October 16, 2019

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Articles Tagged With: FHA Mortgage Loans

Will FHA Loans Let Me Rent Out My Home?

Will FHA Loans Let Me Rent Out My Home?

Will FHA loan rules allow you to rent out the property you purchase with an FHA mortgage? There are many who wish to buy a home to start working as a landlord, but if you wish to do this with an FHA mortgage, there are certain restrictions you will need to know before you commit. Many home loans have specific requirements; a borrower may be permitted to buy an investment property with certain kinds of home loans (not FHA) but the trade off may be higher interest rates, more restrictive terms and conditions (depending on the lender), and penalties for early payoff of the mortgage. Being a Landlord With An FHA Home Loan With an FHA home loan, you are permitted to be a landlord as long as you occupy | more...

 
What You Should Know About FHA Home Loan Amounts

What You Should Know About FHA Home Loan Amounts

Do you know what affects your FHA home loan amount? There are factors that the borrower controls such as whether to make the minimum required down payment or pay more down up front; there are also factors that are in the lender wheelhouse such as the amount of the origination fee and other closing costs. Not all of these factors automatically result in a different home loan amount. Some may be required to be paid up front in cash, others may permit financing in whole but not in part. Still, other expenses may not be required of all transactions but may apply to yours. You may find that in some housing markets, a charge or expense that is reasonable and customary may not be common in other housing markets. Some | 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...

 
HUD Announces Expanded Disaster Relief Options

HUD Announces Expanded Disaster Relief Options

The FHA and HUD have announced expanded disaster relief measures for those in federally declared major disaster areas. The changes (see below) must be implemented no later than November 30, 2019 but may be used by lenders right away. The FHA and HUD advise these changes will be reflected in a pending update of the FHA Single-Family Loan Handbook, HUD 4000.1. On Thursday, August 29, 2019, the Federal Housing Administration announced in a press release that the agency is, “expanding its foreclosure prevention options to allow borrowers in Presidentially Declared Major Disaster Areas (PDMDAs) with delinquent FHA-insured mortgages to bring their mortgages current without increasing their interest rates or principal and interest payments.” This is an expansion/enhancement of a temporary measure announced in 2018; Mortgagee Letter 2018-01 “temporarily amended” FHA/HUD | more...

 
Issues That Affect FHA Home Loan Approval

Issues That Affect FHA Home Loan Approval

There are some issues that can affect FHA home loan approval but don’t automatically mean the loan will be denied. Borrowers should be aware of the rules in the FHA single-family home loan handbook, HUD 4000.1 that tell a lender when more attention is needed for a specific loan application. For example, did you know there are two basic types of home loan approval processes? One is a more automated process that happens when the lender uses the Automated Underwriting System (AUS) to review the loan. AUS can be used for borrowers that don’t have certain complications with the loan; borrowers that do have certain issues with their application may find the lender is required to “downgrade” to a “manual” underwriting process that requires more scrutiny on the borrower’s financial | more...

 
Will FHA Loans Let Me Rent Out My Home?

FHA Home Loan Rules And Fair Housing Laws

We report on Fair Housing cases from time to time, a reminder to those looking for housing that there are federal laws that protect against discrimination in housing. But what are the FHA home loan rules in this area? Did you know that the FHA loan program has specific instructions to the lender regarding Fair Housing laws? Those instructions are found in HUD 4000.1, the FHA Single-Family Home Loan Handbook. Page 120 of that handbook instructs the lender, “The Mortgagee is required to comply with all federal, state and local laws, rules, and requirements applicable to the mortgage transaction, including all applicable disclosure requirements and the requirements of the Consumer Financial Protection Bureau (CFPB), including those related to:  Truth in Lending Act (TILA); and  Real Estate Settlement Procedure Act (RESPA).” | more...

 
Home Loan Credit Advice From Credit Bureaus

Qualifying For An FHA Home Loan With Disability Benefits

FHA home loan rules permit the use of disability benefits to financially qualify for the loan. All income used in the lender’s debt ratio calculations must be verifiable, which means it must be a stable source of income and is likely to continue. Some borrowers worry that their disability income won’t be counted for the purposes of loan approval, but if that income meets FHA standards, there shouldn’t be any problem. Those standards are found in HUD 4000.1 and start with a basic definition: “Disability Benefits are benefits received from the Social Security Administration (SSA), Department of Veterans Affairs (VA), other public agencies, or a private disability insurance provider. “ These benefits must continue for at least three years into the mortgage to be counted as verifiable income. The lender | more...

 
FHA Home Loan Rules About Borrower Debt

FHA Home Loan Rules About Borrower Debt

Do you know what your lender is required to do when you fill out an FHA mortgage loan application? Part of the lender’s job is to make sure that the loan applicant can realistically afford the new home loan, and making that determination means reviewing your current debt. HUD 4000.1, the FHA Lender’s Handbook for single family mortgages, has instructions for the lender in this area. It begins stating the lender’s responsibilities: “The Mortgagee must determine the Borrower’s monthly liabilities by reviewing all debts listed on the credit report, Uniform Residential Loan Application (URLA), and required documentation.” How is that accomplished? “All applicable monthly liabilities must be included in the qualifying ratio. ” Your lender will calculate your debt ratio using one method that includes only your current debt, and | more...

 
FHA Home Loan Rules For Refinance Loans

FHA Home Loan Rules For Refinance Loans

When headlines about home loan interest rates start appearing with the terms “new lows” or “lowest in months”, the minds of many home owners turn to refinancing. It’s very tempting to explore refinance loan options when rates begin falling; saving more money over the lifetime of the refinance loan is appealing and some borrowers feel they didn’t shop around aggressively enough for a better interest rate the first time around. When you are getting ready to refinance, what do you need to keep in mind in terms of FHA refi loan rules? Here are some areas to ponder. Basic Refinance Loan Transactions FHA refi loans come in a few basic types according to the FHA Lender’s Handbook, HUD 4000.1: Cash-out refinances: designed to pull equity out of the Property. No | more...

 
Can I Buy Investment Real Estate With An FHA Mortgage?

Can I Buy Investment Real Estate With An FHA Mortgage?

This is a question on the minds of many and the issue definitely has some nuances. The FHA lender’s handbook HUD 4000.1 states “Investment Properties are not eligible for FHA insurance.” But what is the FHA definition of an investment property and how flexible are these guidelines? To understand what constitutes an investment property, we have to examine what the FHA considers as an acceptable purchase and what is considered an investment property. FHA mortgages are intended for owner-occupiers. At least one borrower obligated on the mortgage must live in the home as the principal residence. FHA loan rules require this to happen “within a reasonable time” after the loan closes and that time is often considered 60 days unless other arrangements are made. FHA loan rules do permit, if | more...