May 24, 2018

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Articles Tagged With: FHA

FHA Loans, Wells, And One Time Close Construction Loans

FHA Loans, Wells, And One Time Close Construction Loans

Borrowers who apply for FHA loans may not be clear on whether or not a property served by a well instead of being connected to the local utility is eligible for an FHA mortgage. Is the presence of a well a problem for FHA loan approval? And what about FHA loan standards for FHA One Time Close construction loans? HUD 4000.1 contains guidelines for these issues including the acceptability of a property served by a well instead of a water utility. Borrowers will be relieved to know that FHA mortgage rules do not automatically rule out a property just because a well is present, but that well must meet both FHA minimum requirements and any applicable health code or other local ordinances. For One Time Close construction loans, FHA loan | more...

 
FHA loans for self-employed borrowers

FHA Loans For Self-Employed Borrowers

Are there FHA home loans for self-employed borrowers? There’s a persistent myth about FHA loans and self-employment; that working for yourself is a serious disadvantage when it comes to home loan approval. What’s the reality? FHA Home Loans Are Available For Financially Qualified Self-Employed Borrowers FHA loan rules in HUD 4000.1 state that being self-employed is an acceptable form of primary income as long as that income meets certain criteria. Borrowers will be required to furnish tax returns, business plans, profit-and-loss statements and other documentation as required by the lender to verify income. It may take some extra time to gather all the required information your lender needs, but you should come to the application or preapproval process knowing how your income has changed over time. Self Employment Minimum Requirements | more...

 
FHA Construction Loans And Other Government-Backed Mortgages

FHA Construction Loans And Other Government-Backed Mortgages

House hunters looking for government-backed mortgages (as opposed to conventional mortgages which may have higher down payment requirements and other features) have a variety of options to choose from. Are you in the market for an FHA construction loan such as the FHA One Time Close construction mortgage? Do you need to build instead of buy? FHA One Time Close Construction Loans Borrowers who choose the FHA One Time Close mortgage are applying for a single mortgage loan covering both the construction phase and the mortgage itself. These loans are for those who want to build a home from the ground up, and there are additional requirements for these loans regarding escrow, inspections, and when mortgage payments are scheduled to being. One Time Close (OTC) loans from participating FHA lenders | more...

 
FHA home loan occupancy requirements

FHA Home Loans And Occupancy Requirements

What are the occupancy requirements for FHA home loans? Like many government backed loans, there are general occupancy requirements a borrower must follow as a condition of loan approval. Whether you are buying an existing construction home or having one built for you using an FHA One Time Close construction loan, some guidelines for occupancy will apply. FHA Definition Of Occupancy, Principal Residences FHA loan occupancy rules basically require that the borrower live in the home full time, using it as the primary residence or principal residence instead of a vacation home, time share, or other intermittent occupancy arrangement. How does the FHA specifically define “principal residence”? According to HUD 4000.1: “A Principal Residence refers to a dwelling where the Borrower maintains or will maintain their permanent place of abode, | more...

 
FHA Loans, Wells, And One Time Close Construction Loans

FHA Loan Rules For Appraisals: What Borrowers Need To Know

What do borrowers need to know about FHA loan appraisal rules? We field reader questions every month that include queries about the appraisal process and whether or not a certain type of condition is permitted in a home to be purchased with an FHA mortgage. Some recent reader questions go along these lines: “Is an unfinished basement acceptable in a home I’m buying with an FHA mortgage?” “Does the garage have to be wired for electricity in order to be approved for an FHA loan? and, “The home I want to buy is served by a well instead of being connected to a local utility. Is this permitted?” There are some FHA loan rules for appraisals that may address some or all of these issues, but there’s a very important | more...

 
FHA Home Loan Approval And Your Credit Report

FHA Home Loan Approval And Your Credit Report

What do potential home loan borrowers need to know about FHA loans and credit reports? There are some very simple things that some don’t realize going into the home loan process that can definitely affect your participating FHA lender’s ability to approve your mortgage. FHA Loan Credit Checks The lender is required by FHA home loan rules to pull a loan applicant’s credit reports to review credit scores, credit history, and look for overall patterns of reliable use of credit. However, some borrowers mistakenly assume that the lender will look at a credit report once, make the notes, and never go back to the credit report again. This is not necessarily the case. Your FHA lender is charged with making sure that a borrower’s credit position is stable and that | more...

 
VA One Time Close Construction Loan Tips

VA One Time Close Construction Loan Tips

There are plenty of VA One Time Close construction loan tips you should know about-probably as many as for FHA One Time Close loans or the USDA equivalent. Did you know that the size of your project could affect your ability to get a no-money-down VA home loan? Or that you should discuss the amount of time your VA OTC loan might take with the seller of the land if you are purchasing land and building the home? Know these issues before you apply for best results when you are ready to commit to your VA construction loan. VA One Time Close Construction Loans Require A Contractor VA loan rules for construction loans require the borrower to hire an outside contractor rather than trying to do the work personally. The | more...

 
One Time Close Mortgages: Choices To Consider

One Time Close Mortgages: Choices To Consider

There are many options to consider when planning a One Time Close (OTC) construction loan. Borrowers who want a home built for them from the ground up can choose between FHA One Time Close, USDA One Time Close, and VA One Time Close construction loans. These three programs have some basic differences. VA OTC mortgages allow qualified borrowers to apply with no money down. USDA construction loans may also permit the borrower to apply without the expectation of a down payment, but these construction loans are only for rural areas with populations of up to 35,000 according to a 2017 USDA fact sheet about the program. One Time Close Construction Loans: Occupancy Required Choices between the VA, USDA, and FHA construction loan program basically involve the type of borrower you | more...

 
FHA 203(k) Rehab Loans: What's A Contingency Reserve?

FHA 203(k) Rehab Loans: What’s A Contingency Reserve?

If you are interested in buying or refinancing a home to renovate with an FHA mortgage, the FHA 203(k) loan is a great place to start exploring your options. The FHA 203(k) rehab loan comes in two varieties-one for larger and more ambitious projects, and a smaller “limited” 203(k) that offers smaller loans for simpler repairs/renovations. The 203(k) loan involves hiring contractors and having work done according to both FHA home loan minimum standards, but also requires that the home be brought into compliance with applicable building codes. Lender standards, state law, and FHA home loan rules will affect how this transaction is conducted. One FHA requirement is the FHA rehab loan contingency reserve, which you can think of as a “rainy day fund” in case there are unexpected costs | more...

 
FHA One Time Close Construction Loans: Location Matters

FHA One Time Close Construction Loans: Location Matters

Location matters when you are applying for an FHA One Time Close construction loan. These mortgages are for borrowers who don’t want to purchase an existing property but want a home built for them from the ground up, but FHA One Time Close construction loans, (FHA OTC) do have some restrictions on where a home can be constructed. These restrictions aren’t as difficult to understand as you might think; FHA loan officers are required to insure the home as an economic and functional life that will last the duration of the mortgage. Part of that due diligence is making sure the home is capable of withstanding environmental conditions and/or not being put directly in harm’s way due to know problems. That’s one reason why the FHA loan rules for home | more...