FHA Loan Experts

As FHA loans are returning to the forefront of the mortgage industry, many homebuyers have questions regarding their options in obtaining an FHA mortgage and the benefits of going with the FHA as opposed to using a conventional lending product. Some common 'negatives' that most people have heard concerning FHA loans - that obtaining one is a tedious process, that they require a 3% downpayment - it's important for potential homebuyers to educate themselves beyond these common conceptions before dismissing the possibility of obtaining such a loan.

Interested in learning more? Try downloading our FHA Loan Guide!

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Please note that the FHA experts cannot give advice on an individual particular situation. The information required to make such an analysis is detailed, and should not be handled in this forum. This forum is for discussion regarding general FHA questions. It should be used in addition to other FHA resources, and should not be the final say in your personal decision making process. For an individual analysis, please inquire here.

The thoughts posted by our experts are their current opinions at the time of posting only, and are subject to change without notice. MortgageLoanPlace.com has no responsibility for their accuracy or completeness. Questions containing personal information will not be posted on this website.

Previous Questions and Answers

I am refinancing my home without my husband because of his bad credit. Will his judgments in his name only prevent me from getting my final approval? I am not putting him on the loan at all.

If you are not filing jointly for the loan, then his credit should not be a factor in approval.

What constitutes a first time home buyer?

A first time home buyer is defined here.

Can a gift of equity from the seller be used toward the down payment of a purchase of a single family home on a FHA loan?

They can if the lender is made aware of what is going on. If not, you are tricking the lender. Check here for more information.

If you had a deed-in-lieu of foreclosure on a FHA loan four years ago, is it possible to qualify for a FHA loan?

Yes, it is possible to again qualify for a FHA loan, though your interest rate will be higher.

How long does it take the underwriter to make a decision on a mortgage loan?

There is no good answer to this question. This is completely dependent on your current situation, as well as the company that is underwriting your loan. There could be issues with your loan that will take longer. Also, if the company falls behind, then it is just going to take a little bit longer.

We were buying a house with FHA. Everything was all good to go right up to closing. Now they are saying we can't close because we have a FHA loan on the house we're in now. Is this true?

If you already have an FHA loan on another property, then yes this is true. You may only have one FHA loan at a time.

Do you have to be a first-time homebuyer to obtain a FHA loan? I have purchased and sold a home prior to now, but did not use FHA financing. Am I allowed to use it on my second home?

No. Though part of the original design and intent of the FHA program was for first time home buyers, the program is open to anyone wanting to purchase a home.

We are currently selling our home to someone who is obtaining a FHA loan to purchase our house. I have heard that FHA is extremely strict on the criteria that have to be met inspection wise. Is this true? What can I expect as the seller?

There are policies set fourth by the HUD to ensure the home meets certain requirements before being financed through FHA. However, generally speaking the costs and responsibilities will fall on the buyer. Check out the HUD FHA Home Guide for more information.

What determines the interest rate for a FHA loan?

The interest rate for any loan is determined by several factors. The rate you can get from a lender depends on how risky of an investment the lender thinks the loan is. The higher your income, the less debt you have, and a good credit history will help you get a lower rate.

If the seller's contract states the home is to be sold as is and the buyer is financing through FHA, and the house inspection shows repairs are needed in some areas, does the seller have to make those repairs before financing can be finalized?

No. It is not the seller's responsibility to make sure the home is in condition to be financed through FHA. This will have to be worked out between the buyer and the seller before closing, but generally speaking the buyer is going to have to cover the repairs.

If I filed bankruptcy 3 years ago and included my FHA mortgage loan in the Chapter 7, can I get another FHA loan now?

The longer you wait post bankruptcy to apply, the lower your interest rate will be. Generally you must wait 2 years to qualify for a home loan and 3 years to qualify for a FHA loan.

Can FHA help me refinance my home if I am in a forbearance?

Yes, it is possible that a FHA refinance could help if you are in forbearance. This is called special forbearance and is based on your own individual situation. Providing proof that you could make payments under a new plan could help you to stay in your home.

We have been told that we make too much income for a first time home loan by $1,500. Is there any way around this?

There are several loan programs that have income limits. Usually it is something along the lines of not being over the median income level for the area. There is no real way around this, other than to get a different type of home loan that has no such restrictions.

Once you get an FHA loan, is there a certain length of time you have to keep the house before you can re-sell it?

No, there is not a certain length of time that you must keep the house.

Is there a form for the professional engineer to use for the foundation certification done for a FHA loan?

There are a variety of forms that are necessary, and they depend on which state you are in. Here is an example of the foundation certification for FHA loans.

Can you buy points on a FHA loan?

Yes, sometimes with a FHA loan it may be beneficial to try to pay off 1 point (1% of the loan at closing) to lower your interest rate. However, it is not always a great idea to buy points for a loan. Here is an example. If the loan amount is $300,000 1 point would cost you $3,000. So the point loswers your payment $20 a month because of the lower rate, but you are already out $3,000. So it would take you 12.5 years to break even. You would have to stay in that house longer than that to make it a good investment.

I am looking into buying a house. I would like to get a FHA loan, but the house needs some work. What are the requirements or improvements the FHA needs so that I may qualify?

Without knowing more specifics it is hard to say. Please check out this site for FHA home requirements to see if the home will be approved by the FHA appraiser.

I would like to know if I could pay off my medical collections and other debts if I refinance my home.

If you qualify, yes. Refinancing to get cash out is one of the benefits of FHA refinancing.

Is a gift from a friend acceptable for the down payment?

Sure. They don't necessarily have to pay the money directly to the bank, but could pay it to you and you can use it for the down payment on the home.

How long does one have to keep the FHA loan before selling or refinancing?

There is no set time limit. However, generally to refinance there will have to be a little bit of built up equity in the home in order to make refinance worth while.

If I have just started a new job and get paid in cash, what information can I give my loan officer as income verification?

The best thing is some sort of income verification letter from your employer. You will want the letter to include how much you make, how often you are paid, and how long you have been working at that job earning that amount of money.

Is a FHA appraiser responsible for inspecting the utilities in a home?

Yes, it is the FHA appraiser's responsibility.

Can you get a FHA loan for a second home or investment property?

No. You must live in the home financed by the FHA loan.

What if you have an interest only loan and have no equity in your home? Will you still be able to refinance?

Check out this source for interest only refinancing.

We just got approved to buy a home with a FHA loan. The home we are buying is as is and it needs a small hole in the kitchen ceiling patched. It is bank owned and the bank will not let us go in and fix the hole by hiring a contractor, at our cost, so that the FHA loan can go through. Is there any other way for us to handle this so that we can make this happen?

This seems strange. There is no reason why the bank would not want the loan to go through so that they can sell the house. It is possible the bank doesn't understand why the hole in the kitchen needs to be repaired. I would just work with someone at the bank more closely to be sure they understand the situation.

I applied for a FHA loan and the mortgage told me I qualified after paying for several charges like appraisal, title inspection, termite inspection, earnest money and other expenses. Now they are telling me that I can't have the loan after all. Is there anything I can do?

This is a similar situation. It all comes down to what is in the contract you agreed to when you paid the fees. If it is in writing that you could get the money back if you don't get the loan, then this is an option for you.

I was pre-qualified for my loan. 30 days before closing, I was not able to provide proof of employment due to relocating. I am now unapproved for my loan. Can I get my earnest money back?

It all comes down to what is in the contracts that allows the buyers to back out and when. Most contracts say that if the buyer doesn't get the loan, they can get their deposit back. If you feel that you are due a buyer's earnest money, or a portion of it according to your contract, then you can take them to arbitration or court.

Can you do a partial claim if you do not live in the home anymore but are currently renting it out to someone for the mortgage payment amount?

You will not be able to do a FHA partial claim because you must live in the home financed by an FHA mortgage.

I heard about a program to help prevent foreclosure, where you can get a loan to bring your FHA mortgage current as long as you can make the monthly payments from that point on. Do you have information about this?

This is a new program from the HUD. This aims to help the many families who are in trouble of losing their homes. Please visit the press release for more information.

Do renters living in a foreclosing home still have to pay rent?

Yes. You have to pay rent as long as you live there for as long as the lease you signed states.

Does FHA still participate in the Ameridream program?

Yes, there are many down payment programs like Ameridream that you may use when applying for an FHA loan.

Do you provide construction loans?

The FHA has a construction loan program. Check here for more specifics on the program.

If you have received a FHA number listing for both you and your spouse, but your spouse refuses to sign at closing, what can you do?

The easiest thing and best long term thing to do will be to just get a new FHA listing number for yourself only, particularly if you are not using your spouse's credit to qualify.

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