October 16, 2019

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Articles Tagged With: FHA Loan Questions

HUD Brings Fair Housing Act Charges Against New York Landlord

HUD Announces Findings In Illinois Housing Fraud Investigation

The Department of Housing and Urban Development has announced its’ findings related to the investigation of allegations of housing fraud by a Cook County couple. According to a press release by HUD, “… a Cook County, Illinois couple committed fraud by accepting housing assistance they were not qualified to receive in order to rent a property they jointly owned.” HUD had conducted an investigation into a married couple’s attempts to get rental assistance for a property they own in Matteson, Illinois. HUD alleges that in 2006 the couple, Korey Sloan and Christie Caldwell, and their four children “sought rental assistance from the Housing Authority of Cook County (HACC) to lease the home from Sloan, who posed as an unrelated landlord”. HUD further states that Caldwell “denied any relationship” with Sloan | more...

 
Issues That Affect FHA Home Loan Approval

FHA Loan Rules: Can The Seller Provide Appliances As Part Of The Sale?

FHA home loan rules in HUD 40001. state that a seller can make contributions as an incentive to a buyer considering the purchase of the seller’s property with an FHA mortgage. But those contributions are limited to six percent of the purchase price. Anything more constitutes something known as an inducement to purchase. The FHA loan rules don’t penalize the borrower or seller for this per se, but anything deemed an inducement to purchase will result in a dollar-for-dollar reduction in the loan amount based on the financial value of those inducements (which, again, are in excess of six percent of the purchase price.) All that said, FHA loan rules also exclude certain seller contributions from consideration under the six percent rule; the seller can freely add certain things without | more...

 
FHA Loan Credit Advice

Late or Missed Payments and FHA Loan Applications

Is it possible to get an FHA loan application approved with late or missed payments on your credit report? It’s easy to get caught up in a struggle with common financial problems, and some of the simplest situations (late and missed payments on financial obligations) can have the biggest impact on a borrower’s credit rating or perceptions of creditworthiness. Having a handful “lates” and/or missed payments in your recent credit history might not affect your overall financial bottom line IF you’re not planning to seek new lines of credit. But if you are planning to apply for a home loan in the 12 months following late or missed payments, this situation becomes far more important. FHA loan applications, like other major lines of credit, are affected by anything that changes | more...

 
Can I Finance My FHA Loan Up Front Mortgage Insurance Premium?

Can I Get An FHA Mortgage After A Short Sale?

Can I get an FHA loan after a short sale? Many have asked this question, unsure of the FHA loan rules for transactions in the wake of a negative credit event such as a foreclosure, bankruptcy, or short sale. To begin, we should address the basic definition of a short sale and what that means for a potential FHA borrower. What Is A Short Sale? A short sale involves a transaction where a property is sold to avoid foreclosure, often at a loss. It is referred to professionally as a “pre-foreclosure sale”. FHA loan rules in HUD 4000.1 specifically define the short sale transaction as follows: “Pre-Foreclosure Sales, also known as Short Sales, refer to the sales of real estate that generate proceeds that are less than the amount owed | more...

 
Can I buy a manufactured home with an FHA loan?

What Does “Legal Restrictions On Conveyance” Mean?

What does “legal restrictions on conveyance” mean? It’s a question some borrowers won’t need to ask, but it is one that can and often does affect some transactions-especially where condo loans are concerned. FHA loan rules require the property that is purchased with an FHA loan to be “freely assumable”. That basically means there can be no limits imposed on the owner of the property on selling or otherwise disposing of the property. The lender is required to make sure there are no legal restrictions on the borrower in this way. What kind of restrictions do we mean here? One type is the “right of first refusal” found in some condo owner association agreements. Depending on the wording of such agreements, the owner may be required to allow the condo | more...

 
What Is An FHA Loan Limit?

What Is An FHA Loan Limit? Part Two

What Is An FHA Loan Limit? We’ve been exploring this question-in our previous blog post we looked at the basics of FHA loan limits. According to the FHA/HUD official site, “The maximum mortgage amount that FHA will insure on a specific purchase is calculated by multiplying the appropriate LTV percentage by the Adjusted Value. In order for FHA to insure this maximum mortgage amount, the Borrower must make a Minimum Required Investment (MRI) of at least 3.5 percent of the Adjusted Value.” FHA loan limits are set by the National Housing Act and will vary depending on the housing market. Some areas are low-cost markets, some are high-cost, and others are simply “average”. But what does that mean for the typical FHA loan applicant? The FHA loan handbook, HUD 4000.1, | more...

 
How FHA Loan Modification Works

How FHA Loan Modification Works

In our previous blog post, we discussed some of the basics of FHA foreclosure avoidance and loan modification. But how does FHA loan modification work? FHA HAMP, also known as the FHA Home Affordable Modification program is a way for home owners to avoid foreclosure through a permanent loan modification. But in order to become eligible for FHA HAMP, borrowers have to meet certain criteria as described on the FHA/HUD official site. Who is eligible to apply for FHA HAMP? “Mortgagors with FHA-insured mortgages that do not qualify for other loss mitigation programs and with adequate debt-to-income ratios. Homeowners must successfully complete a trial payment plan before becoming a full participant in the program.” The trial payment plan is the key to the success of the borrower’s involvement with HAMP. | more...

 
Happy Holidays 2018

What Is An FHA Loan Modification?

What Is An FHA Loan Modification? According to the FHA loan handbook, HUD 4000.1, such modifications are part of a loss-mitigation program from the FHA and HUD designed to help FHA borrowers avoid foreclosure and keep their homes. HUD 4000.1 states that FHA loan modification is available through a program called FHA-HAMP, or the FHA Home Affordable Modification Program. “The use of an FHA-HAMP Option is to both alleviate the Borrower’s burden of immediate repayment of arrears and to adjust monthly payments to a level sustainable by the household’s current income. The FHA-HAMP Option may or may not include a Partial Claim.” A “partial claim” is defined in the FHA loan rules as follows: “The total amount available is the lesser of: (1) the unpaid principal balance as of the | more...

 
What Can I Improve With An FHA 203(k) Mortgage?

What Can I Improve With An FHA 203(k) Mortgage?

An FHA 203(k) mortgage is basically a rehab loan, which can be used as a new purchase loan or a refinance loan for the purpose of repairing/rehabbing an eligible property. The FHA single family home loan handbook, HUD 4000.1, has a list of requirements and guidelines for FHA 203(k) loans, which includes a set of allowable improvements as well as a list of things FHA loan money cannot be used for. Let’s examine what is permitted with an FHA 203(k) loan first. Borrowers who are approved for an FHA rehab loan may use the loan for any of the following projects acceptable to the lender: – costs of construction, repairs and rehabilitation; – architectural/engineering professional fees; – the 203(k) Consultant fee subject to the limits in the 203(k) Consultant Fee | more...

 
FHA Loan Approval and Late or Missed Housing Payments

When Is An FHA Loan A Good Idea? Part Two

When is an FHA loan a good idea? There are plenty of new purchase options, but those who have existing home loans and want to refinance into lower payments or interest rates should also explore their FHA mortgage options. FHA Loans Are For Those Who Want To Refinance FHA Loans Borrowers with existing FHA mortgage loans should consider the FHA Streamline Refinance loan option. This type of FHA refi loan does not offer money back to the borrower (except for refunds of money paid up front for things that later get financed into the loan amount) but does require a benefit to the borrower in one of several forms: A lower monthly payment A lower interest rate A fixed rate (when refinancing out of an adjustable rate mortgage loan) There | more...