FHA Day - Daily Recaps of FHA and HUD Home Loan News

Now wait just a minute

admin — Thu, 10 Jul 2008 20:35:17 +0000

Check out this article out of Washington.

A few excerpts:

From Sen. Christopher Dodd,

“My hope would have been that this bill we’ll send them is something the House could support — that’s still my hope,” said Dodd, who crafted the bill with Alabama Sen. Richard Shelby, the panel’s senior Republican. “We’re getting down to the time here where we may not get a bill if this thing goes on much longer.”

A response by Rep. Maxine Waters,

“We’re going to fight on this,” said Rep. Maxine Waters, D-Calif., who made an impassioned plea for the funds in a closed-door meeting of House Democrats this week. “It’s extremely important that we fight to help the communities that are being devastated in this subprime (mortgage loan) meltdown.”

Legislative Help

admin — Tue, 08 Jul 2008 21:57:53 +0000

Many homeowners are beyond help so says Treasury Secretary Henry Paulson. Foreclosure will occur in the foreseeable future for many homeowners as high housing prices and shady lending practices allowed for many of these individuals to purchase homes that they could not afford.

“Many of today’s unusually high number of foreclosures are not preventable,” he said in prepared remarks to a mortgage-lending forum meeting in Arlington, Va. “There is little public policy-makers can, or should, do to compensate for untenable financial decisions.”

It is estimated that 2.5 million homes will begin the process of being foreclosed when is all said and done. The Bush administration has been focused on reducing the number of foreclosures with the lending companies and is tring to salvage what they can of the forecloser cases.

According to Paulson, there have been 1.7 million homeowners helped since July 2007. Congress is currently working on a bill that will allow for the FHA to provide cheaper mortgages to help even more homeowners keep their home.

However legislative differences between the House and Senate could prevent a timely passage. Similarly the White House has said it would veto any bill that comes through its office.

“We haven’t waited for Congress,” Housing and Urban Development Secretary Steve Preston told reporters.

Preston said he was concerned that the Senate’s foreclosure rescue would block the FHA from charging riskier borrowers higher premiums and that the House plan would require the agency to insure mortgages in which the down payment is paid by the seller. Both moves could mean big losses for the FHA, he said.

“Taxpayers should not have to absorb preventable, foreseeable losses,” Preston said.

The Great White North

admin — Tue, 01 Jul 2008 21:25:34 +0000

An agreement between the FHA and the Minnesota Housing Finance Agency was annouced today which is the first of its kind. The agreement is to promote affordable government-backed mortgages.

“For many years, people in the industry and in state government have expressed the need for a clear, mutually-agreed upon memorandum of understanding between FHA and states for the financing of single family properties,” said HUD’s Assistant Secretary for Housing-Federal Housing Commissioner Brian D. Montgomery. “This MOU will help people in need right now by harmonizing the work of FHA and the Minnesota Housing Finance Agency (HFA), and by making FHA loans more available to those who qualify for them.”

There is still a significant increase in FHA business throughout Minnesota as in the first quarter of 2008 there was an increase of 126 percent participation.

Visit Insightnews.com to learn more about this groundbreaking event.

So long Nehemiah?

admin — Fri, 27 Jun 2008 17:24:43 +0000

It has been said that certain home loan programs which help in the assistance of down payments may be cut with the new housing bill.

Debates in the Senate going on right now will eliminate these Nonprofit Organizations while the House debates imposing new regulations on these programs. These programs have become very popular and have surged over the past 10 years.

Some question the nonprofit status of these programs and even say that these types of no money down loans could put taxpayers at risk of having to bail out the government backed mortgages.

The programs, which receive no federal subsidy, help borrowers qualify for loans backed by the Federal Housing Administration, a government agency that backs loans made to low-income borrowers or those with poor credit.

Sellers often times inflate the price of the home to offset the down-payment assistant. But on the other side, individuals who use the program would be kept from purchasing a home.

FHA Mortgage Center.com - Best Blog Contest

admin — Wed, 30 Apr 2008 16:11:25 +0000

I have recently entered a contest on FHA Mortgage Center.com in which they are trying to find who has the best FHA Loan blog. There is a list of the leaders and the sites that have also entered so be sure to check it out and vote mine up.

Vote for this site

Real Estate Blog Contest

presented by FHA Mortgage Center

The HUD/FHA Good Neighbor Next Door Program

admin — Thu, 24 Apr 2008 18:10:28 +0000

The FHA and HUD have a special program called the Good Neighbor Next Door Program. This program is designed to help people from certain professions to purchase homes at a lesser cost. Some of the details of this program include:

• Professionals in the fields of teaching, law enforcement, fire fighting, paramedics, and emergency medical care can get discounts on HUD homes. As long as you work in one of these fields, you can get a great deal on homes for sale from the FHA.
• People in these professions can purchase a home from HUD/FHA for a 50% discount. These people pay half of the asking price of the home without the bidding process involved with normal buyers.
• In order to get the huge discount, the person purchasing the home must agree to live in the property for three full years before selling the property or moving.
• The property can not be used as a rental unit, as part of the agreement is owner occupancy.
• If the buyer decides to move before the three years are up, they have to pay the FHA/HUD back the amount of the original discount.

The idea behind the Good Neighbor Next Door Program from HUD is to get responsible role models to move into neighborhoods and help the areas revitalize. Usually people in these particular professions get respect from the community, and the neighborhoods they live in may become safer and more secure just because of their presence. Many neighborhoods and communities have a lack of good role models, and the Good Neighbor Next Door Program from HUD offers this valuable benefit in order to get these areas safe and secure again.

For more information on the Good Neighbor Next Door Program go to http://www.fha.gov/homes.cfm

Funds Required to Close on a FHA Home Loan

admin — Thu, 17 Apr 2008 14:23:03 +0000

FHA requires a down payment of 3% of the sale price be paid; and will allow this to be in the form of a gift from a family member, significant other or grant; however, it cannot be paid by the seller or lender. FHA will also allow a seller to pay up to 6% of the sale price towards closing costs and prepaids. Without any contributions from the seller, you can expect to pay approximately 2% more at closing.

Closing costs are those fees charged for services provided and can be from the lender, title/escrow company or third party vendor such as the credit reporting agency or appraiser.

You will also be required to establish an escrow (prepaids) account when you close. This usually consists of 3 months property taxes and 4 months property insurance.

A Note on Mortgage Insurance with FHA Loans

admin — Thu, 10 Apr 2008 18:13:55 +0000

FHA requires mortgage insurance (default insurance) on all loans except a 15 year note with 10% down payment. With the requirement of an upfront amount of 1.5% of the sale price, additionally, .50% of the loan amount is collected monthly. The upfront amount is usually financed into the loan.

Credit Scores and FHA Mortgages

admin — Thu, 03 Apr 2008 18:00:38 +0000

While the term “credit score” has grown in popularity over the past few years, it is a very important role in the credit approval process. There are three major companies, Experian, Equifax and Trans Union; whereas, each one provides a score based on the credit information provided. Mortgage lending uses all three companies called a tri-merge report, and the middle score is usually the one referred to when credit score is mentioned.

A middle score of 620 is the rule of thumb for receiving an AU (automated underwriter) approval; however, FHA financing allows those with lower scores and no credit to be considered for a manual approval. While lower scores or prior derogatory credit may be approved, specific documentation is required in order for a credit decision to be made. In addition, FHA will consider Chapter 7 (after 2 years) and Chapter 13 (after 1 year) bankruptcy as well as previous foreclosures (after 3 years) for approval; however, credit must have been re-established. FHA does not allow delinquency on any federal debt and requires all judgments to be paid.

FHA Loan Program Description and Qualification

admin — Thu, 27 Mar 2008 14:20:25 +0000

Program Description

FHA’s primary financing program is a fixed rate loan. This means the interest rate you begin with stays the same through the life of the loan, usually 30 or 15 years.

Qualification

FHA qualifying guidelines include ratios in which a house payment (principal and interest, property taxes, homeowner’s insurance and mortgage insurance) should not to exceed 31% of your gross income and house payment plus all debts (referred to as DTI) should not exceed 43% of gross income. Debts considered in the DTI ratio consist of accounts with balances, credit cards and student loans (including deferred). Small installment loans with less than 10 months remaining are not counted in the DTI. Under certain circumstances, ratios exceeding 31/43 will be considered. (i.e. automated underwriting, purchasing energy efficient home, large down payment)