FHA Loans

I entered into a home purchase contract couple of weeks ago and got a conditional mortgage loan approval from my lender? Gustan Cho Associates. The appraisal was supposed to be ordered over a week but Angie Torres of Gustan Cho Associates said she cannot order the appraisal because I had a different house under contract with an FHA loan that fell through. From what I was told, the FHA CASE NUMBER that was assigned by HUD, the parent of HUD is still not released on the house and myself. In order for my lender to be able to order the appraisal for the house I have under contract, HUD needs to release the previous FHA CASE NUMBER

The main reason why HUD does this on FHA loans is so people don’t get more than one FHA loan. Now the sellers side is all nervous about why the appraisal has not been ordered and I don’t blame them

Can you please give me a comprehensive detailed overview in layman’s Rnglish so I fully understand. Thank you.

Best Mortgage Lenders for 500-579 Credit Scores

The best mortgage lenders for mortgages down to 500 FICO are direct or wholesale ones with zero lender overlays. The best bad credit lenders are mortgage lenders that will just off HUD agency guidelines and not implement lender overlays. Per HUD agency mortgage guidelines, anyone who meets HUD FHA lending requirements per HUD 4000,1 FHA Handbook is eligible for FHA loans. The automated underwriting system is a sophisticated computerized system with detailed, up-to-the-minute updated guidelines on all aspects of FHA loan requirements. The AUS will render an automated finding based on the HUD agency guidelines.

Currently in a Chapter 13 Bankruptcy. Looking at buying first home in late spring 2026. but have never reached out to lenders to understand buying power, possibilities, and limitations given our circumstance plus being first time home buyers.

https://gustancho.com/fha-loan-during-chapter-13-bankruptcy-in-arizona/

gustancho.com

FHA Loan During Chapter 13 Bankruptcy in Arizona

Borrowers can qualify for an FHA Loan During Chapter 13 Bankruptcy in Arizona one year into the repayment plan with trustee approval

An FHA 203(k) loan is a type of mortgage loan offered by the Federal Housing Administration (FHA) that is designed to help homebuyers and homeowners finance both the purchase or refinance of a home and the cost of making certain renovations or repairs to the property. This loan program is particularly beneficial for individuals who want to buy a fixer-upper or renovate their existing home.

Here are some key features of FHA 203(k) loans:

1. Financing for Purchase or Refinance: You can use an FHA 203(k) loan to purchase a home that needs repairs or renovations, or you can refinance your existing mortgage and include the renovation costs in the new loan.

2. Two Types of 203(k) Loans:

   • Standard 203(k): This option is for more extensive renovations, including structural repairs and major home improvements. It typically involves a higher loan amount and may require a HUD consultant to oversee the project.
   • Limited 203(k): This option is for smaller-scale renovations and repairs, such as cosmetic updates, appliance replacements, or minor repairs. The loan amount is limited to $35,000, and it’s generally more straightforward than the standard 203(k) loan.

3. Down Payment: FHA 203(k) loans typically require a down payment, which can vary depending on your credit score and other factors. However, the down payment may be lower than what is required for traditional mortgages.

4. Interest Rates: The interest rates for FHA 203(k) loans are typically competitive with other FHA loan programs. They can vary depending on market conditions and the lender you choose.

5. Renovation Funds: With a 203(k) loan, the funds needed for renovations are included in the mortgage amount. After closing, the funds are held in an escrow account and disbursed as the work progresses, typically in multiple payments.

6. Eligible Properties: FHA 203(k) loans can be used for single-family homes, multi-unit properties with up to four units, and certain condominiums. The property must meet FHA standards and pass an appraisal.

7. Eligible Repairs: The funds from a 203(k) loan can be used for a wide range of repairs and improvements, including structural repairs, plumbing, electrical work, roofing, flooring, kitchen and bathroom updates, and more. However, luxury items like swimming pools are not eligible.

8. Loan Requirements: Borrowers must meet the FHA’s credit and income requirements to qualify for a 203(k) loan. Lenders may also have their own underwriting criteria.

9. Mortgage Insurance: FHA 203(k) loans require mortgage insurance, which includes an upfront premium and annual premiums. These premiums help protect the lender in case of default.

It’s important to note that the FHA 203(k) loan process can be more complex than traditional mortgages due to the renovation component. Borrowers often need to work with contractors and adhere to specific guidelines to complete the renovation project.

If you’re interested in an FHA 203(k) loan, it’s advisable to contact an FHA-approved lender who can provide more information, assess your eligibility, and guide you through the application process. Additionally, you may want to consult with a HUD-approved consultant for more complex renovation projects to ensure compliance with FHA guidelines.

HUD’s guidelines for late payments on FHA loans are designed to be relatively flexible, allowing borrowers with some credit issues to still qualify for a mortgage. According to the information provided, FHA defines a major derogatory credit event as any payment over 90 days late or three 60-day late payments. However, having a late payment or two on a credit card in the past 12 months does not automatically disqualify a borrower from obtaining an FHA loan.

For those with late payments within the past 12 months, the “12 month rule” in the FHA loan rule book (HUD 4000.1) states that the loan must be “downgraded to a refer” and “manually underwritten”. This means that if a borrower has had late or missed payments within the 12 months leading up to the loan application, the application will require a more detailed review by an underwriter.

Additionally, HUD allows for some leniency regarding collections and charged-off accounts. Non-medical collections in the past 12 months are considered major derogatory credit, but having a late payment or two on a credit card in the past year may still allow a borrower to qualify for an FHA loan.

For borrowers in a Chapter 13 bankruptcy repayment plan, HUD guidelines require 24 months of timely payments to be eligible for an FHA loan. During this period, it is crucial to have been timely on all payments during the plan

In summary, while late payments can impact the approval process for an FHA loan, HUD’s guidelines provide some flexibility, especially for those who can demonstrate that their payment history has improved or that any late payments were due to temporary circumstances.

https://gcamortgage.com/hud-chapter-13-guidelines-with-late-payments/

https://gustancho.com/hud-late-payment-mortgage-guidelines/

• This discussion was modified 1 year ago by  Sapna Sharma.

gustancho.com

HUD Late Payment Mortgage Guidelines During Chapter 13 Bankruptcy

HUD Late Payment Mortgage Guidelines During Chapter 13 Bankruptcy allow borrowers with late payments during the plan to qualify for FHA Loans

If a man is a permanent resident and his wife has a work permit A-10, are they eligible for an FHA loan as borrower and co-borrower? Thank you.

I recently dug into the details of the Hope for Homeownership Research Program. If you’re not familiar with it, this program is designed for FHA homebuyers—and it actually pays you to install solar panels on your new home.

Here’s a quick rundown:

Cash Incentive:

-You receive 3.5% of your home’s purchase price—up to $13,000. This means if your home costs over $371K, you could get the full benefit.

Before Closing Steps:

-Complete two simple requirements:

1. A free
   solar assessment to ensure your property is a good fit for solar
   installation and that the solar cost is less than your expected monthly
   utility bills.
2. A
   short online homebuyer education course (about 4–6 hours, with a $149
   fee).

How It Works:

-You’re essentially paid to participate in the program, and because the funds are treated as earned income, you can use them however you need—whether that’s for your down payment, closing costs, or just boosting your savings.

-After closing, you install solar panels on your home. The cost is rolled into your FHA loan, so there’s no hefty upfront expense.

Extra Perks:

-You also qualify for a 30% federal clean energy tax credit. For example, on a $30,000 solar installation, that’s about $9,000 back at tax time.

-Plus, homeowners in this program typically save over $200 a month on their utility bills.

This program is a fantastic way to lower your energy costs and reduce your overall home-buying expenses. I’ve made a video that explains it in more detail. Feel free to share your thoughts!

• This discussion was modified 1 year, 6 months ago by  Chad Bush.
• This discussion was modified 1 year, 6 months ago by  Chad Bush.

A general contractor has many years experience as a general contractor. The general contractor has experience with gut and rehab single-family homes, ground-up new construction, kitchens, bathrooms, concrete, plumbing, electrical, roofing, siding, masonry, roofing, and gutters. Sofits, Fascia, and small to large construction projects. How does the general contractor become a HUD-approved general contractor so the general contractor can start taking on FHA 203k loans from Indiana, Illinois, Wisconsin, and Michigan?

https://www.youtube.com/watch?v=Llg5WxUOico

• This discussion was modified 1 year, 4 months ago by  Gustan Cho.

FHA high-balance jumbo loans refer to a specific type of mortgage loan that combines features of FHA loans, high-balance loans, and jumbo loans. Let’s break down each of these components:

1. FHA Loans: FHA stands for the Federal Housing Administration, which is a government agency that insures mortgage loans. FHA loans are designed to make homeownership more accessible to a broader range of borrowers, including those with lower credit scores and smaller down payments. FHA loans typically have more lenient qualification requirements and lower down payment requirements compared to conventional loans.

2. High-Balance Loans: High-balance loans are conventional mortgage loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These limits vary by location and are adjusted annually. High-balance loans are often used for more expensive homes in high-cost housing markets.

3. Jumbo Loans: Jumbo loans are mortgage loans that exceed the conforming loan limits set by the FHFA. These loans are used for high-priced properties that exceed the limits established for conventional loans. Jumbo loans typically have stricter credit and down payment requirements compared to conforming loans.

Now, FHA high-balance jumbo loans are a combination of these concepts. They are FHA-insured mortgage loans that exceed the standard FHA loan limits and also exceed the conforming loan limits for the specific area. This means they are designed to help borrowers purchase more expensive homes in areas with high housing costs, while still benefiting from some of the advantages of FHA loans, such as lower down payment requirements and more lenient credit qualifications.

It’s important to note that the specific terms and eligibility criteria for FHA high-balance jumbo loans can vary depending on the lender and the current guidelines in place. Borrowers interested in these loans should consult with a mortgage lender or broker to understand the specific requirements, interest rates, and terms available to them. Additionally, the availability of such loans may change over time based on market conditions and government policies.

A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a financial product specifically designed for older homeowners, typically aged 62 or older, in the United States. Unlike a traditional mortgage, where you make monthly payments to a lender to buy a home, a reverse mortgage allows homeowners to convert a portion of their home equity into tax-free loan proceeds without having to make regular mortgage payments.

Here’s how a reverse mortgage works:

1. Eligibility: To qualify for a reverse mortgage, homeowners must meet certain age and home equity requirements. Generally, the youngest borrower must be at least 62 years old, and the home must be the primary residence.

2. Loan Types: There are several types of reverse mortgages, but the most common one is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA). HECMs make up the majority of reverse mortgages in the United States.

3. Loan Disbursement: With a reverse mortgage, homeowners can receive loan proceeds in various ways, such as a lump sum, monthly payments, a line of credit, or a combination of these options.

4. No Monthly Payments: Unlike a traditional mortgage, borrowers do not need to make monthly payments on the reverse mortgage. Instead, the loan balance grows over time as interest accrues on the outstanding balance.

5. Repayment: The reverse mortgage becomes due when the homeowner permanently moves out of the home, sells it, or passes away. At that point, the loan, along with accrued interest and fees, must be repaid. Typically, this is done by selling the home, and the proceeds from the sale are used to repay the reverse mortgage. If the home’s value exceeds the loan balance, any remaining equity goes to the homeowner or their heirs.

6. Protection for Borrowers: Reverse mortgage borrowers are protected by various regulations, including mandatory counseling to ensure they fully understand the terms and implications of the loan.

It’s essential to carefully consider the pros and cons of a reverse mortgage before deciding to get one. While it can provide financial flexibility for retirees, it can also reduce the equity in your home, potentially affecting your ability to leave the home to heirs. Additionally, interest and fees can accumulate over time, impacting the ultimate cost of the loan.

Before pursuing a reverse mortgage, it’s a good idea to consult with a financial advisor or counselor who specializes in these products to determine if it’s the right financial solution for your specific circumstances.

• This discussion was modified 2 months, 2 weeks ago by  Sapna Sharma.

This video breaks down the essentials of FHA mortgage insurance premiums. Before getting into the details, here are the key points:

Purpose:

It protects the lender if you default. This protection is important because FHA loans usually require low down payments.

Two Key Components:

Upfront Premium: Typically, 1.75% of the loan amount.

Monthly Premium: This fee varies based on your loan scenario.

Impact of Down Payment:

With a smaller down payment, you’ll pay the monthly premium for the life of the loan.

With a larger down payment, the premium may drop off after 11 years.

Refinancing Options:

As you build equity, refinancing into a conventional loan might allow you to eliminate FHA mortgage insurance.

Check it out if you’re considering an FHA loan and want to know more about mortgage insurance.

https://youtube.com/shorts/qRgkoCSJMzg

• This discussion was modified 1 year, 5 months ago by  Chad Bush.
• This discussion was modified 1 year, 5 months ago by  Sapna Sharma.
• This discussion was modified 1 year, 5 months ago by  Sapna Sharma.

I put together a short video that explains FHA loan limits. Here’s a quick overview of the key points:

• What Is an FHA Loan Limit:
The maximum amount the government will insure for a home loan, helping protect both the borrower and the housing market.

• Loan Limits by Property Type:
Loan limits vary based on the number of units in a property. Single-family homes have one limit, and as the number of units increases—up to a four-unit property—the loan limit rises accordingly.

• Regional Differences:
Loan limits also vary by location. High-cost counties have higher limits than more affordable regions.

• Annual Updates:
HUD updates these limits each year to reflect changes in the housing market. So, be sure to check the latest amounts.

• How to Find Your Limit:
You can check your local loan limit on the HUD website or by talking to a loan officer.

For more details, check out the video below.

Are you considering your mortgage options and wondering if an FHA loan might be right for you? I’ve put together a short video that breaks down the essentials for qualifying for an FHA loan: Here’s a quick summary of the main points from the video. And check out the video link to learn more.

• Low Down Payment & Credit Score Minimums:
Understand how a credit score of 580 can get you in with a 3.5% down payment, while scores down to 500 may qualify with a 10% down payment.

• Debt-to-Income Ratios:
Learn how the front-end (31% for housing costs) and back-end (43% for total debt) ratios impact your mortgage eligibility.

• Property Types & Loan Limits:
See how FHA loans apply to various property types—from single-family homes and FHA-approved condos to multi-unit dwellings (up to four units, with one occupied by the owner). Keep in mind that loan limits differ by county.

• Employment Requirements:
Discover why a consistent work history (around two years) is important for FHA loan qualification.

How does FHA OTC New Construction Loans work?

What would I need to qualify for FHA loan during bankruptcy (over 12 on time payments), no late payments on credit, etc

I just have a question ,I was wondering if my husband was able to qualify for a fha mortgage in the future. He makes 26-27 yearly and has bad credit we been working on his credit. his credit right now is experi FICO 628 ,679 equifax ,675 trans. We haven’t miss any payment in the past 2 years and 3 months but he does have 2 charge offs that are 2 years old and 2 medical collections

FHA loans are the most popular loan program for first-time homebuyers, borrowers with bad credit, homebuyers with high debt to income ratio, and borrowers with credit scores down to 500 FICO.

• This discussion was modified 3 years, 5 months ago by  Eric Jeanette.

I still do not have the right answer on the question I have been asking what is an FHA case number. Why is it mortgage lenders make a big deal about transferring an FHA case number from one lender to another.

HUD, the parent of FHA, does not allow credit disputes on the following:

1. Outstanding collection accounts that are not medical collections.

2. Charged off accounts

3. Late Payments in the past 24 months

4. Derogatory public records such as bankruptcy, foreclosure, deed-in-lieu of foreclosure, short sale, child support, federal and state tax liens, judgments, delinquent student loans, and other derogatory credit tradelines.

EXEMPT FROM CREDIT DISPUTES

1. Medical collections

2. Non-medical credit disputes that are on-time payments and good standings.

3. Non-medical disputes with zero balance.

4. Non-medical credit disputes with total credit tradelines with under $1,000 Outstanding Balance.

5. Collections and charge off accounts, late payments, older than 24 months.

VA, USDA, NON-QM, FANNIE MAE and FREDDIE MAC are normally EXEMPT from credit disputes. We have a YouTube live video aired today September 25th, 2023 at 10 am hosted from GCA Mortgage Group which we will post on this thread. Contact Gustan Cho Associates if you have any questions.

When you are considering a remodel or renovation of your home then you must weigh the options. What will it cost ? How will you pay for it? How much will the remodel improve the property? What is the property value before you begin the remodel? What will the property value be after the renovation/remodel is completed? These are good questions to ask and know, in most situations

you don’t want to use your equity to remodel and then find the property is not worth any more than before, doing this you have just realized your equity position is gone. Before the project begins you must consider where the money is coming from, most people don’t have money just laying around so a new mortgage or another mortgage as a 2nd mortgage may be considered.

On 4 UNIT Owner Occupied FHA loan. Can rental income of this 4 unit be used to reduce the Mortgage Payment.

• This discussion was modified 1 year, 8 months ago by  Allan Kim.

Self employed seeking FHA loan even possible ?

Is it possible to FHA with very high DTI?

I am waiting until I file my 2022 taxes to apply for an FHA loan; I hear lenders are a lot stricter due to COVID-19, especially with those who are self-employed. My question is, with a 630 average FiCO score (2,4,5) and my new taxes showing increasing income in the new year (2023), what other concerns should I have or try to prepare for when I apply for an FHA? DTI is low as well

I have a 705 credit score and zero late payments. I have a 16-year job history and make 80,000 per year. I also have a nine-year rental history. I have the opportunity to purchase the townhome that I’ve been renting, but I’m concerned because my DTI is 48.5%. Do you think I will still get an approval? If so, do you know if I will need mortgage reserves, and if so, approximately how much? I’m using a 401(k) loan for the down payment and closing costs.

I am trying to purchase a home in Wisconsin. The state of Wisconsin is a community property state. I want to exclude my wife from my FHA LOAN. However, she has a lot of debts. She has a full-time job. Can her debts not count if she makes a lot of income? Counting her debts and excluding her income disqualifies me due to going over the maximum debt-to-income ratios on an FHA LOAN. She cannot be on a loan due to a recent foreclosure reporting on a home that was surrendered 6 years ago but was taken out of her name.

I want to purchase a home. But I’m stuck with the Debt to Income Ratio. Not because I have debt. I don’t have debt ( I already paid it all). However, my income for W2 2020 is only $41,000, or around $3600/month. I have 150K in my bank, but I only want to use it for a downpayment of 3,5% because I want to use the rest of the money to build ADU, maybe about 2 or 3 bedrooms, so I can rent it to other people to make income. because rent average around here is for room rent about 800- 900 per month. I stuck with the DTI Ratio because of my recent income and high house prices around my city. I need a purchase price of 450k-500k with 3,5%. and my credit score is 700. So yeah, that’s the situation. I need advice or a solution.

Qualifying For Mortgage With Charge Off With Balances. I have multiple outstanding charge-off accounts with balances. Can I qualify for a mortgage?

Qualifying for a FHA with Gaps in Employment? What are the HUD guidelines on qualifying for an FHA loan with employment gaps?

I am looking to purchase a house via FHA. I have a total of $1996.4 I (including my student loans) monthly payments and make approx. $7600/month. What are the guidelines for getting student loans and applying for a first-time buyer loan for an FHA? Is there an alternative way to qualify when I have high student loans?