July 14, 2020

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Articles Tagged With: FHA Requirements

Why FHA interest rates are lower than conventional mortgage rates

Buying Land With An FHA Loan

There are several reasons why a house hunter looking for a home to purchase with a VA mortgage might want to buy a piece of land. In times when the housing market is favorably inclined towards new construction loans, some buyers might want a government insured loan for a proposed construction or new construction purchase; others might want to buy a piece of land for a manufactured home or mobile home.

FHA Appraisal Rules You Should Know Today

Can I Get an FHA Home Loan For a Commercial Property?

Can I get an FHA home loan for a commercial property? The answer to this question is more complicated than a simple yes or no-much depends on what local zoning laws will allow, and how “residential” the property is. FHA home loans are not just for typical suburban homes. There are a wide variety of house hunters, all looking for different types of properties to suit their needs, and there are plenty of options available aside from the suburban home. A two bedroom home in the suburbs may not be right for borrowers looking for a new home close to work in the city, or for those interested in a different type of residence than a standard house. FHA insured mortgages are available for condos, duplexes and manufactured homes. FHA | more...

First Time Home Buyers: Improve Your Credit With Credit Monitoring

Do First Time Home Buyers Have Different FHA Loan Requirements? Part Two

Do first time home buyers have different FHA loan requirements than those who have owned a home before? The short answer is no-FHA mortgages do not have different terms or requirements for different types of borrowers. First time home buyers may find that an individual lender or financial institution offers incentives for first time buyers, but these programs are not mandated or regulated by the FHA. The FHA loan FICO score minimum requirements, appraisal rules, regulations governing verification of down payment funds and other requirements are identical no matter who is applying. That is not to say that FICO scores and other financial qualifications don’t change how an FHA mortgage loan is handled-in that area borrowers will find different requirements depending on whether the borrower is deemed a good credit | more...

Protect Your Credit During The COVID-19 Emergency

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

How does FHA deal with a borrower’s financial hardship? That is a question we began addressing in a previous blog post, starting with an examination of the FHA attitude toward things like public assistance income, credit counseling programs, etc. In general, FHA loan rules do not allow borrowers to have public assistance income held against them as a liability, and participating in a credit counseling program is not grounds for denying an FHA mortgage loan. All income, including public assistance, must meet FHA loan standards for dependability and the likelihood of that income continuing. But just because the income is from public assistance, Social Security, etc. does not mean that income is not a valid means of financially qualifying for an FHA mortgage. Borrowers With Temporary Reductions of Income One | more...

FHA Cash-Out Refinance Loans For First-Time Home Buyers

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...

FHA Home Loan Rules For Verifying Your Credit History

How Do FHA Loan Requirements Work?

How do FHA loan requirements work? Do you know what you need in order to qualify for an FHA mortgage loan or FHA refinance loan? There are important details you should know about FHA mortgage loans that can help you make an informed decision about applying for one. FHA Loans Feature Lower Down Payment Requirements FHA loan down payment requirements include a minimum 3.5% down based on the adjusted value of the home. You won’t be able to get a zero-down payment FHA mortgage unless you are a qualified borrower applying for an FHA 203(h) mortgage for disaster victims in a federally-declared disaster area. 3.5% down is the minimum cash investment required. Some borrowers with low FICO scores may be required to put down 10% depending on their scores, lender | more...

Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

How Do FHA Loan Appraisals Work?

How do FHA loan appraisals work? This question is a vital one because some get the appraisal process confused with a home inspection and the two are not the same. The importance of an FHA appraisal in your loan process has to do with the lender getting information that helps calculate the fair market value of the home, while the home inspection gives the borrower information needed to make an informed purchase. FHA appraisals are governed by the rules in the FHA loan handbook, HUD 4000.1, which says the lender is required to, “order an appraisal from an Appraiser who is listed on the FHA Appraiser Roster and is qualified and knowledgeable in the specific market area in which the Property is located. The Mortgagee must evaluate the Appraiser’s education, | more...

Am I Required To Use Water Utilities For The Home I Buy With An FHA Mortgage?

Who Can Refinance An FHA Loan? Requirements You Should Know

Who Can Refinance An FHA Loan? We’ve been examining that question recently and according to HUD 4000.1, the FHA loan handbook, at least one borrower on the FHA refinance loan transaction must have legal title to the property. Under a section titled, “Borrower Eligibility”, we learn: “At least one Borrower on the refinancing Mortgage must hold title to the Property being refinanced prior to case number assignment.” But there is also, depending on the nature of the home to be refinanced, a requirement on the property type itself. HUD 4000.1 states: “For a transaction involving a Manufactured Home to be considered a refinance, the Manufactured Home must have been permanently erected on a site for more than twelve months prior to case number assignment.” What are some other FHA refinance | more...

what is mortgage insurance and how does it work?

What Is Mortgage Insurance And How Does It Work?

“What is mortgage insurance?” is a common question for those new to the home loan process. Do you understand how it works? It helps to define the two things referred to by industry professionals as mortgage insurance. There is mortgage insurance which the borrower pays for as a requirement of the FHA loan, then there is the “mortgage insurance” referred to in FHA loan rules which is something else entirely. Note: What we are discussing here is not hazard insurance, which may be a requirement on some, but not all FHA loans. FHA Mortgage Insurance For The Lender The FHA single family home loan handbook, HUD 4000.1, refers to “mortgage insurance” when discussing the FHA’s role in insuring the loan to reduce the risk for the participating lender. On page | more...

Happy Columbus Day 2019

2017 FHA Loan Home Requirements

What are FHA loan home requirements? How can you tell if a property meets FHA loan minimum standards? These are important questions to ask when planning for your new home loan. FHA loan home requirements are found in HUD 4000.1, the FHA single-family home loan handbook. HUD 4000.1 states that while all homes to be purchased with an FHA mortgage must pass the FHA appraisal process, doing so in no way acts as a guarantee that the home is free of defects. A borrower should understand that the FHA appraisal is for the lender, while a home inspection (optional but extremely important) is for the borrower. In general, FHA loan home requirements include rules which state that the roof must be in good repair, that the electrical and plumbing system | more...