Articles Tagged With: First-time Home Buyer

July 25, 2024

HUD Proposes Final Rule on Sale of Delinquent FHA Mortgages

The U.S. Department of Housing and Urban Development (HUD) has proposed a new rule to oversee the sale of delinquent single-family mortgage loans insured by the Federal Housing Administration (FHA). This initiative aims to increase the availability of affordable housing and enhance community stability. According to HUD.giv, this move is part of the Biden-Harris Administration’s commitment to “expanding affordable housing options,” and the proposed rule is intended to assist struggling homeowners. Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon was quoted in a HUD press release about the proposed rule. Gordon notes the proposed rule is meant to create stability. It establishes standardized regulations for future delinquent home loan sales and prioritizes neighborhood stabilization. HUD has been experimenting with selling off delinquent mortgages since 2002. The July 2024 | more...

July 24, 2024

Budgeting And Saving For Your First FHA Mortgage

By Bruce Reichstein

When you decide to commit to buying a home or building one from the ground up using a one-time close construction loan, there are expenses you will need to save up for. If you haven’t started making a checklist of items you will need to pay for up front or choose to include in the loan amount, it’s a good idea to start making one as early as possible. Saving for your loan means identifying the expenses you will pay such as closing costs, appraisal fees, the home inspection fee, the FHA Up-Front Mortgage Insurance Premium, and of course the down payment. The down payment, which is a minimum of 3.5% of the adjusted value of the home, is one of the biggest expenses. That is one reason why it’s | more...

July 18, 2024

FHA Home Loans: What Kind Of House Can I Buy or Build?

By Joe Wallace

FHA loan rules in HUD 4000.1 include guidelines for lenders explaining what types of property are eligible, and what types are ineligible, for an FHA mortgage. You might not realize at first that an FHA mortgage can be used for properties other than typical suburban homes; FHA mortgages can be used to buy or build a typical family house, but also to purchase condo units, manufactured housing, and much more. Allowed Property Types For FHA Loans The list of property types you can choose from includes the previously mentioned types but also: You can buy existing construction, new construction that has never been occupied, or have a home built from scratch using an FHA One-Time Close construction loan. Some Property Types Aren’t Allowed What some don’t realize is that in | more...

July 17, 2024

FHA Loans: What To Do After Closing Day

By Joe Wallace

Buying your home with an FHA mortgage involves finding the right lender, making a down payment, saving for and paying closing costs, and taking the keys to your new home on closing day. However, it’s crucial to anticipate potential challenges that may arise after moving in. Did You Get A Home Inspection And An Appraisal? It’s highly recommended that you get a home inspection as a standard part of buying a house. Making the purchase contingent on the inspection and appraisal outcomes can offer protection that you won’t realize until long after closing the loan. While an FHA mortgage safeguards against lower appraised values through an “escape clause” for situations where the house appraises lower than the asking price, adding a contingency clause for inspection issues is wise. Inspectors might | more...

July 16, 2024

Do You Need Help Understanding Your FHA Loan?

By Joe Wallace

The variety of FHA home loan programs, including construction loans and reverse mortgages, can be overwhelming for many borrowers. HUD-approved housing counseling offers invaluable support to help borrowers make informed decisions about these complex programs. You can get a free referral to a HUD-approved housing counselor by calling 1-800-CALL FHA. FHA Loan Counseling: Your Path to Homeownership The Federal Housing Administration (FHA) insures mortgages, reducing lender risk and expanding access to homeownership for individuals with lower credit scores or limited down payment funds. However, understanding the nuances of certain FHA loans, such as reverse mortgages and construction loans, can be challenging. Did you know you can call HUD to get a referral to an approved housing counselor to help you through the process? Housing counselors can help you in the | more...

July 11, 2024

FHA 203(k) Rehab Loan Program Updates

By Joe Wallace

Changes are coming for those interested in remodeling a home with an FHA rehab loan. The Department of Housing and Urban Development, along with the Federal Housing Administration, have updated policies associated with the FHA 203(k) Rehabilitation Mortgage Insurance Program. These changes were implemented to modernize the program and make it a more helpful tool for individuals and families seeking affordable financing options for home renovation or rehabilitation projects. The FHA 203(k) program offers two loan variations: a “standard” 203(k) for major remodeling projects that may or may not include work on load-bearing walls. A “limited” 203(k) is available for smaller projects and for what the FHA determines to be “non-structural repairs.” Several fundamental changes have been made to aspects of the FHA 203(k) program. First, the total rehabilitation costs | more...

July 10, 2024

FHA Appraisals: When Are They Required?

By Joe Wallace

When is an FHA appraisal required? For any FHA purchase loan, you will be expected to pay for an FHA appraisal, even if it is an after-improvements approach for renovation refinance loans or similar options. We examine the other situations where an assessment may be needed below. FHA Streamline Refinance An FHA streamline refinance loan does not require an FHA appraisal. These refinance options are meant to provide a tangible benefit to the borrower through a lower monthly payment, a better interest rate, or switching to a fixed-rate loan from an adjustable-rate mortgage. Your participating lender may require an appraisal, which is permitted under FHA loan rules. However, no FHA requirements for appraisals exist for streamline refi loans in typical cases. FHA Reverse Mortgage Refinances FHA reverse mortgages, also known | more...

July 3, 2024

Planning Your First Home

By Joe Wallace

Are you looking for your first home? Applying for an FHA loan might seem intimidating, but there are some things you can do to help reduce those feelings of being overwhelmed by unfamiliar details. This is especially true in an age of confusing information about changing interest rates, modified credit qualifying standards, and options to save your home if disaster strikes. Start Early The key is to start early and plan ahead. Before you fill out loan application paperwork, consider making your planning phase for the loan last a year or more. This takes some immediate pressure off borrowers to save up for the down payment and closing costs. It also provides adequate time to work on your credit and cut your monthly debt. What other things can first-time home | more...

July 2, 2024

How To Qualify For An FHA Mortgage

By Joe Wallace

It’s likely the most commonly asked question about FHA loans. “How do I get approved for an FHA mortgage?” The answer starts with some numbers, but there are other important factors to remember. It’s not all about FICO scores, though they play a significant part in the lender’s decision to approve or deny a loan. FHA Loan FICO Score Requirements For Home Loan Approval If your FICO scores fall between 500 and 579, FHA loan rules say you must pay 10% down, assuming lender standards allow loan approval for those scores. Applicants with FICO scores of 580 or higher are required to make a 3.5% down payment. However, FICO scores aren’t the only factor that influences loan approval. Stable Income Rules If you are a typical college graduate, depending on | more...

June 27, 2024

What You Can Do With Your FHA Home Loan

By Joe Wallace

Borrowers sometimes assume things about home loan programs that aren’t entirely accurate. In the same way some assume that FHA single-family home loans can be used to buy an investment property (they cannot) or that the FHA loan program requires you to be a first-time home buyer, there are flawed assumptions about the kinds of home you can buy with an FHA mortgage and the acceptable uses of these home loans. FHA Loans To Build A Home The FHA One-Time Close construction loan is what borrowers choose when they want to build a home from the ground up. These FHA mortgages also allow land purchase with the loan if you don’t already have it to build on. FHA Loans Can Be Used To Install A Home FHA loans can be | more...