FHA Appraisal Requirements – Best FHA Lender, fha mortgage requirements.#Fha #mortgage #requirements


FHA Appraisal Requirements

Over the past couple of years, I have heard numerous real estate agents steer people away from FHA mortgages. Some have stated in their MLS listings that the seller will not accept a buyer with FHA financing and others have told buyers that it isn’t a good idea to get an FHA loan. All of this because they think that FHA appraisal requirements are too tough.

Yes, this used to be quite true. FHA is the first to admit that historically their appraisal requirement heavily stressed the repair of minor property deficiencies.

However, this has changed.

FHA now permits an “as-is” appraisal for homes being financed with FHA loans that have minor property deficiencies resulting from deferred maintenance and normal wear and tear. In fact, the current FHA appraisal requirements have been in place since January 1, 2006

FHA Appraisal Requirements General Rules to Remember

For an easy reference to FHA Appraisal Requirements, think of the two S’s .

Safety – FHA underwriting guidelines require that lenders review the appraisal to see if the appraiser has made note of property conditions that will affect the health and safety of the occupants.

Soundness – FHA underwriting guidelines require that lenders review the appraisal to see if the appraiser has made note of property conditions that jeopardize the soundness and structural integrity of the property.

When an FHA appraisal is done on a home, they are looking to make sure that their aren t any safety hazards and that the house is structurally sound.

In Mortgagee Letter 05-48, FHA provides the following examples of minor property conditions that do not require automatic repair for existing properties:

  • Missing handrails
  • Cracked or damaged exit doors that are otherwise operable
  • Cracked window glass
  • Defective paint surfaces in homes constructed post 1978
  • Minor plumbing leaks (such as leaky faucets)
  • Defective floor finish or covering (worn through the finish, badly soiled carpeting)
  • Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of unrepaired structural damage
  • Rotten or worn out counter tops
  • Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post- 1978
  • Poor workmanship
  • Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)
  • Crawl space with debris and trash
  • Lack of an all weather driveway surface

FHA also provided the following list of conditions that will require automatic repair for existing properties:

  • Inadequate access/egress from bedrooms to exterior of home
  • Leaking or worn out roofs (if 3 or more layers of shingles on leaking or worn out roof, all existing shingles must be removed before re-roofing)
  • Evidence of structural problems (such as foundation damage caused by excessive settlement)
  • Defective paint surfaces in homes constructed pre-1978
  • Defective exterior paint surfaces in home constructed post-1978 where the finish is otherwise unprotected.

These lists are not meant to be all inclusive, but they give clear guidance on the issues that are and are not a concern to FHA.

If you are interested in buying a house and you want to use an FHA loan for financing, don t let common misconceptions about FHA Appraisal Requirements misguide you.

IMPORTANT MORTGAGE DISCLOSURES:

When inquiring about a mortgage on this site, this is not a mortgage application. Upon the completion of your inquiry, we will work hard to match you with a lender who may assist you with a mortgage application and provide mortgage product eligibility requirements for your individual situation.

Any mortgage product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the mortgage credit product.

When applying for a mortgage credit product, lenders will commonly require you to provide a valid social security number and submit to a credit check . Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved for mortgage refinancing.

Minimum credit ratings may vary according to lender and mortgage product. In the event that you do not qualify for a credit rating based on the required minimum credit rating, a lender may or may not introduce you to a credit counseling service or credit improvement company who may or may not be able to assist you with improving your credit for a fee.

Mortgage.info is not a government agency or a lender. Not affiliated with HUD, FHA, VA, FNMA or GNMA. We work hard to match you with local lenders for the mortgage you inquire about. This is not an offer to lend and we are not affiliated with your current mortgage servicer.

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FHA Loans Requirements, Guidelines, Limits and Mortgage Rates – Ultimate Guide – Lending Expert Blog,


fha mortgage requirements

Fha mortgage requirements

FHA Loans Requirements, Guidelines, Limits and Mortgage Rates Ultimate Guide

Fha mortgage requirementsFind out about requirements (including credit scores), guidelines, rates, loan limits, how to qualify and how to apply for an FHA Loan.

This post is limited to qualifying for FHA loans as a home buyer First Time or repeat. Click on this link if you are interested in reading about FHA Streamline Refinance.

What is an FHA Loan?

Federal Housing Administration (FHA) Loans are insured by Housing and Urban Development (HUD) which allows lenders to offer low downpayment loans to homebuyers like you. FHA loans have been helping people become homeowners since 1934. FHA insures loans for first time home buyer mortgage loan, FHA streamline refinance, FHA regular refinance, Cash-out refinance and also home purchase by people who are NOT first time home buyers. FHA however doesn t provide loan directly. You need to work with an FHA approved lender like Arcus Lending to qualify for the home purchase or refinance loan.

What is the credit score requirement for an FHA Loan?

While FHA guidelines allow for much lower credit scores, most of the lenders require a minimum of 640 fico score.

How to qualify for an FHA Loan?

You need to meet the following basic requirements for qualifying for an FHA loan (this is not an exhaustive guideline and a particular lender may even have their own set of guidelines):

  • Property must be owner occupied.
  • FHA loans are available for 1-4 units houses including single family residence, town-homes, condominiums and even manufactured homes.
  • A minimum downpayment of 3.5% is required. The downpayment can be gifted from parents, children, siblings or other close relatives.
  • Impound account is required on all FHA loan. As part of impound account, payment for property taxes and home insurance are broken down into monthly payments and are paid to the lender along with mortgage payments every month. The lender then makes a payment directly to county or your home insurance company when its due.
  • A two years employment history is required. However, if you went to school immediately prior to starting your employment, the school years can be counted towards two years requirement as long as your job is in the same field as your education.
  • You should have enough income to meet the maximum debt to income ratio requirement of 43%. In some cases, that ratio can be allowed to as high as 50%.
  • Upfront mortgage insurance (UFMIP) of 1.75% and annual mortgage insurance of 0.25% 0.65% is required on all FHA loans. For mortgage insurance premium rates and calculator, check this post.
  • FHA offers 30 year fixed, 15 year fixed and 5 year ARM loan.

What are FHA Loan limits?

For 2017, the FHA national floor loan limit for 1 unit house is $275,665. This means that all counties in the country will at least have this as their loan limit. FHA also classified several counties as high-cost meaning the loan limits in those counties are higher than $275,665. The maximum loan limits in some counties can be as high as $636,150 and in other counties it s between the floor i.e. $275,665 and the highest loan limit i.e. $636,150. Click here to find out the FHA loan limit for your county.

How to apply for an FHA Loan?

To get an FHA loan you need to work with an FHA approved lender. If you want to work directly with me to get pre-approved or get a rate quote you can complete the FHA rate quote form here or complete the full loan application here.


FHA Loans Requirements, Guidelines, Limits and Mortgage Rates – Ultimate Guide – Lending Expert Blog,


fha mortgage requirements

Fha mortgage requirements

FHA Loans Requirements, Guidelines, Limits and Mortgage Rates Ultimate Guide

Fha mortgage requirementsFind out about requirements (including credit scores), guidelines, rates, loan limits, how to qualify and how to apply for an FHA Loan.

This post is limited to qualifying for FHA loans as a home buyer First Time or repeat. Click on this link if you are interested in reading about FHA Streamline Refinance.

What is an FHA Loan?

Federal Housing Administration (FHA) Loans are insured by Housing and Urban Development (HUD) which allows lenders to offer low downpayment loans to homebuyers like you. FHA loans have been helping people become homeowners since 1934. FHA insures loans for first time home buyer mortgage loan, FHA streamline refinance, FHA regular refinance, Cash-out refinance and also home purchase by people who are NOT first time home buyers. FHA however doesn t provide loan directly. You need to work with an FHA approved lender like Arcus Lending to qualify for the home purchase or refinance loan.

What is the credit score requirement for an FHA Loan?

While FHA guidelines allow for much lower credit scores, most of the lenders require a minimum of 640 fico score.

How to qualify for an FHA Loan?

You need to meet the following basic requirements for qualifying for an FHA loan (this is not an exhaustive guideline and a particular lender may even have their own set of guidelines):

  • Property must be owner occupied.
  • FHA loans are available for 1-4 units houses including single family residence, town-homes, condominiums and even manufactured homes.
  • A minimum downpayment of 3.5% is required. The downpayment can be gifted from parents, children, siblings or other close relatives.
  • Impound account is required on all FHA loan. As part of impound account, payment for property taxes and home insurance are broken down into monthly payments and are paid to the lender along with mortgage payments every month. The lender then makes a payment directly to county or your home insurance company when its due.
  • A two years employment history is required. However, if you went to school immediately prior to starting your employment, the school years can be counted towards two years requirement as long as your job is in the same field as your education.
  • You should have enough income to meet the maximum debt to income ratio requirement of 43%. In some cases, that ratio can be allowed to as high as 50%.
  • Upfront mortgage insurance (UFMIP) of 1.75% and annual mortgage insurance of 0.25% 0.65% is required on all FHA loans. For mortgage insurance premium rates and calculator, check this post.
  • FHA offers 30 year fixed, 15 year fixed and 5 year ARM loan.

What are FHA Loan limits?

For 2017, the FHA national floor loan limit for 1 unit house is $275,665. This means that all counties in the country will at least have this as their loan limit. FHA also classified several counties as high-cost meaning the loan limits in those counties are higher than $275,665. The maximum loan limits in some counties can be as high as $636,150 and in other counties it s between the floor i.e. $275,665 and the highest loan limit i.e. $636,150. Click here to find out the FHA loan limit for your county.

How to apply for an FHA Loan?

To get an FHA loan you need to work with an FHA approved lender. If you want to work directly with me to get pre-approved or get a rate quote you can complete the FHA rate quote form here or complete the full loan application here.


What is an FHA Loan? Complete Guide to FHA Loans, Zillow, fha mortgage requirements.#Fha #mortgage


What is an FHA Loan? – The Complete Consumer Guide

In this article:

An FHA loan is a mortgage that’s insured by the Federal Housing Administration (FHA). They are popular especially among first time home buyers because they allow down payments of 3.5% for credit scores of 580+. However, borrowers must pay mortgage insurance premiums, which protects the lender if a borrower defaults.

Borrowers can qualify for an FHA loan with a down payment as little as 3.5% for a credit score of 580 or higher. The borrower s credit score can be between 500 579 if a 10% down payment is made. It s important to remember though, that the lower the credit score, the higher the interest borrowers will receive.

The FHA program was created in response to the rash of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with adequate insurance; and to help stimulate the housing market by making loans accessible and affordable for people with less than stellar credit or a low down payment. Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.

FHA Loan Requirements

For borrowers interested in buying a home with an FHA loan with the low down payment amount of 3.5%, applicants must have a minimum FICO score of 580 to qualify. However, having a credit score that’s lower than 580 doesn’t necessarily exclude you from FHA loan eligibility. You just need to have a minimum down payment of 10%.

The credit score and down payment amounts are just two of the requirements of FHA loans. Here’s a complete list of FHA loan requirements, which are set by the Federal Housing Authority:

  • Borrowers must have a steady employment history or worked for the same employer for the past two years.
  • Borrowers must have a valid Social Security number, lawful residency in the U.S. and be of legal age to sign a mortgage in your state.
  • Borrowers must pay a minimum down payment of 3.5 percent. The money can be gifted by a family member.
  • New FHA loans are only available for primary residence occupancy.
  • Borrowers must have a property appraisal from a FHA-approved appraiser.
  • Borrowers front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance, homeowners insurance) needs to be less than 31 percent of their gross income, typically. You may be able to get approved with as high a percentage as 40 percent. Your lender will be required to provide justification as to why they believe the mortgage presents an acceptable risk. The lender must include any compensating factors used for loan approval.
  • Borrowers back-end ratio (mortgage plus all your monthly debt, i.e., credit card payment, car payment, student loans, etc.) needs to be less than 43 percent of their gross income, typically. You may be able to get approved with as high a percentage as 50 percent. Your lender will be required to provide justification as to why they believe the mortgage presents an acceptable risk. The lender must include any compensating factors used for loan approval.
  • Borrowers must have a minimum credit score of 580 for maximum financing with a minimum down payment of 3.5 percent.
  • Borrowers must have a minimum credit score of 500-579 for maximum LTV of 90 percent with a minimum down payment of 10 percent. FHA-qualified lenders will use a case-by-case basis to determine an applicants credit worthiness.
  • Typically borrowers must be two years out of bankruptcy and have re-established good credit. Exceptions can be made if you are out of bankruptcy for more than one year if there were extenuating circumstances beyond your control that caused the bankruptcy and you ve managed your money in a responsible manner.
  • Typically borrowers must be three years out of foreclosure and have re-established good credit. Exceptions can be made if there were extenuating circumstances and you ve improved your credit. If you were unable to sell your home because you had to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.
  • The property must meet certain minimum standards at appraisal. If the home you are purchasing does not meet these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs at closing (to be held in escrow until the repairs are complete).

See today s rates for FHA loans on Zillow Fha mortgage requirements

Benefits of FHA Loans: Low Down Payments and Less Strict Credit Score Requirements

Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit. For FHA loans, down payment of 3.5 percent is required for maximum financing. Borrowers with credit scores as low as 500 can qualify for an FHA loan.

Borrowers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get approved for private mortgage insurance should look into whether an FHA loan is the best option for their personal scenario.

Another advantage of an FHA loan it is an assumable mortgage which means if you want to sell your home, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.

Mortgage Insurance is Required for an FHA Loan

You knew there had to be a catch, and here it is: Because an FHA loan does not have the strict standards of a conventional loan, it requires two kinds of mortgage insurance premiums: one is paid in full upfront -– or, it can be financed into the mortgage –- and the other is a monthly payment. Also, FHA loans require that the house meet certain conditions and must be appraised by an FHA-approved appraiser.

Upfront mortgage insurance premium (UFMIP) — Appropriately named, this is a one-time upfront monthly premium payment, which means borrowers will pay a premium of 1.75% of the home loan, regardless of their credit score. Example: $300,000 loan x 1.75% = $5,250. This sum can be paid upfront at closing as part of the settlement charges or can be rolled into the mortgage.

Annual MIP (charged monthly) — Called an annual premium, this is actually a monthly charge that will be figured into your mortgage payment. The amount of the mortgage insurance premium is a percentage of the loan amount, based on the borrower s loan-to-value (LTV) ratio, loan size, and length of loan:


FHA Loans for First Time Home Buyers & FHA Loans to Refinance, fha mortgage requirements.#Fha


fha mortgage requirements

Fha mortgage requirements

Licensed in the State of Florida

Licensed in the State of New Jersey

First Time Home Buyer or Refinance

November 8, 2017

Do you want to learn more about becoming a first time home buyer ?

The FHA program was created as part of the National Housing Act on June 28, 1934. FHA was created to help stimulate the housing market making loans more accessible and more affordable. The FHA program was created as a result of The Great Depression to help anyone including families, the elderly, people on disability and lower-income families be able to buy a home.

After the financial crisis of 2008 all the major banks raised their credit standards for approving FHA loans. Because the banks make the rules for loans they will approve, they may require a minimum credit score of 640 for their loans. These guidelines are the bank’s guidelines.

When you apply for an FHA loan at a major bank and they tell you their minimum credit score requirement is 640. This does not mean that it’s FHA’s minimum credit score requirement. It means that they are the bank’s credit score requirements .

Credit score – On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers .

  • FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment

This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.

Debt-to-income ratio – April 1, 2013 FHA loan requirements include a maximum debt to income ratio. When a borrower applies for an FHA mortgage, they are required to disclose all debts, open lines of credit, and all possible approved sources of regular income. Using this data, the lender and FHA can calculate the borrower’s debt-to-income ratio.

  • FHA maximum debt to income ratio can be over 55%
  • Manual underwriting maximum debt to income ratio is 50%

Mortgage Insurance – On January 9, 2015 the Federal Housing Administration (FHA) announced the reduction of it’s annual Mortgage Insurance Premium (MIP) rates.

Effective on or after January 26, 2015 FHA will reduce the premium from 1.35% to .85% a reduction of .5%.

Combined with low interest rates and the reduction of MIP rates means that it is a great time to buy a home or refinance your mortgage.

First Time Home Buyer – FHA Refinance

Closing cost – FHA allows the seller to pay up to 6% of your closing cost.

If you are buying a $100,000.00 house FHA allows the seller to pay up to $6,000.00 for your closing cost. It must be in writing in the sales contract, “Seller will pay up to 6% of buyer’s closing cost.”

If you do not write it into the sales contract then you will be paying the closing cost. In the state of Florida closing cost for a $100,000.00 house average around $4,300.00 depending on taxes, insurance and who’s paying the transfer tax and owner’s title insurance.

By allowing the seller to pay for your closing cost you will decrease the amount of money required to buy a home. Buying a $100,000.00 property requires $3,500.00 down payment and if the seller pays up to $6,000.00 for your closing cost you will only need around $4,000.00 to buy a $100,000.00 in Florida.

Are you short funds to close? The FHA no closing cost loan allows all of your closing cost to be rolled into your loan including your appraisal fee, hazard insurance premium and even your escrow account.

Are you a first time home buyer? Do you need to get pre-approved for a first time home buyer program in Florida? Apply now!

First Time Home Buyer – FHA Mortgage – FHA Refinance

Fha mortgage requirements

Call us 888.958.5382

www.MORTGAGE-WORLD.com, LLC is a licensed residential mortgage broker in the state of Florida and will match you with the lender that will approve your FHA loan down to a 500 credit score.

We look forward to working with you.


FHA Loans for First Time Home Buyers & FHA Loans to Refinance, fha mortgage requirements.#Fha


fha mortgage requirements

Fha mortgage requirements

Licensed in the State of Florida

Licensed in the State of New Jersey

First Time Home Buyer or Refinance

November 8, 2017

Do you want to learn more about becoming a first time home buyer ?

The FHA program was created as part of the National Housing Act on June 28, 1934. FHA was created to help stimulate the housing market making loans more accessible and more affordable. The FHA program was created as a result of The Great Depression to help anyone including families, the elderly, people on disability and lower-income families be able to buy a home.

After the financial crisis of 2008 all the major banks raised their credit standards for approving FHA loans. Because the banks make the rules for loans they will approve, they may require a minimum credit score of 640 for their loans. These guidelines are the bank’s guidelines.

When you apply for an FHA loan at a major bank and they tell you their minimum credit score requirement is 640. This does not mean that it’s FHA’s minimum credit score requirement. It means that they are the bank’s credit score requirements .

Credit score – On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers .

  • FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment

This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.

Debt-to-income ratio – April 1, 2013 FHA loan requirements include a maximum debt to income ratio. When a borrower applies for an FHA mortgage, they are required to disclose all debts, open lines of credit, and all possible approved sources of regular income. Using this data, the lender and FHA can calculate the borrower’s debt-to-income ratio.

  • FHA maximum debt to income ratio can be over 55%
  • Manual underwriting maximum debt to income ratio is 50%

Mortgage Insurance – On January 9, 2015 the Federal Housing Administration (FHA) announced the reduction of it’s annual Mortgage Insurance Premium (MIP) rates.

Effective on or after January 26, 2015 FHA will reduce the premium from 1.35% to .85% a reduction of .5%.

Combined with low interest rates and the reduction of MIP rates means that it is a great time to buy a home or refinance your mortgage.

First Time Home Buyer – FHA Refinance

Closing cost – FHA allows the seller to pay up to 6% of your closing cost.

If you are buying a $100,000.00 house FHA allows the seller to pay up to $6,000.00 for your closing cost. It must be in writing in the sales contract, “Seller will pay up to 6% of buyer’s closing cost.”

If you do not write it into the sales contract then you will be paying the closing cost. In the state of Florida closing cost for a $100,000.00 house average around $4,300.00 depending on taxes, insurance and who’s paying the transfer tax and owner’s title insurance.

By allowing the seller to pay for your closing cost you will decrease the amount of money required to buy a home. Buying a $100,000.00 property requires $3,500.00 down payment and if the seller pays up to $6,000.00 for your closing cost you will only need around $4,000.00 to buy a $100,000.00 in Florida.

Are you short funds to close? The FHA no closing cost loan allows all of your closing cost to be rolled into your loan including your appraisal fee, hazard insurance premium and even your escrow account.

Are you a first time home buyer? Do you need to get pre-approved for a first time home buyer program in Florida? Apply now!

First Time Home Buyer – FHA Mortgage – FHA Refinance

Fha mortgage requirements

Call us 888.958.5382

www.MORTGAGE-WORLD.com, LLC is a licensed residential mortgage broker in the state of Florida and will match you with the lender that will approve your FHA loan down to a 500 credit score.

We look forward to working with you.


New FHA Total Scorecard Guide Summary, Indecomm-Mortgage U, Inc, fha mortgage requirements.#Fha #mortgage #requirements


fha mortgage requirements

a) Alimony and child support: Previously the TSG allowed alimony and child support income to be verified using only a 3 month history when a loan received a ‘refer’. The elimination of this documentation exception from the TSG clearly indicates that refer loans require a full 12 months of verification before using alimony or child support income. Until now, most underwriters were requiring the 12 month history for ‘refer’ loans anyway but the guideline allowing 3 months gave them some latitude to make exceptions. The change means underwriters should not be making any exceptions for shorter or spotty payment histories from the ex spouse.

b) Judgments: The TSG remains the same and states “Obtain evidence of payoff for any outstanding judgments shown on the credit report” for approve/accept loans. There is still no reference in the TSG to the exception noted in the 4155.1 that allows the underwriter to accept an agreement with the creditor for regular payments and verify the borrower has made the payments on time. In my opinion, the underwriter still has the ability to choose to manually underwrite the loan and use this exception.

However with the new TSG format it appears clear that you are either using an automated decision and following all of its rules or using manual underwriting guidelines. If the borrower has an agreement and is not paying off the judgment then the loan is considered manual underwriting. This is a credit factor AUS can’t assess and accepting a payment arrangement is not what the ‘approve/accept’ is dictating will happen.

If the loan has to fall into a full manual underwriting mode the representations and warranties disappear and DTI and other issues change. I have not confirmed this with anyone directly at FHA yet but my experience in audits sees that underwriters should be very cautious and not layer other risks when considering accepting a court ordered judgment with a payment arrangement on ‘approve/accept’ loans.

4) Energy Efficient Mortgages: The new TSG adds specific certifications the DE underwriter must make on the HUD 29900 LT. The underwriter should note on the LT something along this line: I have reviewed and certify the following items: • The calculations associated with energy efficient improvements are correct • The acceptability of the improvements have been declared energy efficient • This transaction meets all FHA EEM program requirements The previous TSG referenced this in part but did not specifically list all three bullet points that must be covered by the DE underwriter on the LT. (pg.8-9) 5) Misc. Documents: The new TSG adds a few documentation requirements that are probably already in place at most companies but worth pointing out: • Commission earnings require IRS verification in all cases • IRS transcripts are to be reconciled with the tax returns prior to APPROVAL • If the borrower does not hold the deposit account solely, all non-borrower parties on the account must provide a written statement that the borrower has full access and use of the funds 6) Disputed Accounts/Collection and Public Record: The old TSG states: “If the credit report reveals that the borrower is disputing any credit accounts or public records, the application must be referred to a DE underwriter for review.” The new TSG incorporates an April 28th 2011 HOC reference guide email from Jerry Mayer that added guidance regarding disputing credit accounts. It is very clear that a disputed account is cause for a manual downgrade unless ANY of the following circumstances apply (meaning the lender has to confirm at least one of these requirements can be met): • The disputed account has a zero balance • The disputed account is marked as “paid in full” or “resolved” • The disputed account is BOTH less than $500 AND more than 24 months old Keep in mind that FHA does not state a DE underwriter has to be the one to clear this requirement. (pg.15) 7) Borrowers Employed by Family Members: This topic has its own section now to remind lenders to check the 4155.1 for requirements and that AUS will not factor in the risks associated with this type of employment. (pg.17) 8) Tolerance Requirements: The tolerance requirements permitted per ML 05-15 have been added. (pg.10) 9) Reminders: There are several items in the TSG we want to remind you of: • An occupant borrower that has no credit score and is supported by a non occupant borrower with a credit score must be manually underwritten. • Cash out refinances for self employed borrowers require business tax returns even with an approve/eligible • A gift can be used as reserves • Consumer credit counseling is acceptable for approve/accept loans and requires no additional documentation The items listed here are being incorporated into our FHA Practical Guide and are an example of the added organization and detail you get with the guide when compared to the 4155.1 or other reference publications. Our FHA and VA Practical Guides are available in book format from the MU website and on line through Allregs. If you have found something unclear in this write up or in the TSG please send me an [email protected] We are always researching and comparing FHA policies to help you determine what is the right risk and the right process for your organization.

Fha mortgage requirements


New Reverse Mortgage Requirements Coming in 2015 #mortgage #news #daily


#reverse mortgage rules

#

New Reverse Mortgage Requirements Coming in 2015

If you’ve been considering a reverse mortgage, there are big changes coming in 2015 that you’ll need to know about.

Most reverse mortgages are insured by the U.S. Federal Housing Administration. As a product of this, the loans are guaranteed by the government, adding a level of protection for borrowers. It also means the government creates rules and regulations around reverse mortgage lending via the Department of Housing and Urban Development, or “HUD.” That’s where the big changes come in.

In order to make reverse mortgages even safer for borrowers who qualify and are at least 62 years old, HUD is introducing new rules on April 27, 2015, that will impact all borrowers.

Here’s what you need to know.

1. New financial assessment requirements will take effect on April 27, 2015.

Prior to 2015, reverse mortgage borrowers did not have to go through an income or assets assessment as is customary for borrowers who are getting a forward or traditional mortgage.

But any potential borrowers who have been issued an FHA case number on or after April 27, 2015, will now undergo a financial assessment, conducted by the lender. This will also include a credit score review.

The financial assessment is geared toward making sure a borrower can meet the ongoing payments associated with homeownership including homeowners insurance, property tax, and home maintenance. If borrowers have past delinquencies, for example, those delinquencies will be considered by the lender as part of the assessment. If you have historically not made payments on time for repayment of other debts, those will be considered as well.

2. Borrowers will need more documentation.

As part of the financial assessment, lenders will need to collect more documentation in order to underwrite the reverse mortgage and ensure the borrower meets the necessary financial criteria. That may mean gathering income and tax forms, documentation of assets that you own, or payment history for different debts you have held.

The same way you would gather documentation in applying for a forward mortgage, you will need to provide documents as proof of the financial criteria that is required by the financial assessment.

3. You may need to “set-aside” money to fund fixed housing costs

Borrowers who lack certain financial standing as determined by the financial assessment, will need to set aside funds from their loan proceeds in order to cover their property charges (taxes and insurance, namely). This Life Expectancy Set Aside (LESA) is a fund specifically designated for those payments. The LESA works in a way that is similar to the way that forward mortgages sometimes escrow property tax payments.

The set-aside amount will be determined by a calculation conducted during the application process, and will either be designed to either fully fund those payments based on a lifetime expectancy assumption, or to partially fund those payments based on the same assumption.

The financial assessment will make it tougher for some borrowers to qualify for a reverse mortgage. But these borrowers are probably better served by other options like downsizing.

The good news is that by introducing these changes, reverse mortgages will be safer than they have ever been for borrowers. The new assessment is designed to ensure that a borrower has the financial capacity to continue living in their home for the remainder of their lifetime while maintaining his or her reverse mortgage obligations.


203K Loan Requirements and Guidelines – Understand – Apply #land #mortgage #calculator


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203k Loan Requirements for the Renovation and Rehabilitation of Residential Properties

Are you looking to purchase a residential home that requires renovation work? If so, FHA 203(K) loan program may be an appropriate financing option for you.

Generally, for those who wish to buy a home that needs fixing up, the normal course of action would be to buy the property with financing through an unconventional lender such as a private hard money lender. Often times, the interest rates and fees charged on such loans are extremely high. The duration of such loans is also quite short, usually between 6 months to an year. These restrictions have generally discouraged new home buyers from purchasing residential properties in need of repairs.

If the home you wish to buy is need of minor, or major repairs, you may be able to handle the purchase transaction and also secure the necessary funds through a single loan using the 203(K) FHA rehab loan. In many situations where traditional or conventional financing is rare or non-existent for renovating a primary residence, applying through an approved FHA lender for 203(K) financing can be the best course of action.

FHA (Federal Housing Administration) is the HUD’s (Department of Housing and Urban Development) division that administers various single-family mortgage insurance programs through approved lenders to aid both the owners and new buyers of residential properties. FHA does not directly engage in the underwriting, processing or funding of the residential loans it insures. FHA approved lenders handle all aspects, from origination to closing to funding .

The section 203(K) of the National Housing Act was amended in 1978 by the Section 10(c) (1) of the Housing and Community Development Amendments. The main objective of the revision was to enable HUD to take measures that would allow for the promotion, restoration, rehabilitation and preservation of the existing housing stock in the country.

FHA’s 203(K) loan program allows new home buyers and existing homeowners to finance the cost of repairs and improvements that need to be performed on their single-family homes. FHA program requires the property to be a primary residence of the borrower. In addition to financing individuals and families, the 203(K) rehab program also provides financing to organizations engaged in the renovation of properties to revitalize neighborhoods.

Many FHA approved lenders have successfully partnered with various state, local housing agencies and non-profit companies to provide financing under the 203(K) program for initiatives that involve rehabilitation of damaged properties in challenging localities. Financial resources from other program such as HUD’s HOME, HOPE and housing grants were used in conjunction with the 203k rehab loan program to assist borrowers by various housing agencies, at all levels.

The expertise of the housing agencies has also helped a lot of 203k lenders in effectively dealing with rehabilitation application processing. A number of loan programs that adhere and complement the 203(K) guidelines have been introduced by local housing agencies to help homebuyers and homeowners in the areas they service.

Lenders are also obligated under the community reinvestment act to demonstrate their commitment to lend in lower income communities. Participating in 203(K) loan programs has been one of their preferred ways to do so in the recent years.

Compared to conventional loan programs, the process and the requirements involved in securing 203k financing can be quite difficult. To secure a 203(K) insured loan for rehabbing or renovating a single-family home, the best choice would be to approach an experienced FHA approved lender that lends in your area. Before even approaching a 203k lender, a borrower can visit their local HUD homeownership center for preliminary assistance and guidance.

FHA 203k Loan Overview

An FHA 203k loan is a type of FHA-insured home loan that allows homebuyers and homeowners to finance the cost of repair work to improve/renovate/rehabilitate their primary residence into their mortgage. Most of the qualifying criteria are similar to the standard FHA loans that involve rehab financing. The procedures related to the renovation administration and fund disbursement are handled according to the 203k loan requirements stipulated by HUD.

A borrower can use the 203k loan program for quickly and efficiently accessing the cash necessary to pay for repairs or improvements to their primary dwelling. The work write-up and estimates based on the reports from 203k consultant. contractor and appraiser assist a 203k mortgage lender in underwriting the loan.

Energy efficient improvements, structural changes and appliances are just some of the wide range of repairs and improvements eligible for 203k financing .

Types of 203k Loan Programs

There are two types of rehab loan programs that fall under FHA 203k. The specific and appropriate loan depends on the type of repair work and the total cost associated with them. Both the loan programs can be used for either purchase or refinance transactions.

Standard (K) Program

The 203k standard rehab mortgage is used for financing properties in need of extensive repairs. Major additions and structural changes fall under this loan type.

A standard 203k loan program allows a loan amount that is 110% of the after improvement value determined by the appraisal. A 203k consultant is required to perform a thorough home inspection in order to do the complete work write-up. A minimum of $5,000 must be borrowed for the sake of repairs. The maximum loan amount depends on the proposed appraisal value. All other qualifying guidelines are pretty much similar to other FHA loans.

Streamline (K) Program

The FHA 203k streamline loan is primarily used for repairs that cost less than $35,000. Most cosmetic improvements and common repairs that do not involve structure, addition or conversion can be financed with a streamline loan. There is requirement for a minimum loan amount. The entire 203k streamline guidelines are designed to make the approval process flexible and easy.

A 203k standard program is particularly suited for projects that need major reconstruction and renovation; while the 203k streamline is appropriate for repairs that fall below $35,000. Homeowners can buy new appliances and also finance all other common repair works with the 203k program.


Understanding Reverse Mortgage Rules – Requirements #arm #mortgage #calculator


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Reverse Mortgage Rules Requirements?

The reverse mortgage loan has continued to evolve since its introduction in 1961 and only grows stronger and safer with each year. This is primarily due to rules and regulations set by the Federal Housing Administration (FHA). The FHA continually updates and regulates reverse mortgages with new guidelines to protect you as a borrower. So what exactly are the current rules and requirements of the reverse mortgage loan product in 2016?

Reverse Mortgage Rules

The intention of the reverse mortgage loan began as a way to help seniors use their equity to age in their home. Therefore, the four most important borrower rules for reverse mortgages are as follows:

  • You must be 62 years of age or older.
  • You must own your home.
  • You must own your home outright, or have a substantial amount of equity.
  • You must live in the home as their primary residence.

Further Information Borrower Obligations

Once you satisfy these eligibility requirements and after you obtain a reverse mortgage, you still have obligations to uphold. In order to enjoy all the features of a reverse mortgage loan, and ensure that you do not default on the loan, you are responsible for:

  • Immediately using reverse mortgage loan funds to pay off any other mortgage you may have.
  • Continuing payments on your home insurance, property taxes, and basic home maintenance.
  • Complying with all the loan terms, such as continuing to live in the home as your primary residence.

Beneficial Reverse Mortgage Program Rules

The regulations about loan payback are quite important as well. Luckily, the popular government insured reverse mortgage loan, also called a Home Equity Conversion Mortgage (HECM), is non-recourse. This means that:

  • If the loan is not repaid after maturity, no assets other than the home can be taken to pay off the reverse mortgage loan.
  • If the loan debt surpasses the value of the home, the borrower will not owe more than the amount the home sells for.

HECM Government Regulations

In addition, the FHA has set some additional safeguards to protect borrowers and encourage responsible reverse mortgage loan use.

  • Before loan approval, part of the process is to complete a counseling session with an FHA-approved counselor. This counselor will make sure you know all your options and have all the reverse mortgage information you need to be able to decide if this loan is best for your situation .
  • In the first year of a reverse mortgage loan, you may only access 60% of your approved loan amount (or the amount required to pay off your current mortgage plus 10%, whichever is greater). After the first year, you may access the remaining amount. This is to encourage you to not pull from your equity too quickly.
  • Lenders are not permitted to require you to purchase other loans or financial products, as a condition of your loan.
  • Lenders are required to complete a financial assessment of prospective borrowers and analyze income against expenses. If the ratio shows that you may have some difficulty in paying recurring taxes, insurance, or other loan obligations, you may set aside money from your loan funds in order to pay your financial obligations.
  • Additionally, the law gives you three business days after loan closing to change your mind and cancel your reverse mortgage loan. Lenders cannot charge you interest during this period of time.

New Reverse Mortgage Rules and Regulations

TWo new rules were implemented in 2014 and 2015 for the reverse mortgage loan program. Still in effect for 2016, these rules regarding non-borrowing spouses and the borrower s financial assessment add new layers of protection for all borrowers.

  • Reverse Mortgage Rules for A Non-Borrowing Spouse

This rule makes it easier for the non-borrowing spouse to continue living in the home following the death of a borrower. The non-borrowing spouse will inherit the responsibility for the reverse mortgage loan as well as the home s ownership. Borrowers should be aware, the age of the non-borrowing spouse may effect some loan terms such as the amount available to borrow.

This rule mandates that lenders financially assess all reverse mortgage loan applicants. Borrowers are required to submit documentation regarding income, taxes, assets, payment history, and other debt to lenders. The purpose of this rule is to ensure that borrowers have the financial capability to fulfill their loan obligations, such as continuing to pay property taxes and home insurance.

Although the FHA’s rules and regulations for the reverse mortgage loan program may seem stringent to some, they are designed with the borrower’s best interests in mind and are truly beneficial to you as a borrower. These regulations and rules are meant to encourage borrowers to use this great financial tool as part of an intelligent retirement planning strategy. which in turn solidifies the overall strength of the reverse mortgage loan product.

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Sources:

“Reverse Mortgages: New Rules Ensue.” NetEquityMtg.gov. n.p. n.d. Web. 1 Apr 2015. http://www.netequitymtg.com/2015/01/22/reverse-mortgages-new-rules-ensue/