October 17, 2017

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Articles Tagged With: FHA Loan Requirements

Can I get an FHA single family loan for a multi-unit home?

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...

 
Can I Add Energy-Efficient Upgrades To An FHA One-Time Close Construction Loan?

Can I Get An FHA 203(h) Rehab Loan With Bad Credit?

Can I get an FHA 203(h) rehab loan with bad credit? That question is a serious one in the wake of natural disasters such as Hurricane Harvey and Hurricane Irma. Borrowers who are in the process of fixing bad credit, catching up on their payments, or trying to improve their overall credit situation have enough to manage without the added complication of trying to repair or salvage a home damaged in a natural disaster. What are the FHA loan rules for credit qualifications when applying for FHA 203(h) rehab loans in federally-declared disaster areas? FHA Loan Credit Requirements For 203(h) Rehab Mortgages The FHA loan handbook, HUD 4000.1, instructs lenders processing 203(h) rehab loans and refinance loans to be as flexible as possible with credit requirements. That flexibility is governed | more...

 
Can I use disaster relief for my FHA loan down payment?

Can I Use Disaster Relief For My FHA Loan Down Payment?

Can I use disaster relief for my FHA loan down payment? That question is on the minds of many in the wake of hurricanes, forest fires, and other natural disasters. FHA home loans have a minimum required investment or down payment of 3.5% of the adjusted value of the home. Depending on circumstances including marginal credit scores, some transactions may require a higher down payment. But the down payment is required no matter what, and FHA loan rules state the down payment must come from approved sources. That means a borrower will be required to furnish the lender with information about the source of the FHA loan down payment. Borrowers can use cash saved at home, money from investments or savings clubs, even gift funds from approved sources. Those approved | more...

 
Can I Use A Power Of Attorney At FHA Loan Closing Time?

Can I Use A Power Of Attorney At FHA Loan Closing Time?

Can I use a power of attorney when it comes time to close my FHA loan? That may not be a common question per se, but for those this issue affects, the answer can affect how the entire closing process is handled. There are many reasons why a power of attorney might be needed to close a legally binding financial transaction such as an FHA mortgage. A borrower may be called away for an urgent work or family need, military duty could prevent the borrower from being physically present, injury or illness, etc. FHA loan rules address the power of attorney issue in HUD 4000.1, which begins on page 345 by stating: “A Borrower may designate an attorney-in-fact to use a Power of Attorney (POA) to sign documents on their | more...

 
Is There An FHA Loan For Homes On Tribal Land?

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...

 
Can I Use A Power Of Attorney At FHA Loan Closing Time?

Is There A One-Time Close FHA Construction Loan?

Is there an FHA construction loan? Let’s look at what the FHA single family home loan handbook (HUD 4000.1) says about these transactions: “FHA offers various mortgage insurance programs which insure approved Mortgagees against losses on Mortgages. FHA-insured Mortgages may be used to purchase housing, improve housing, or refinance existing Mortgages. Purchase/Construction to Permanent The Borrower may finance the purchase of an existing one- to four-unit residence, and may also finance construction of a one- to four-unit residence through a Construction to Permanent Mortgage. Properties to be acquired through an unrecorded land contract must be treated as a purchase.” That information is found on page 130 of HUD 4000.1. But some borrowers may be confused by this, having approached a lender only to be told “we don’t do FHA construction | more...

 
What Is An FHA Loan Appraisal

What Is An FHA Loan Appraisal?

What is an FHA appraisal? Simply put, it’s a tool used by the lender to make sure the property to be purchased with an FHA mortgage meets minimum standards. It’s also used by the lender to establish the fair market value of the property for the purpose of setting the proper FHA loan amount. FHA appraisals require a trained, impartial professional who is approved by the FHA. The lender and the appraiser do not “work together” in such a way that puts the appraiser in a compromising position by the lender. Instead, the appraiser is selected, she does her work and submits reports that detail the results of the appraisal. How do FHA loan appraisals work? The appraiser must visually inspect the property, noting any defective conditions, building code issues | more...

 
What Is An FHA Loan Limit?

FHA Loan Application Data: What You Should Know

The FHA single family loan program rule book, HUD 4000.1, has a variety of rules and instructions to the lender on how FHA loan application information is to be handled and processed. You might not think those rules affect you as an applicant, but some of the rules do pertain to how the lender must collect the borrower’s information and the approved sources of that information. Your credit scores and other data must be given to the lender from approved sources. Did you know that HUD 4000.1 does not permit the borrower to handle or transmit certain kinds of information to the lender? Your loan officer is responsible for making sure she gets the information from the proper sourcing. According to HUD 4000.1: “Mortgagees must not accept or use documents | more...

 

FHA Loans For Additional Homes: A Reader Question

Are FHA loans for multiple properties possible? That’s what’s on one reader’s mind recently. “So is there a maximum number of properties one can theoretically have under FHA guidelines?” “Say for example a person owns a home in one city with an FHA mortgage and then has to relocate to another city for job reasons. While in this city there family size increases by several individuals via marriage and or kids. Would that person be able to get a 3rd FHA? mortgage.” This reader question about FHA loans is in response to a blog post we did recently about the issue of applying for another FHA mortgage while currently paying on an existing FHA home loan. The gist of that post is that while FHA loan rules do not generally | more...

 
Do Section 8 Housing Vouchers Count For FHA Loans?

FHA Loans and Co-Signers: A Reader Question

A reader asked us a question about FHA loans and co-signers recently. “If I cosigned for a friend and he refinanced to get everything put in his name and me taken off, am I eligible for an FHA loan for my own home?” FHA mortgage loan requirements refer to co-signer arrangements and “contingent liabilities”. HUD 4000.1 says: “A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment. Contingent liabilities may include Cosigner liabilities and liabilities resulting from a mortgage assumption without release of liability.” If the reader’s circumstances meet that definition | more...