be the | more...

 
FHA Loan Rules For Debt-To-Income Ratios: Business Debt

FHA Loan Rules For Debt-To-Income Ratios: Business Debt

FHA loan rules for debt-to-income ratios (DTI) include guidelines for the lender when the loan applicant has debts listed in his or her name, but those debts are actually those of the borrower’s business. What do you need to know about this type of debt? Before addressing that issue, it’s important to point out that debt ratios are a very important part of the FHA loan approval process. The higher the amount of your monthly debt compared to your monthly income, the harder your loan officer has to work to justify approving the loan. A borrower with too much monthly debt may be required to have compensating factors as a condition of loan approval. Those factors can be a larger down payment, substantial savings in cash, or other things as | more...

 
FHA Refinance Loan Top Five Tips

What Is The Interest Rate For FHA Refinance Loans?

What is the interest rate for FHA refinance loans? This is an important question since your interest rate will affect the overall cost of your refi loan over time, and it’s good to know how rates work before you apply for a new home loan. FHA mortgage loan and refinance loan interest rates have a variety of factors that affect how they are determined for your loan. There is no single determining factor that allows a lender to give a single rate to all applicants-your interest rate is determined based on application data, market forces, and other factors. Does The FHA Set Interest Rates On FHA Refinance Loans? The FHA and HUD do not set or regulate FHA mortgage loan and refinance loan interest rates, except to require that the | more...

 
How Do You Get A One-Time Close FHA Construction Loan?

How Do You Get A One-Time Close FHA Construction Loan?

How do you get an FHA construction loan? If you want to have a new home built from the ground up (as opposed to buying an “existing construction” home that already exists), an FHA new construction loan is possible. The FHA One-Time Close construction loan makes it much easier with a single application and closing for the entire project. Other types of construction loans feature TWO closing dates and a more complex process. FHA One-Time Close mortgages simplify the construction loan by wrapping the entire loan process up with a single application and loan approval. Not all FHA lenders offer construction loans, so you’ll need to shop around to find the right lender for your needs. There are two basic types of FHA construction loans-a “traditional” construction loan, and an | more...

 
FHA One Time Close Construction Loans: What's Required At Closing Time

What Are The FHA Loan Rules For Occupancy?

What are the FHA loan rules for occupancy? This is a question many borrowers are curious about, especially those who are interested in becoming landlords and earning rental income from their property. Does the FHA single family home loan program allow a borrower to rent out the property purchased with an FHA mortgage? FHA Loans Are Specifically For Owner/Occupiers HUD 4000.1, the FHA loan handbook, states clearly that at least one person obligated on the FHA mortgage is required to use the property as their primary residence: “At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year.” Furthermore, the FHA clearly defines what it considers to be a “principal residence”. On page 140 of | more...

 
Can I Do My Own Contracting Work With An FHA One Time Close Construction Loan?

Why Do People Prefer FHA loans? Part Two

Why do people prefer FHA loans? That’s a question we’ve been examining recently. In a recent blog post we discussed FHA loan down payments, credit requirements, and related issues-all reasons people might turn to an FHA mortgage instead of a different kind of home loan. But there are other reasons to think about FHA mortgages, reasons that aren’t as as top-of-mind as what kind of down payment you might need. Consider the consumer protections and benefits built in to FHA mortgages that make these loans attractive. FHA Loans Permit Early Payoff Of The Mortgage Without Penalty The FHA lender handbook, HUD 4000.1, states that the borrower cannot be penalized for early payoff of the mortgage. In a section covering pre-payment of FHA loans, “pre-payment” is defined as follows: “A Partial | more...

 
Are There Any Income Documentation Rules For FHA Loans? Part Two

Are There Any Income Documentation Rules For FHA Loans? Part Two

Are there any income documentation rules for FHA loans? We have been examining this question, referring to the FHA loan handbook (HUD 4000.1) to see what the lender must do when reviewing a borrower’s income. The lender must calculate the applicant’s debt-to-income ratio using only verifiable income, and there are specific procedures your loan officer must use to do this. Those procedures can vary depending on the nature of your income. Are you salaried, hourly, commission, or contract? Depending on your payment arrangements, the lender must calculate the income accordingly. FHA Loan Applicants With Hourly Income HUD 40001. tells the lender that for hourly income, the loan officer must determine whether the hours of employment vary or not. If they do not vary, the lender can use the current rate | more...