That didn’t take long! BREAKING: HUD suspends FHA mortgage insurance premium cut
#BREAKING In first moments of Trump presidency, HUD makes it official: FHA mortgage insurance premium cut is suspended “indefinitely.”
The Department of Housing and Urban Development announced it suspended the reduction of Mortgage Insurance Premiums, effective immediately. HUD sent out an announcement just an hour after President Trump was sworn in on Friday, stating that the cuts have been suspended indefinitely. Click the headline for more.
Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.
Ordered through a third party source. Interested/vested parties may not initiate the appraisal. I.E> buyers, sellers, realtors, loan officer, family members
Property must meet HUD’s minimum property standards. i.e.: permanent heat source, utilities must be on and in working order at time of inspection
Flips < 90 days – not allowed Per HUD -If current owner owned less than 90 days FHA will not insure. Sometimes a second appraisal will be required by FHA investor if sold within the last 6 months for a large profit. Receipts of work done may be needed to substantiate increase in value of home in short-time period.
Transferred appraisal – ok
Appraisal valid 120 days – 30 day extension possible*
Property eligibility – No location restrictions.
New Construction Available
FHA MORTGAGE LOANS AND FLIPPING RULE FOR APPRAISALS
Resales Occurring 90 Days or Fewer after Acquisition:
Not eligible for FHA financing
Resales occurring between 91 days and 180 Days after Acquisition:
Obtain 2nd appraisal if resold between 91 to 180 days after acquisition
Obtain 2nd appraisal if resale price is 100% or more over price paid by seller
If 2nd appraisal is more than 5% lower than value of first appraisal, the lower value must be used
Borrower not allowed to pay for 2nd appraisal
Exceptions to FHA Flipping Rules:
Property purchased by an employer or relocation company due to relocation of an employee
Resales by HUD – REO program
Sales by other government agencies (i.e., IRS, court-ordered, DEA, etc.)
Sales of non-profit agencies approved to purchase HUD properties
Acquisition due to inheritance
Sales of properties by federally chartered financial institutions
Sales of properties by GSE’s
Sales of properties by local or state governments
Sales by builders selling a new home
Sales of properties in federally declared disaster areas
NOTE: Mortgage Company must obtain a 12-month chain of title to document time restrictions above. VA MORTGAGE AND FLIPPING RULE
No Flipping Rules – Overlays may apply or at Underwriter’s discretion
USDA RURAL HOUSING MORTGAGE FLIPPING RULES
Lender is responsible to ensure that any recently sold property’s value is strongly supported when a significant
increase between sale and purchase occurs.
Lender must ensure that the appraisal value is supported with validated comps and protect the borrower from
Fannie Mae Appraisal Flipping Rules
No Flipping Rules – Lender overlays may apply
No Flipping Rules – Lender overlays may apply
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice.
Did You Know that Kentucky Mortgage FHA Income Requirements changed in October 2015?
• Job Changes –
FHA loan rules instruct lenders to, favorably consider a borrower for a mortgage if he/she changes jobs frequently within the same line of work, but continues to advance in income or benefits. In this instance, income stability takes precedence over job stability.
And FHA loan applicants who have been out of a job for a while but have since returned to employment may have their income considered effective and stable when recently returning to work after an extended absence if he/she:
–is employed in the current job for six months or longer, and
–can document a two year work history prior to an absence from employment using traditional employment verifications, and/or copies of W-2 forms or pay stubs.
Note: An acceptable employment situation includes an individual who took several years off from employment to raise children, then returned to the workforce.
• Employment Gaps –
For borrowers with gaps – FHA does not require a minimum length of time that a borrower must have held a position of employment. However, the lender must verify the borrowers employment for the most recent two full years, and the borrower must:
–explain any gaps in employment that span one or more months, and
–indicate if he/she was in school or the military during the most recent two full years, providing evidence supporting this claim, such as college transcripts, or discharge papers.
When analyzing the probability of continued employment, the lender must examine –the borrowers past employment record
–qualifications for the position
–previous training and education, and
–the employers confirmation of continued employment
Kentucky FHA Program guidelines have been updated as follows:
For a Kentucky FHA Purchase Loan, we can go down to a 600 credit score with the minimum down payment of 3.5%. No bankruptcies or foreclosures in the last 2 years.
If you are getting cash out, then the max loan to value or equity position is limited to 85% of the homes value. For example, if you had a home that was valued at $100,000, then the max loan for a FHA Cash Out in Kentucky would be $85,000.00. You still have to may mortgage insurance for life of loan so think carefully about using FHA for a cashout refinance.
The maximum debt to income ratios will be set by the AUS when we run it, but for a refer, it will be limited to 31% and 43% respectively. For example, if you make $3000 a month gross income, the max house payment would be $930.00 piti, and the maximum monthly payments including the new house payment would be $1290.00. So in the above example, the most you could have left in monthly bills listed on the credit report would be $360.00–If you had child support this would count in the dti calculation on the backend ratio of 43%
The seller can pay up to 6% of the buyer’s closing costs and prepaids (property taxes, home insurance for 1st years escrows) of the sales price. So, if you purchased a home for $100,000.00, the seller could give you a concession at closing to pay your closing costs and prepaids. A lot of Kentucky First Time homebuyers use this to limit their cash to close.
The minimum down payment of 3.5% for Kentucky FHA Loans can come from a family member in the form of a gift, or can be borrowed from a 401k, retirement account, or secured asset like a car.
• Seller must own the property a minimum of 90 days prior to the contract date.
FHA loans do not require a termite or home inspection, but they do require a HUD appraisal by a FHA approved Appraiser.
The following changes are effective for all Kentucky FHA case numbers assigned on or after June 3, 2013: FHA is changing the duration for the collection of MIP
o For all mortgages with an original principal LTV of 90% or less, regardless of loan term, the annual MIP will be assessed for 11 years.
o For all mortgages with an original principal LTV greater than 90%, regardless of loan term, the annual MIP will be assessed for the entire life of the loan.
Loans of 15 year terms or less with LTV 78% or less will pay an MIP amount of 45 bps.
FHA Streamlines Prior to June 2009
FHA Streamlines with case numbers dated June 11, 2012 or later will have new MIP rules applied. If the loan being refinanced was endorsed on or before May 31, 2009, the new Streamline will receive a flat annual MIP of 55 basis points, regardless of loan amount, and the UFMIP ratio will decrease to 0.01% of the base loan amount.
Senior Loan Officer
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
The Department of Housing and Urban Development is pushing back against industry groups calling for the Federal Housing Administration to reduce or rebalance its mortgage insurance premiums. Three industry groups have urged FHA to rebalance its 1.35% annual MI premium and its 1.75% upfront MI premium to make FHA loans more affordable. But such a change would reduce FHA revenue. The commissioner stressed that it’s important to strengthen the FHA single-family mortgage insurance fund and find other ways to increase access to credit. “We must do both,” she told attendees at the Mortgage Bankers Association’s Washington Policy Conference. HUD is moving ahead with a housing counseling program called HAWK (Homeowners Armed with Knowledge) that will reward FHA borrowers that receive counseling.