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Articles Tagged With: FHA Handbook

HUD

FHA Loan Limits in 2017 Corrected

FHA loan limits for 2017 were posted on the FHA/HUD official site recently, but the Federal Housing Administration has updated the original post with a correction. According to an FHA mortgagee letter, “Mortgagee Letter 16-20 set Federal Housing Administration forward mortgage limits for calendar year 2017, but indicated incorrect ceiling limits for Alaska, Hawaii, Guam, and the Virgin Islands, which are special exception areas which allow for higher construction costs.” That’s according to Mortgagee Letter 2016-25, which adds the “the correct forward mortgage limit ceiling for those special exception areas”. The Mortgagee Letter is quick to add that there are NO CHANGES for FHA loan limits, including those in the special exception areas. According to the new mortgagee letter: “While ML 16-20 referenced incorrect ceiling limits for the special exception | more...

 

FHA Loan Basics: A Reader Question

A reader asks, “I really don’t understand why i have to pay PMI and MIP. I had credit problems a bankruptcy in 2013 , it was recorded and its been almost 4 years and my score is 709 that the middle score i have hardly no debts, 6% of income. I was told I have to pay the MIP up front of 1.75% and also 240 PMI monthly with mortgage. That’s a little too much, is there a way out of this? I also did not want taxes and insurance added, I’m putting 3.5 percent down. My loan officer said I had to pay the insurance and add taxes to my loan.” It’s not entirely clear from this reader question whether the loan is an FHA mortgage or not, but | more...

 

Appraisal Rules For FHA Mortgages, Reverse Mortgages

FHA home loans require an appraisal, which is designed to determine the fair market value of the home, but also to insure the property meets FHA minimum standards. While the appraisal must not be considered an inspection (and passing the appraisal is not a stamp of FHA approval or a guarantee that a home is free of problems), the FHA appraiser is required to report problem conditions may be spotted during the process. What does this mean? HUD 4000.1 states, “The Appraiser must report known environmental and safety hazards and adverse conditions that may affect the health and safety of the occupants, the Propertys ability to serve as collateral, and the structural soundness of the improvements.” This is found on page 491, which also adds the following description/definition of hazards: | more...

 

FHA Loan Rules: Special Forbearance For Unemployed Home Owners

When a borrower applies for an FHA mortgage, experiencing financial trouble isn’t top-of-mind; qualifying for the loan, making the down payment, and moving in are likely the big issues most think about when applying. But financial difficulties can and sometimes do come, so what can a borrower do if he or she finds themselves unemployed after purchasing a home with an FHA mortgage? FHA loan rules in HUD 4000.1 do permit the lender to offer something known as “special forbearance” or SFB for unemployed borrowers who are in danger of missing payments, going into loan default, etc. “The SFB-Unemployment Agreement is a written agreement between a Mortgagee and the Borrowers, one or more of whom has become unemployed, allowing for reduced and/or suspended Mortgage Payments.” This is an arrangement negotiated | more...

 

FHA Loan Questions: Appraisal Concerns

A reader asks, “I am about to put my house on the market. But now I’m starting to worry about a crack on the basement floor that has been there since I bought the house, I never worried about the crack, its due to the house settling to one side years ago. Other than that the house is structurally sound and basement is very dry. I think the house dips about 3/4 inch. Is this something that would cause an inspection to fail?” There are several issues that can make questions like these difficult to answer. The first is to remind borrowers and sellers alike that an FHA appraisal is NOT an inspection, nor does passing the FHA appraisal process equal an FHA stamp of approval on a property that | more...

 

FHA Revises HECM Policy To Include Third Party Tax Verification Fee

FHA loan rules for Home Equity Conversion Mortgages (HECM) have been modified by the agency to include approval of third party fees for property tax verification. According to FHA Mortgagee Letter 2016-10, the third party fees will be added to the list of approved charges associated with FHA HECM loans, but the verification fees must meet FHA requirements. “A Third Party Property Tax Verification Fee is a fee charged to the mortgagee by a third party to verify the mortgagors property tax payment history and the annual amount of property taxes due for a specific property” states the FHA Mortgagee letter. “FHA is adding the Third Party Property Tax Verification Fee to the list of allowable charges and fees that may be paid by the mortgagor.” According to the mortgagee | more...

 
Who can qualify for an FHA loan?

FHA Loans and Bankruptcy

A Few Words About Bankruptcy from FHA.com on Vimeo. Some borrowers want to know how credit issues such as foreclosure, Chapter 7 bankruptcy, and Chapter 13 bankruptcy can affect their ability to get an FHA mortgage loan or refinance loan. While those who have been through such proceedings may have a better understanding of what happens to your credit, many who are facing the option of filing bankruptcy, going into loan default and foreclosure, or even doing a deed-in-lieu of foreclosure may not understand what’s at stake. The video above explains some basics about bankruptcy. But how does bankruptcy in particular affect your ability to get an FHA loan? Like foreclosure and deed-in-lieu, filing bankruptcy usually requires a mandatory “seasoning period” or waiting time between the bankruptcy and the new | more...

 

FHA Loan Questions: The Good Neighbor Next Door Program

A reader asked us a question recently in the comments section about the HUD Good Neighbor Next Door program. “I am a 13 year veteran Corrections Officer of the Maryland’s DCSCS and I wanted to inquire as to whether or not I qualified for the Good Neighbor Next Door Program.” The HUD Good Neighbor Next Door program is mentioned on the FHA/HUD official site, which states, “Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your | more...

 
What happens to my FHA loan in a natural disaster?

FHA Reverse Mortgages: Payout Options

Recently we wrote about proposed changes to strengthen the FHA Reverse Mortgage loan program and about basics of the FHA Reverse Mortgage program. We left off with a promise to discuss how the reverse mortgage, also known as an FHA Home Equity Conversion Mortgage (HECM), pays out once the loan has closed. A HECM borrower’s payout (also known as a disbursement) depends on the nature of the HECM loan. The rules for cash back to the borrower differ based on whether the borrower has a fixed interest rate HECM loan or an adjustable rate HECM. The FHA/HUD official site states that borrowers who have adjustable rate HECM loans are eligible for the following payment options: Tenure-equal monthly payments as long as at least one borrower lives and continues to occupy | more...

 

Understanding FHA Appraisals

Whether you’re purchasing a suburban home, a town home, manufactured home or condo, all properties must be appraised before the loan can be approved. The appraisal process and its requirements may vary depending on whether the home is under construction, is considered new construction, or is termed “existing construction”, but in all cases the property must meet minimum FHA standards also know as MPRs and MPS. HUD 4000.1 explains the appraisal process: “The Appraiser must observe, analyze and report that the Property meets HUDs MPR and MPS. Minimum Property Requirements (MPR) refer to general requirements that all homes insured by FHA be safe, sound, and secure. Minimum Property Standards (MPS) refer to regulatory requirements relating to the safety, soundness and security of New Construction.” “Every Property must be safe, sound, | more...