Articles Tagged With: FHA

May 1, 2026

Appraisal Rules For FHA Loans: Basements & Crawlspaces

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 16, 2026

FHA Loans and Your Credit History: One Critical Factor Borrowers Often Overlook

By Bruce Reichstein

If you are planning to apply for an FHA home loan, your credit profile plays an important role in the approval process. Many borrowers focus on avoiding new credit inquiries, paying down balances, or checking FICO® scores. While those steps matter, there is one often overlooked factor that can significantly influence FHA loan approval: Your recent payment history on all financial obligations. Under FHA underwriting guidelines, lenders evaluate a borrower’s overall pattern of managing credit, not just their credit score. This includes how consistently financial obligations have been paid over time. While the FHA does not publish a strict rule requiring 12 months of perfect payment history, most FHA lenders place strong emphasis on the most recent 12 months when evaluating borrower risk. Late payments during this period—especially on housing-related | more...

January 7, 2026

FHA Appraisal Rules On Peeling Paint

By Bruce Reichstein

Does peeling paint cause FHA loan problems? Yes—peeling paint can delay or prevent FHA loan approval, depending on the age of the home and the severity of the condition. FHA appraisal rules treat defective paint as a potential health and safety issue, not merely a cosmetic concern. Why FHA Appraisers Flag Peeling Paint FHA appraisal standards focus on: Borrower safety / Property durability and Loan collateral protection Peeling, chipping, or flaking paint can signal deeper problems and must be evaluated carefully. FHA Peeling Paint Rules for Homes Built Before 1978 Homes built before 1978 fall under federal lead-based paint regulations. If peeling paint is present: The appraiser must require repairs, lead-safe work practices must be used and repairs must be completed before FHA loan endorsement. Sellers must disclose known lead | more...

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...

December 19, 2024

Bad Credit And FHA Home Loan Options

By Joe Wallace

The term “bad credit” tends to feel a bit stigmatizing. Borrowers who have had past difficulty with credit have it hard enough trying to recover from the stigma of their previous credit issues without being confronted by those problems every time they want to start working on their credit. Is there such a thing as a bad credit FHA loan that can help people become homeowners and get a fresh start with credit? Technically the answer is, “it depends”, which isn’t very reassuring. But the truth of the matter is, there are FHA standards that technically make the concept of a bad credit mortgage a reality. After all, on paper FHA loan rules state that a borrower with FICO scores in the 500 range could still technically qualify for an | more...

November 7, 2024

Will Your FHA Home Loan Be Approved?

By Joe Wallace

Will your FHA home loan be approved or denied? There are several reasons why your loan application could be turned down, and some of those reasons have more to do with the property than with the borrower’s credit history or FICO scores. And in some cases, getting turned down for a mortgage is the borrower’s fault due to credit history or FICO score issues. But what about when the borrower’s credit, employment, and other qualifying factors are acceptable to the lender, but the home loan application is turned down anyway? For some, it could be a question of the property’s condition, location, or type. Location Counts Some don’t realize at first that to be approved for an FHA residential home loan, the property cannot be situated within a specific range | more...

October 18, 2024

When Can I Refinance An FHA Loan?

By Bruce Reichstein

When can I refinance an FHA loan? That is a common question and one that is addressed in the FHA loan handbook, HUD 4000.1. There are rules that govern how and when you can refinance your home loan and those rules will vary depending on the type of refinance loan you seek. Most FHA home loans, including refinance loans and even reverse mortgages, require occupancy as a condition of loan approval. In the case of FHA Cash-Out Refinance loans, occupancy is necessary for at least one year before the new loan. From HUD 4000.1: “Cash-out refinance transactions are only permitted on owner-occupied Principal Residences. The Property securing the cash-out refinance must have been owned and occupied by the Borrower as their Principal Residence for the 12 months prior to the | more...

September 26, 2024

FHA Home Loans: Why You Want To Haggle With The Seller

By Bruce Reichstein

Many first-time home buyers hate the idea of negotiating, haggling, or otherwise trying to adjust the price of the home with a seller. In a seller’s market there’s not much negotiating possible, it’s true. But when conditions are more favorable for the borrower, negotiating may be to your advantage. Why Should A First-Time Home Buyer Be Willing To Negotiate With The Seller? The most apparent reason to haggle with the seller of the real estate you want is to get a lower price. This becomes even more crucial if the appraisal comes back lower than the property’s asking price. The buyer cannot be forced to close the deal in cases where the home’s appraised value is lower than the asking price. The FHA home loan itself will be issued for | more...

September 10, 2024

Bankruptcy Versus FHA Loan Approval

By Joe Wallace

Declaring bankruptcy, either Chapter 7 or Chapter 13, impacts your credit standing. Though it might be a necessary financial step, it disrupts your normal financial activities, including getting a mortgage. But is declaring bankruptcy the end of your ability to buy a new home? Not necessarily. Thanks to “seasoning periods” a borrower waits out after bankruptcy to be declared fit to borrow to buy a home, bankruptcy doesn’t permanently bar you from buying a home. Before discussing the waiting periods for mortgage loans, let’s differentiate between Chapter 7 and Chapter 13 bankruptcies: Chapter 7 Bankruptcy This involves liquidating your non-exempt assets to pay off creditors. While it provides a quicker resolution, it can negatively affect your credit score for up to a decade. Chapter 13 Bankruptcy This allows those with | more...

August 15, 2024

Fixing Credit Before Buying A Home

By Joe Wallace

When preparing to buy a house, it’s essential to give yourself plenty of time to improve your FICO scores and ensure a strong history of on-time payments before applying for a mortgage. However, there are other crucial aspects of credit repair to consider. To begin a credit repair journey, it helps to understand how credit reporting procedures work. Credit reports, which are compiled by major credit bureaus like Equifax, Experian, and TransUnion, contain comprehensive records of your credit history. This includes your private data, such as your current and former addresses, Social Security Number, and information on your credit accounts. There may also be information in your credit file from public records. Do you have a bankruptcy in your past? That will show up on your report along with any | more...