August 18, 2019

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Articles Tagged With: Real Estate

What Is An FHA REO Home?

What Is An FHA REO Home?

The FHA Real Estate Owned program or FHA REO program has gotten some media attention lately, which likely has more people wondering what exactly this program is. The HUD REO program, sometimes known as HUD Homes, is described on the FHA / HUD official site as “…a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim”. The HUD Home Store is the official HUD site used to list these HUD REO homes for sale to the public, real estate brokers, state and local governments and nonprofit organizations. What does the general public need to know about buying HUD REO homes? According to HUD, | more...

 
Home Repairs With An FHA Loan

What Are FHA Rehab Loans?

What are FHA rehab loans? Simply put, these are home loans you can apply for to buy or refinance a fixer-upper property. FHA rehab loans come as “standard” mortgages but there is also a special FHA rehab loan program for those who have homes located in a federally-declared disaster area. The FHA 203(k) Rehab Loan HUD 4000.1, the FHA loan handbook, describes the FHA 203(k) rehab loan as follows: The Section 203(k) Rehabilitation Mortgage Insurance Program is used to: -rehabilitate an existing one- to four-unit Structure, which will be used primarily for residential purposes; -rehabilitate such a Structure and refinance outstanding indebtedness on the Structure and the Real Property on which the Structure is located; or -purchase and rehabilitate a Structure and purchase the Real Property on which the Structure | more...

 
Mortgage Loan Interest Rates: What You Need To Know About Trends

What Is A One-Time Close FHA Construction Loan?

The FHA single family loan handbook tells us that FHA home loans are for a variety of different types of purchases including existing construction, “new construction” which means a home recently built but never occupied by an owner, and “proposed construction” loans which allows the buyer to apply for a loan to fund both the construction phase and the “permanent” phase of the mortgage. How do FHA construction loans differ from new purchase loans? Aside from the obvious (new purchase loans for existing construction move faster than construction loans do thanks to the lack of a construction phase for the existing construction loan) there are some important considerations to think about when contemplating your construction loan options. Is An FHA Construction Loan Right For Me? If you need to get into | more...

 
what is mortgage insurance and how does it work?

FHA Mortgages For Multi-Unit Properties

A reader asked us a question this week in the comments section about FHA mortgages for properties with multiple units. “I want to buy a 6 residential unit apartment building with a very small store front commercial space on the property (computer repair shop that takes up about 15% of the property space) I plan on living in one of the apartment units. Is there an FHA loan out there for this situation?” FHA mortgages under the single family loan program do allow FHA loans to qualified borrowers for multi-unit properties. The rules for these purchases are found in HUD 4000.1, which states: “FHAs programs differ from one another primarily in terms of what types of Properties and financing are eligible. Except as otherwise stated in this SF Handbook, FHAs | more...

 
Mortgage Loan Rate Trends

Mortgage Loan Interest Rate Trends: Up And Down

In our last report we noted that mortgage loan interest rate numbers could be influenced by the substance of the most recent Fed announcement, or more specifically investor reaction to those details. Rates did try to creep lower ahead of Wednesday’s Fed event, and Wednesday morning it seemed like rates were trying to move lower still. But the Fed came and went, rates began to move higher, and according to our sources at the end of the day on Wednesday we were right back to where things were at before the pre-Fed downward movement. Which is to say that rates have been moving up and down within a certain range without any real major, breaking news-type dramatic shifts. 30-year fixed rate mortgage loan interest rate numbers are in a best | more...

 

Seller Contributions on FHA Loans

A reader asks a question about seller contributions on an FHA mortgage loan. “What is included in seller contributions with a max of 6%?” The question refers to something informally known as the “six percent rule” on FHA mortgages, which limits the contributions of an “interested party” to six percent of the sale price of the home. This rule is found on page 232 of HUD 4000.1, which defines both interested parties and their contributions to the sale as follows: “Interested Parties refer to sellers, real estate agents, builders, developers or other parties with an interest in the transaction. Interested Party Contribution refers to a payment by an Interested Party, or combination of parties, toward the Borrowers origination fees, other closing costs and discount points.” What are the FHA loan | more...

 
Mortgage Loan Rate Trends

Mortgage Rate Trends: Mostly Unchanged?

The most current mortgage rate trends put us in a curious place at the moment-there are small changes, there is movement in rates, but our sources say much depends on the lender (both conventional and non-conventional) and how that particular financial institution is reacting to the current rate environment. As we’ll explore in a moment, FHA mortgage rates are in a range that is fairly atypical, at least in terms of the size of that range. Conventional rates are solidly in the bottom four percent zone, but there are factors this week that have the potential to influence that. Specifically, there are scheduled economic data releases this week including today’s (Monday) morning release of construction spending an a national manufacturing index. There’s a scheduled ADP employment report due out mid-week, | more...

 
What is an FHA cash-out refinance loan?

FHA Loan Amounts: A Reader Question

What are the minimum FHA loan amounts? A reader asked us a question in the comments section along those lines recently: “Is there a minimum amount for FHA Loans? Someone told me you have to borrow at least $90,000. Does the loan depend on your annual income?” FHA mortgages are not approved or denied based on the dollar amount of your annual income, but rather on your ability to afford the loan based on your financial obligations (including an estimate of your monthly mortgage payment) compared to your monthly income. Your debt-to-income ratio is more important in the loan approval equation. When it comes to FHA loan amounts, the minimum loan is based on the appraised value of the property or the asking price, whichever is lower. The FHA loan | more...

 

FHA Loans With A Non-Occupying Co-Borrower

How does having a non-occupying co-borrower affect your FHA mortgage? What happens if one of the borrowers decides they want a change in their status as occupying or non-occupying? A reader asked us a question along these lines recently in the comments section: “I just purchased my home in November 2016 with my husband’s uncle as a co-borrower (not living in the property). Now he is getting a divorce and his soon-to-be ex-wife wants the househe basically just helped me qualify of put the down payment to purchase and pay the mortgage on my ownhe even signed hes rights to the title the day we signed for the property is I was told. I could put in that paper after about 6 months of having the property but now I | more...

 

FHA Loan Rules For Part-Time Income

A reader asked us a question in the comments section this week about part-time income and how it may or may not qualify as verifiable income for an FHA loan. The reader asks: “My file is with the underwriter for review, they have asked for an VOE from my employer but they stated I work 16 hours a week (position hired into) but I always work more the 16 hr a week for the last 5-6 months and I’m going to continue to work more then that, they have already seen check stubs and both w2 from 2015 and 2016. Could this deny me for my loan?” We first have to determine what the FHA definition of part-time income. HUD 4000.1 gives lenders guidance in this area beginning with the | more...