Articles Tagged With: FHA Loans

When Is An FHA Loan Better Than A Conventional Loan?

July 28, 2026

FHA Minimum Property Standards: Encroachment, Power Lines, and Property Access

FHA loans come with Minimum Property Requirements (MPRs) designed to protect both the borrower and the lender by ensuring a home is safe, sound, and secure enough to serve as collateral for a government-backed mortgage. These standards guide how an FHA appraiser evaluates a property during the loan process, covering everything from how close a structure sits to the property line to how residents get in and out safely. Because MPRs shape the appraisal itself, a property that falls short in one of these areas can hold up financing until the issue is resolved. Understanding a few of the basics, encroachment, overhead power lines, and access to the property, can help buyers and sellers avoid surprises before closing. Encroachment An FHA appraisal looks closely at whether any part of the | more...

July 1, 2026

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

By Bruce Reichstein

Not every home loan applicant has the same type of employment, compensation, or schedule of compensation. That’s why FHA home loan rules include different instructions to the lender for a diverse range of income sources. FHA Loan Rules For “Primary Income” FHA loan rules have sections for hourly income, salary, and part-time income. The section that includes these guidelines states that the lender is responsible for examining earnings from the home loan applicant’s “primary employment” and defines it as follows: “Primary Employment is the Borrower’s principal employment, unless the income falls within a specific category identified below. Primary employment is generally full-time employment and may be either salaried or hourly.” “Current Pay” Versus “Projected Pay” According to FHA loan rules, applicants who earn a salary will generally have their current | more...

June 15, 2026

FHA Loan Rules For Part-Time Income

By Bruce Reichstein

FHA loan rules require the lender to verify employment and income. The lender must determine that a borrower’s income is stable, documented, and reasonably likely to continue. But what kinds of employment income can be used to qualify for an FHA mortgage? A reader once asked about a young borrower who held two receptionist jobs. One position had lasted more than two years at approximately 15 hours per week, while the second had lasted a little more than one year at approximately 20 hours per week. Could both incomes be used as qualifying income? The answer depends on how each job is classified and whether the income meets FHA requirements. Primary employment is the borrower’s principal job and is generally full-time, salaried or hourly. Part-time employment generally refers to work | more...

May 1, 2026

Appraisal Rules For FHA Loans: Basements & Crawlspaces

By Bruce Reichstein

When reviewing your closing checklist or simply trying to plan for all the expenses of your FHA home loan, the appraisal and the optional—but important—home inspection are two costs you may need to prepare for. An FHA appraisal is required for FHA-insured financing. A home inspection is generally optional unless the purchase contract, lender, or another applicable requirement calls for one. Even when it is optional, borrowers should strongly consider an inspection before deciding whether to purchase a home. FHA appraisal requirements are designed to help the lender determine whether the property meets FHA minimum property requirements and minimum property standards and whether it can serve as acceptable collateral for the loan. The appraisal is not a guarantee from FHA or the lender that the home is free of defects. | more...

January 12, 2026

FHA Loan Rules: Title Issues For Non-Borrowing Co-Owners and Spouses

By Bruce Reichstein

FHA Loan Rules: Title Issues for Non-Borrowing Co-Owners FHA loan transactions do not always involve every property owner being a borrower on the mortgage. In many cases, two or more people may hold ownership interest (be on title) to a property purchased with an FHA-insured loan, even though only one of those individuals applies for and qualifies for the mortgage itself. FHA policy allows for these arrangements, provided certain conditions are met. Non-Borrowing Owners and the FHA Mortgage Note Under current FHA guidelines, if two or more parties have an ownership interest in a property but only one party applies for and independently qualifies for the FHA loan, the non-borrowing owner is not required to sign the mortgage Note. The borrower who applies for the FHA loan is the only | more...

June 12, 2025

What To Think About When Comparing FHA Lenders

By Joe Wallace

Why do we say choosing the right lender for your FHA home loan is essential? Because no two financial institutions are exactly alike, you may find a lender willing to offer the type of mortgage you need at an affordable interest rate. But until you compare offers, how will you know if you have realistically set your price point and target interest rate? It’s not just whether the lender offers the type of FHA mortgage you need–such as an FHA condo loan or an FHA One-Time Close Construction mortgage. It’s also whether the lender is offering you a competitive interest rate. When rates trend higher, does your selected loan officer reprice the interest rates or up the closing costs instead? If you don’t know, you won’t know how to compare | more...

June 10, 2025

Is A Property Eligible for an FHA Mortgage Loan If It Has Asbestos?

By Bruce Reichstein

Borrowers interested in purchasing older properties using an FHA insured mortgage could face several challenges depending on the nature of the property. For example, some buildings insulated or otherwise constructed with asbestos products could pose a health hazard. FHA rules include minimum property requirements for safety, which address situations like these. Is a property eligible for an FHA loan if it has asbestos in it?

April 22, 2025

What One Credit Reporting Agency Says To Do About Your Credit Scores

By Joe Wallace

Your credit report and credit score are important factors in home loan approval. So what advice do the credit reporting agencies like Equifax, Experian, and TransUnion say you should do when planning to apply for a home loan? Knowing what credit score advice these three agencies offer is important–it’s good to think like a lender when applying for a large line of credit, and it is even better to think like the credit reporting agency in terms of what to do to prepare your credit ahead of your loan. What does Experian say about getting your credit ready for a home loan? Their official site reminds consumers that credit scores are an important aspect of home loan approval. However, those scores do not tell the entire story. Experian reminds us | more...

March 5, 2025

FHA ARM Loans

By Joe Wallace

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...

March 1, 2025

5 things to know about FHA Appraisals

By Joe Wallace

What do you need to know about FHA appraisals? There are plenty of details to be concerned with depending on the nature of the property you want to buy but some issues loom larger than others. FHA Appraisals Are Not Home Inspections That’s an obvious one. The FHA appraisal is meant as a tool for the lender and not the borrower. What’s not so obvious? The appraisal process does not require the appraiser to be an expert in all systems of the home. That means your roof may have problems the appraiser can’t identify, or the HVAC system might be experiencing symptoms unfamiliar to your appraiser. In some cases, the appraiser might not even set foot inside a building to be appraised. It’s not so hard to understand why you | more...