November 14, 2019

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Articles Tagged With: FHA Home Loan

FHA Home Loan Assumptions

FHA Home Loan Assumptions

Sometimes a homeowner decides they don’t want a particular home any longer. Some choose to sell, others choose to have their home loan assumed by another person, which is not quite the same as selling the home but has the same intended result–the new owner becomes financially responsible for the mortgage and the property. When you want to have your FHA home loan assumed, you’re required to get the participation of the lender in most cases. There are rules in HUD 4000.1 that govern loan assumptions, they begin with the agency’s definition of the term: “Assumption refers to the transfer of an existing mortgage obligation from an existing Borrower to the assuming Borrower.” Because of certain rule changes that affected the FHA loan assumption rules, HUD 4000.1 has a different | more...

 
HUD Announces New Partnership To Enforce FHA Loan Rules

HUD Announces New Partnership To Enforce FHA Guidelines

The Department of Housing and Urban Development has announced the signing of a Memorandum of Understanding (MOU) between the agency and the Department of Justice designed to provide guidance on pursuing disciplinary actions in cases brought against participating FHA lenders who may be in violation under the False Claims Act (FCA). “This agreement clearly outlines our FHA mortgage program requirements, so they do not impede or discourage lenders from offering affordable FHA-insured loans to credit-worthy borrowers,” according to one HUD official quoted in the agency’s press release. The United States Attorney General is also quoted in the press release adding, “”This MOU sets forth a robust and collaborative process for deciding when to pursue False Claims Act cases to remedy material and knowing FHA violations,” The agreement means HUD and | more...

 
FHA Home loan appraisal rules

New Housing Appraisal Rules? Not So Fast, FHA Loans

If you haven’t paid attention to recent headlines in the mortgage finance sector, you may not be aware that starting October 9, 2019, some house sales priced at or below $400,000 no longer require an appraisal. That news has some house hunters and home sellers jumping for joy. At least at first. Since the mid 1990s, appraisals have not been required for each and every home sale. Homes priced at or below $250 thousand may or may not have required an appraisal (more on that below), but over time, the numbers have shown that home prices have gone up significantly since then. Hence the move to change the appraisal threshold. The FDIC, in partnership with two other government agencies issued the proposal to increase the appraisal limit, the rule was | more...

 
FHA Home Loan Down Payment Rules

How FHA Loans Differ From Other Government-Backed Mortgages

There are several government-backed mortgage loan programs including FHA mortgage loans, VA loans, and USDA mortgages. What makes FHA mortgages different than VA or USDA home loans? How FHA Home Loans Work The FHA does not lend money to borrowers. Instead, it allows third party lenders who meet FHA standards to underwrite and process FHA mortgage loans, which have a percentage of the mortgage guaranteed by the government. That makes the potential losses to the lender lower should a borrower default on the mortgage. FHA home loans have lower credit score requirements, feature lower required down payments, and have borrower-friendly rules such as a requirement that there be no financial penalty for early payoff of the mortgage. FHA loans are backed by the government, making them a better deal for | more...

 
Homes You Can And Cannot Buy With An FHA Mortgage

Homes You Can And Cannot Buy With An FHA Mortgage

What kinds of homes can you purchase using an FHA mortgage loan? It does not matter whether you are a first-time home buyer or an experienced borrower, the FHA mortgage option (as well as FHA refinance loan options) are open to any financially-qualified borrower. Homes You Can Buy With An FHA Home Loan: Condominiums The FHA condo loan program was revised in 2019 to include the approval of qualifying individual condo units in projects not on the FHA approved list. That means that it is easier to find a purchase a condo unit with an FHA mortgage. Some believe condos to be closer to the luxury side of real estate buying, but condo units are popular, especially in larger metropolitan areas. The FHA loan program allows borrowers to purchase condo | more...

 
FHA Loans In Special Flood Hazard Areas

FHA Mortgages In Special Flood Hazard Areas

The FHA lender’s handbook, HUD 4000.1, has instructions for the lender to make sure properties to be purchased with an FHA mortgage aren’t located in certain zones. The lender is also tasked with insuring that if the home is located within certain flood hazard areas that the appropriate hazard insurance is obtained as a condition of loan approval. One such zone is the Special Flood Hazard Area or SFHA. HUD 4000.1 instructs the lender to insure that a home is located in an SFHA as declared by FEMA. “The Mortgagee must obtain flood zone determination services, independent of any assessment made by the Appraiser to cover the Life of the Loan Flood Certification” where applicable. But in general, there are some areas where an FHA mortgage simply is not possible | more...

 
How to Get A Loan Estimate

How To Get A Loan Estimate

Have you found a house you want to buy with an FHA mortgage loan? If you don’t know how to request a home loan estimate, there are plenty of resources for you to learn. A home loan estimate can help you compare lenders and decide which is the right one for you. It may include a breakdown of closing costs, interest rates, and the monthly payment and is generally helpful for borrowers trying to decide how much loan to apply for, how much down payment to make, etc. It’s never good to simply apply for the loan with the first mortgage lender you find; consumer watchdog agencies like the Consumer Financial Protection Bureau (CFBP) advise borrowers to identify several participating lenders and request loan estimates from all of them. “Contact | more...

 
If Your Home Was Damaged In A Federally Declared Disaster Area

If Your Home Was Damaged In A Federally Declared Disaster Area

Do you know what your FHA loan options are for recovering from natural disasters in federally-declared disaster areas? FHA home loan options include loan forbearance, FHA Rehab loans to replace or repair a damaged home, refinance options, and much more. The FHA, HUD, and FEMA all urge those who are affected to contact their loan officers immediately. It is never safe to assume any offered relief measures are automatic; you must usually make arrangements to get assistance, disaster relief, etc. Those who had properties secured by conventional mortgages at the time of the disaster may still be able to get help by applying for an FHA Rehab loan (mentioned above) that is specifically meant for those in federal disaster areas. FHA 203(h) loans (specifcially for disasters) can be used in | more...

 
FHA Loans For Buying, Building, Or Assembling A Home

FHA Loan Appraisals: Different Rules For Different Homes

FHA loan appraisals have different standards depending on the type of property you wish to buy. That doesn’t mean that some homes get favorable treatment in the appraisal process than others. What it does mean is that some properties have unique issues. For example, an appraisal for an FHA condo won’t be the same as for a manufactured home. One reason? Manufactured homes do not start off with permanent foundations, and having one is a requirement. A condo unit does not face such problems, so there is a specific appraisal requirement for manufactured housing that such homes be affixed to a permanent foundation that meets FHA and federal standards. A condo unit is already on a foundation, so the requirements there have more to do with the state of the | more...

 
How Job Changes Affect Your Mortgage Loan Application

How Job Changes Affect Your Mortgage Loan Application

How do job changes affect your FHA mortgage loan application and chances for loan approval? Many first-time borrowers need to know this due to personal circumstances; it’s true that FHA home loan rules require the lender to verify two years of employment and it’s also true that an FHA borrower does not have to be with the same employer for two full years to be considered for an FHA mortgage. But what are the consequences of a job change in the FHA home loan process or immediately before a home loan application? If the job change is an upwardly mobile move that benefits the borrower and still meets FHA loan income requirements (for stability and the likelihood of the job to continue) there should be little to no negative effect | more...