December 12, 2017

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Articles Tagged With: FHA Loan

FHA Loan Rules For Income Verification: Part-Time Employment Income

FHA Loan Rules For Income Verification: Part-Time Employment Income

Is it possible to be approved for an FHA home loan using part-time employment income? There are indeed FHA loan rules for this type of income and instructions to the lender for how it is to be reviewed. HUD 4000.1, the FHA home loan handbook, states that all verifiable income must meet certain FHA minimum requirements including the ability to verify two years of employment (not necessarily with the same employer). One area some borrowers may be concerned with in this area is part-time income. Does the FHA allow a lender to verify and count as income the earnings from a part-time job? The rules for this are found on page 200 of HUD 4000.1, which begins by defining what the FHA considers part-time income: “Part-Time Employment refers to employment | more...

 
FHA Loans And Charge-Off Accounts

FHA Loans And Charge-Off Accounts

Do you ever wonder about applying for an FHA Loan while having charge-off accounts in your credit history? Is it possible to get approved for an FHA home loan even though you have some negative credit information in your background? This is a question many ask, and the answer can be complicated depending on how old that negative credit data is, and whether or not it indicates an overall pattern of credit behavior. When you fill out an FHA loan application, your loan officer will need to examine your credit history, FICO scores, and other areas to determine your credit worthiness. Some borrowers come to the loan process with outstanding credit, others may have old issues or even currently disputed items on their credit reports that make them worry about | more...

 
Appraising the Foundation and Basement: FHA Loan Standards

Appraising the Foundation and Basement: FHA Loan Standards

What are the FHA loan standards for appraising the foundation and basement of a home to be purchased with an FHA mortgage? The FHA appraisal process is designed to insure that specific standards in this area are met. When problems are detected in an appraisal, they are noted for correction or other appropriate action. The appraisal process covers everything from the electrical system to the roof-the home and its various systems must be within a certain range of good repair and sustainability. For example, there can’t be exposed wiring in the home that would pose a hazard to the future occupants. The roof must not leak or otherwise allow moisture to enter the house. When it comes to the standards for foundations and basements, the FHA has a clear set | more...

 
FHA Loan Rules For Loan Approval: Federal Debts and Tax Liens

FHA Loan Rules For Loan Approval: Federal Debts and Tax Liens

FHA loan rules for loan approval include instructions to the lender about unpaid federal debts and tax liens. Your chosen participating FHA lender is responsible for verifying your income, employment record, and your monthly financial obligations-which may include tax obligations such as a lien, or a federal debt. Unresolved taxes and federal debt can be a serious issue that will affect a home loan application. The status of such debt is one of the most important factors. According to HUD 4000.1, “Mortgagees are prohibited from processing an application for an FHA-insured Mortgage for Borrowers with delinquent federal non-tax debt, including deficiency Judgments and other debt associated with past FHA-insured Mortgages.” The FHA loan rules in this section also add that the lender is required to determine “whether the Borrower(s) have | more...

 
FHA Loan Waiting Times After Chapter 13 Bankruptcy

FHA Loan Waiting Times After Chapter 13 Bankruptcy

We are often asked about FHA loan rules governing home loans for those with a bankruptcy on their credit reports. These types of questions vary, but often feature a common theme: “I had a bankruptcy discharged in July 2014. How long do I have to wait to purchase another home with 10% down payment with a credit score of 590?” After a bankruptcy is discharged, rebuilding good credit is one of the most crucial issues related to this question. A borrower must work hard, post-bankruptcy, to establish the best credit possible in order to qualify for a new home loan. You may find that participating FHA lenders are willing to work with borrowers with credit scores starting at around 620 or higher. That FICO score of 620 is not listed | more...

 
FHA Loan Rules: Using Rental Income to Qualify for a Mortgage Loan

FHA Loan Rules: Using Rental Income to Qualify for a Mortgage Loan

What do FHA loan rules say about using rental income to qualify for an FHA home loan? Is it possible to use rental income according to the FHA loan handbook, HUD 4000.1? The short answer is that it depends on whether or not the rental income meets FHA loan minimum standards. When processing your home loan application, your participating FHA lender will request copies (never originals) of the relevant paperwork associated with your employment and income, including tax documents, W2 forms, pay stubs, etc. If your income is derived in whole or in part by rent payments, the lender will need to see documentation for that, too. FHA loan rules in HUD 4000.1 address this on page 202, starting with the definition of what is considered rental income under the | more...

 
FHA Loan Questions: What Constitutes Flipping?

FHA Loan Questions: What Constitutes Flipping?

What constitutes flipping? It is a housing market practice generally discouraged by FHA loan rules found in HUD 4000.1, but what is flipping in the eyes of the FHA and HUD? According to the FHA loan handbook: “Property Flipping refers to the purchase and subsequent resale of a Property in a short period of time.” Also found in the FHA loan handbook, this further explanation of what the FHA considers to be property flipping: “Property Flipping is indicative of a practice whereby recently acquired Property is resold for a considerable profit with an artificially inflated value.” What is the basic FHA loan guideline for a transaction that could be identified as flipping? Situations where the home has been owned for 90 days or less. Some FHA loan rules in this | more...

 
FHA One-Time Close Construction Loans: Utilities

FHA One-Time Close Construction Loan Rules: Utilities

FHA loan rules for One-Time Close construction loans include a set of requirements the finished property, which must meet both state/local building code and FHA loan minimum property standards. Those FHA standards include a set of requirements for access, utilities, and water quality which must be met as a condition of loan approval. It’s surprising to some FHA loan applicants that certain features of a new construction home are A) regulated and/or B) allow things like septic tanks or wells. But not all properties are the same, and some construction issues are present in some housing markets that aren’t a consideration elsewhere. Well water is a great example. When a resident of a large metropolitan areas thinks of a new construction home, it’s likely that issues surrounding wells and well | more...

 
Can I get an FHA loan without a down payment?

Can I Get An FHA Loan Without A Down Payment?

Can I get an FHA loan without a down payment? That’s a question some ask after learning that some conventional mortgages require a minimum of 10% down, sometimes as high as 20% down. Is there such a thing as a no-money-down FHA mortgage loan? Down Payment Rules For FHA New Purchase Loans and Construction Loans All FHA forward mortgages (what you apply for to purchase a home) require a minimum down payment of 3.5% of the adjusted value of the property. There is one exception, and that is for FHA 203(h) rehab loans for disaster victims in federally declared disaster areas. The FHA 203(h) rehab loan requires NO down payment UNLESS it is used in conjunction with an FHA 203(k) rehab loan (which is for general use and not limited | more...

 
FHA Home Loan Rules For Salary, Hourly, Part-Time Income

How Do I Know If An FHA Loan Is Right For Me?

How do I know if an FHA loan is right for me? If you aren’t sure, consider some of the most important features of an FHA mortgage while making up your mind about the right home loan for you. FHA Loans Have Low Down Payment Requirements FHA mortgage loans have lower down payments than many conventional or other non-government backed mortgages. The minimum down payment for an FHA mortgage is 3.5% of the adjusted value of the home, and FHA loan rules permit you to get down payment help from approved sources. Credit scores play an important part in setting the down payment amount, so you’ll need to discuss your circumstances with your loan officer if you aren’t sure whether you qualify for the lowest down payment, but in general | more...