November 17, 2017

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Articles Tagged With: FHA Guidelines

Why do people prefer FHA loans? Part Two

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...

 
Are there any income documentation rules for FHA loan?

Are There Any Income Documentation Rules For FHA Loans?

Are there any income documentation rules for FHA loans? That is what some borrowers want to know when they are ready to fill out a mortgage loan application. What does your FHA lender need to know about your income and employment? The FHA Lender Is Required To Document Your Employment And Income In the FHA loan handbook, HUD 4000.1, your FHA loan officer is instructed to document two years of employment, though that two years is not necessarily required to be with the same company or in the same job position. The lender wants to know your income history, whether you have gotten any raises, or whether recent job changes have resulted in a benefit to you income-wise. FHA Loan Rules Require Independent Verification Of Your Income This means that | more...

 
How do you qualify for an FHA loan?

How Do You Qualify For An FHA Loan?

How do you qualify for an FHA loan? Many want to know what it takes to get approved for an FHA mortgage, and you may be surprised to find out that FHA mortgage loans have more forgiving minimum requirements than other types of home loans. Lender standards will apply above and beyond FHA minimums depending on the financial institution and other factors, but in general FHA mortgages are designed to be more affordable and more forgiving where credit qualifications are concerned. Qualifying For An FHA Mortgage To begin, only owner-occupiers are allowed to get FHA loans. You can’t buy an investment property with an FHA mortgage unless you are a non-profit or a government agency (generally speaking). If you intend to purchase property you will live in as your home | more...

 
How long do you have to be at a job to get an FHA loan?

How Long Do You Have To Be At A Job To Get An FHA Loan?

How long do you have to be at a job to get an FHA loan? The employment issue is an important one, but some borrowers misunderstand the rules, thinking them to be more strict than they actually are. What is the reality of the FHA loan employment rules? FHA Loan Rules For Minimum Employment Standards The rules governing FHA loan employment standards are found in the FHA loan handbook, HUD 4000.1, which includes the following requirement on how the lender must verify the borrower’s employment history: “Mortgagees must not accept or use documents relating to the employment, income, assets, or credit of Borrowers that have been handled by, or transmitted from or through the equipment of unknown parties, or Interested Parties.” Furthermore, the lender “may not accept or use any | more...

 
What are the minimum property standards for an FHA loan?

Can I Get a Single Family FHA Loan For A Multi-Unit Home?

Can I get an FHA single family loan for a multi-unit home? Some borrowers get confused by the wording in the name of the FHA Single Family Home Loan program. It’s easy to assume that FHA single family mortgages are for one-bedroom houses, but that is definitely not the case. FHA loans are approved for homes that feature as many as four living units-a four unit property can definitely be financed with an FHA loan assuming the borrower is qualified to be approved for the mortgage. One-to-four unit properties purchased with FHA mortgages must be the primary residence of the borrower-you must agree to occupy the home purchased with an FHA mortgage loan usually within approximately two months after loan closing (unless the borrower makes other arrangements with the lender | more...

 
Which of my debts are evaluated for an FHA home loan?

Which Debts Are Evaluated For My FHA Home Loan?

Which of my debts are evaluated for an FHA home loan? Borrowers sometimes get nervous about this issue, especially if they are concerned about carrying too much debt to qualify for a home loan. FHA loan rules governing how a borrower’s debt load must be reviewed by the lender are found in HUD 4000.1. One section titled “General Liabilities and Debts” states: “The Mortgagee must determine the Borrower’s monthly liabilities by reviewing all debts listed on the credit report, Uniform Residential Loan Application (URLA), and required documentation.” The basic answer to the question may depend on whether the lender is manually underwriting the mortgage loan or using the TOTAL system to evaluate the application. TOTAL is an “automatic” underwriting tool, and when using this tool, the lender is instructed as | more...

 
Do I need the consent of my non-borrowing spouse to get an FHA loan?

Do I Need The Consent Of My Non-Borrowing Spouse To Get An FHA Mortgage?

Do I need the consent of my non-borrowing spouse to get an FHA mortgage? That’s an important question, and the answer varies depending on the laws of your state. The rules governing this issue are found in the FHA loan handbook, HUD 4000.1. The section answering this question is short, but the implications will vary, again, depending on state law. But why? FHA home loans and other major lines of credit are often affected by state laws, including what are known as “community property laws”. If you reside in a community property state, that means that state law dictates how the debts incurred in a legal marriage are viewed legally. In community property states, spouses share the financial responsibility for all debts incurred for the duration of the legal marriage. | more...

 
FHA One Time Close Construction Loans: How They Work

FHA One-Time Close Construction Loans: How They Work

How do FHA One-Time Close construction loans work? These FHA mortgages are for borrowers who want to have a home built for them from the ground up rather than looking for an existing home to purchase and move into right away. Many participating FHA lenders offer these loans for “stick built” homes, which are homes built on-site (as opposed to a manufactured home which is delivered pre-built in sections and assembled). What are the rules for this type of FHA construction loan? From the FHA/HUD official site, we learn that a One-Time Close loan is also known as a “construction to permanent” loan. “A construction to permanent mortgage combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long-term permanent | more...

 
HUD Takes Measures To Speed Up Hurricane Recovery Efforts

HUD Announces Disaster Relief For Puerto Rico

In the wake of Hurricane Harvey and Hurricane Irma, the Department of Housing and Urban Development has made announcements about disaster relief as certain parts of the country become federally-declared disaster areas. The latest of these is a press release from HUD on relief efforts to Puerto Rico. According to a press release on the FHA/HUD official site, “HUD will speed federal disaster assistance to the Commonwealth of Puerto Rico and provide support to homeowners and low-income renters forced from their homes due to Hurricane Irma.” That assistance includes a 90-day moratorium on foreclosure action for FHA mortgages, the availability of FHA rehab loans for disaster victims, and more. According to HUD, these options can help those in the affected areas recover, rebuild, or purchase a new home to replace | more...