October 23, 2017

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Articles Tagged With: FHA Mortgage

How does FHA deal with a borrower’s financial hardship?

How Does FHA Deal With A Borrower’s Financial Hardship?

How does FHA deal with a borrower’s financial hardship? That is an important question, and the answers may surprise some who expect the same types of financial qualifications from FHA mortgages as from conventional loans. What is the reality? Basic FHA Loan Financial Requirements FHA loan FICO score minimums are 580 and higher for maximum financing and the lowest down payment. Lenders may have higher requirements, but the FHA minimum FICO score allows those who wouldn’t be considered for a conventional mortgage. Debt-to-income ratio requirements for FHA mortgage loans (which may vary depending on FICO scores) will vary some among lenders, too but you’ll find that your total payments must not (generally speaking) exceed 43% of your monthly income. How Does FHA Deal With Financial Hardship? Depending on the nature | more...

 
HUD Secretary Ben Carson On Hurricane Harvey Disaster Relief

HUD Secretary Ben Carson On Hurricane Harvey Disaster Relief

The head of the Department of Housing and Urban Development has written an open letter to the victims of Hurricane Harvey discussing the FHA/HUD outreach to affected areas and options for disaster relief. According to the FHA/HUD official site, HUD Secretary Ben Carson addressed those in the federal disaster areas in Texas stating, “HUD is tasked with comprehensive, long-term disaster relief and has been working on the front lines in Texas. We are your ear on the ground and your voice in Washington, and we are committed to providing a compassionate and effective response.” Secretary Carson’s remarks included options for those recovering from Hurricane Harvey. “We are currently locating vacancies and moving displaced residents into safer housing.” “We are also working closely with homeless shelters and with temporary shelters, ensuring | more...

 
Credit Score Issues and FHA Loans

Credit Score Issues and FHA Loans

Do you know how credit score issues affect your FHA home loan application? For most borrowers, there’s no such thing as a new purchase loan with no credit check; The FHA loan handbook (HUD 4000.1) instructs the lender that credit score checks for FHA mortgage loan applications are mandatory except in certain instances such as for FHA Streamline Refinance loans, and other transactions as described on page 158: “The Mortgagee must review the credit report to determine the Borrower’s Minimum Decision Credit Score (MDCS), except for Mortgages to be insured under Section 247, Section 248, Streamline Refinances, and Assumptions. The MDCS will be used to determine the maximum insured financing available to a Borrower with traditional credit.” HUD 4000.1 adds that FHA loan applicants who have non-traditional or insufficient credit | more...

 
HUD announces disaster relief

HUD Announces Disaster Relief For Virgin Islands, Georgia

The Department of Housing and Urban Development (HUD) has announced disaster relief for parts of Georgia and the U.S. Virgin Islands. As more parts of the United States and its’ protectorates are affected by hurricanes and tropical storms, many of those areas are being declared federal disaster areas and as such become eligible for certain aid from HUD, FEMA, and other agencies. The disaster declaration for St. Thomas and St. John islands, plus Camden, Chatham, and Glynn counties in Georgia mean that the FHA “activates a mortgagee letter making a variety of insured loan programs available for disaster victims and putting into play use of special loan servicing and underwriting requirements” according to the FHA/HUD official site. What options are available in these areas? According to HUD, those directly affected | more...

 
HUD announces disaster relief for Florida.

HUD Announces Disaster Relief For Florida

In the aftermath of Hurricane Irma, the Department of Housing and Urban Development has announced disaster relief measures for Florida following a presidential declaration of federal disaster areas in the state. According to a press release on the FHA/HUD official site, the following counties are now recognized as federal disaster areas: Broward, Charlotte, Clay, Collier, Duval, Flagler, Hillsborough, Lee, Manatee, Miami-Dade, Monroe, Palm Beach, Pinellas, Putnam, Sarasota and St. Johns counties. According to the release, HUD offers a variety of relief options to those in the affected areas including (but not limited to) the following: A 90-day moratorium on foreclosures and “forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages”. Making Section 203(h) loans available to those in the counties listed above. The 203(h) program “provides FHA insurance to | 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...

 
Can I get an FHA loan for a home in a flood zone?

What Happens To My FHA Appraisal If I Switch Lenders?

What happens to my FHA appraisal if I switch lenders? It does happen-sometimes a borrower starts with one company but decides to switch lenders. There are many reasons why this could happen; a better set of terms and conditions offered elsewhere, a change of mind, etc. It is definitely possible to switch participating FHA lenders before the transaction reaches a certain point, but what if the appraisal has already happened? FHA loan rules found in HUD 4000.1 anticipate such issues, and addresses them starting on page 127, which begins by saying that the lender is required to transfer the appraisal to the new lender within five business days. In cases where a Borrower has switched Mortgagees, the first Mortgagee must, at the Borrower’s request, transfer the appraisal to the second | more...

 
Why is peeling paint an issue for the FHA appraisal?

Why Is Peeling Paint A Problem For The FHA Appraisal?

Why is peeling paint an issue for the FHA appraisal? Isn’t this just a cosmetic issue? That’s a very common question in some housing markets-those buying homes with FHA mortgages should know why this can be an issue that requires correction as a condition of FHA home loan approval. The Age Of The Property Is An Important Factor FHA loan rules specify that properties that have peeling paint issues have specific actions required depending on the age of the home. According to HUD 4000.1, the FHA loan handbook, “If the Property was built before 1978, the seller must disclose any information known about lead-based paint and lead-based paint hazards before selling the house, in accordance with the HUD-EPA Lead Disclosure Rule (24 CFR 35, subpart A, and the identical 40 | more...

 
What Kind Of Home Can I Buy With An FHA Loan?

What Kind Of Home Can I Buy With An FHA Loan?

What kind of home can I buy with an FHA loan? That is an important question-not everyone is looking for a typical suburban home. Some people are interested in farm homes, condos, town homes or duplexes, or manufactured housing. What does the FHA loan handbook, HUD 4000.1, have to say about what can be purchased with an FHA mortgage? FHA Single Family Loans For Owner/Occupiers FHA single-family loans are intended for owner-occupiers who intend to use the home as their primary residence. There are some exceptions to this (we will cover those in another blog post), but for most transactions, borrowers must own/occupy the home as their main address. FHA Single Family Loans For Multi-Unit Properties Buyers can purchase homes they intend to occupy even if those homes have more | more...

 
HUD Issues Announcement On HECM Loan Policy Changes

HUD Issues Announcement On HECM Loan Policy Changes

The Department of Housing and Urban Development has issued a mortgagee letter detailing changes to the FHA loan HECM program (also known as FHA Reverse Mortgage program) effective for all case numbers assigned on or after September 19, 2017. According to Mortgagee Letter 2017-11, the changes affect how participating lenders proceed in cases where there has been a loan default for “unpaid property charges” and the sale of property secured by an FHA HECM that has been declared due and payable. According to the FHA/HUD official site, for cases where unpaid property charges cause a HECM loan to go into default, new guidance to lenders includes the following: “If a Borrower is unable or unwilling to repay the Mortgagee for any Mortgagee funds advanced to pay property charges, the Mortgagee | more...