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Articles Tagged With: FHA Home Loan

FHA and HUD

FHA Loan Approval Rules For First-Time Home Buyers

FHA home loans are often misunderstood. Some think they are need-based loans like some offered via the USDA program, while others believe FHA mortgages can only be approved for first-time home buyers. Typically, we write that FHA mortgages do not actually offer extra perks for first-time buyers, but there is a new exception to that notion you should know about. What kind of exception? In 2022, HUD made a policy change and issued a mortgagee letter announcing that in 2022 the FHA would allow participating lenders to consider positive rental history as a factor in home loan approval. Typically, such rental verification is not a part of most credit reports provided for FHA-insured products that require credit approval and “when provided,” rental verification, “generally exists as separate documentation” the lender | more...

 
FHA loans

Housing Market Improvements And Your FHA Home Loan in 2023

Are you looking at 2023 and considering your home loan options to buy a house with an FHA mortgage? There is news from the housing sector that could mean improved conditions for a home loan in the new year.  While it’s true that changes in the housing market don’t happen overnight, some mortgage blogs and news outlets are reporting that the typical time houses spend on the market is increasing. Thats a good sign considering how competitive the housing market was last summer. Is this the only indication that conditions may be improving for house hunters? Demand for houses seems to be falling and home loan interest rates are showing signs of gradual improvement. This could make 2023 a much better time to shop for a house than the summer | more...

 
Mortgage Trends

Credit Score Rule Changes For Mortgage Loans

On October 24, 2022, the Federal Housing Finance Agency (FHFA) announced its approval for participating lenders to use both the FICO 10T and the VantageScore 4.0 credit score models by Fannie Mae and Freddie Mac. These options would replace the previous use of “traditional” FICO score model Fannie and Freddie lenders use to approve the loans.  Why are we discussing Fannie and Freddie in an article about FHA home loans? There is a possibility that this move could wind up affecting other lending programs, especially if more borrowers choose Fannie Mae and Freddie Mac loans as the result of the changes. Other government loan programs may follow suit in the future, and in the case of FHA mortgages, some changes are already underway. These changes do not happen overnight. There | more...

 
FHA Home Loan

Important Features To Consider When Shopping For A New Home

Are you new to house hunting? There are things to look for when considering homes to buy with an FHA mortgage. These are features that often may enhance the home and make it more efficient. Once you are used to shopping around for a home, you can establish a checklist to remind you as you review each property. Ceiling Fans Not all homes come with ceiling fans. Are you buying a home in a warmer or more humid climate? A lack of ceiling fans can be a drawback; homes that do not have them installed might have other issues such as mold or mildew, but this will depend greatly on how the individual house was maintained. Exterior Lighting Exterior lights can provide additional safety, and not just to prevent burglaries | more...

 
Planning To Buy A Home? Credit Resources You Need

Buying A Home When Interest Rates Are High

Are you considering your FHA home loan options? You aren’t alone if you’re considering the option of waiting to buy until mortgage rates drop from current highs. How high have the rates gone? In the closing days of October 2022, the New York Times reported interest rates hit the 7% range for the first time since 2002. Do you worry that such high rates are here to stay? You couldn’t be blamed for thinking it’s a safer bet to hold off on buying a home right now. The Fannie Mae Housing Forecast for 2022 includes the possibility that mortgage loan interest rates might settle into the four percent range sometime at or near the second quarter of 2023. If that becomes a reality, could we see an increase in interested | more...

 
Planning To Buy A Home? Credit Resources You Need

FHA ARM Loans

There are many types of different FHA loan products. You can apply for new purchase home loans, refinance loans, and even Home Equity Conversion Mortgage loans (HECM). But even with this variety of options to choose from, did you know you can apply for purchase or refinance loans guaranteed by the FHA that have adjustable interest rates? It’s true–the FHA Single-Family Home Loan program offers both fixed-rate mortgages and adjustable rate home loans. The FHA official site has an entire page dedicated to Adjustable Rate Mortgages (also known as ARM loans). Here’s how the FHA/HUD official site defines the ARM Loan: “An ARM is an Adjustable Rate Mortgage. Unlike fixed-rate mortgages that have an interest rate that remains the same for the life of the loan, the interest rate on | more...

 
Mortgage Trends

FHA Home Loans And Rising Interest Rates

Many potential borrowers wonder why mortgage loan interest rates are rising? While it may be true that FHA rates may be lower than some conventional mortgage loans, in a rising mortgage rate environment even government-backed mortgages will see rate increases. Why do rates go up in terms of overall cause-and-effect? Mortgage loan interest rates can rise for a number of reasons including changes in market conditions, investor reaction to those changes, breaking news at home and abroad, and government financial policy changes. All of these can directly or indirectly affect rates. At the end of September 2022, there was an increase in interest rates bringing them to the highest levels some have seen in years. The cause of these recent increases? You can thank an increase in the Federal Funds | more...

 
Who is eligible for an FHA Home Loan?

Why Choose An FHA Mortgage?

You may have heard that the FHA loan program features a low minimum down payment, lower credit requirements, plus the ability to apply for extra loan funds to add energy-saving improvements to the home you are buying with an FHA loan. This is accomplished using a program called the FHA Energy Efficient Mortgage. FHA home loans, which are NOT for first-time home buyers only, are offered to all financially qualified applicants. These home loans, unlike some of their USDA counterparts, are not need-based and do not feature income restrictions. FHA mortgages are government-backed loans, which means there is an arrangement between the lender and the federal government that reduces the risk to the lender. This is why FHA lenders can offer you lower down payments and more competitive interest rates | more...

 
FHA and HUD

FHA Appraisal Rules For Systems In The Home

In 2016, we published an article about FHA loan appraisal rules for certain systems in the home. FHA appraisals have rules governing the process including some that address specific systems in the home. Make no mistake: some FHA appraisal requirements depend on the local authority, while other requirements have specific guidance. Depending on the issue your experience may vary. As we noted in 2016, FHA appraisal rules are found in HUD 4000.1, which is the rule book for all FHA single-family mortgage loans, refinancing, and reverse mortgages. Where heating the home is concerned, FHA loan rules include the following:  “The Appraiser must examine the heating system to determine if it is adequate for healthful and comfortable living conditions, regardless of design, fuel or heat source.” The installed system must have | more...

 
FHA Home Loan

Article Update: FHA Loan Rules On Late And Missed Payments

Back in 2017, we published an article asking an important question. Is it possible to get an FHA loan application approved with late or missed payments on your credit report? Borrowers can get bogged down with financial difficulty in the best of times. In an economic environment that includes rising gas and utility costs, inflation, and employment woes this threat is greatly elevated. Back in 2017, we didn’t have the pandemic to worry about, but in more recent times this factor has severely complicated many people’s finances. If you get caught up in a struggle with common financial problems you may find some of the simplest situations–we are talking about late and missed payments on your recurring financial obligations–can have the biggest impact on a borrower’s credit rating or perceptions | more...