The FHA loan program requires borrowers to make a down payment of at least 3.5%. But it also allows you to use gift money from an approved third party, like a friend or family member. The gifted funds can be applied to your down payment or closing costs. This guide explains the rules and requirements […]
Chart: FHA Annual Mortgage Insurance Premiums (MIP) for 2019
At a glance: Most FHA borrowers pay an annual MIP of 0.85% for the full term of the loan, or up to 30 years. FHA mortgage insurance premiums (MIPs) can be somewhat confusing to home buyers. There are several reasons for this. First of all, there are two different kinds of premiums, and they are […]
Overview of the FHA Closing Process for Home Buyers
Closing is the final step in the FHA home buying process. This is when the buyers sign all remaining paperwork, pay their closing costs and fees, and get the keys to their new house. Hooray! But what actually happens during the FHA closing? What should a home buyer know about this process, in order to […]
MIP Cancellation: How to Remove FHA Mortgage Insurance in 2022
Editor’s note: This article was update in April 2022 to reflect current policies and guidelines regarding MIP cancellation. Over the years, we have received a lot of questions about canceling mortgage insurance on FHA loans. People want to know: How do I cancel the annual MIP attached to my FHA loan? How long before I […]
Q&A: Why Would the FHA Not Approve a Home for Purchase?
Reader question: “My husband and I are thinking about using an FHA loan to buy a home in our area. But a lot of the homes around here are fixer-uppers, older properties, etc. I’ve been told we might have trouble getting a HUD loan for this reason. Why would FHA not approve a home? Are […]
FHA Property Condition Requirements in 2018
The newly revised handbook for FHA loans (HUD Handbook 4000.1) took effect in September 2015. That means it applies to all government-insured home loans originated in 2018. It’s the “law of the land,” so to speak. Among other things, the new handbook explains the minimum property condition standards and requirements for homes purchased with an […]
Allowable FHA Closing Costs for Home Buyers
Do you have questions about allowable FHA closing costs in 2018, particularly the ones paid by the home buyer / borrower? If so, you’re in the right place. Below, you will find a list of closing costs that mortgage lenders are allowed to charge for FHA loans. Allowable FHA Closing Costs The Department of Housing […]
FHA Self-Employed Borrower Income Guidelines for 2016
Editor’s note: The guidelines below apply to automated underwriting using FHA TOTAL Mortgage Scorecard. HUD offers a separate set of guidelines for manual underwriting. Self-employed home buyers are eligible for FHA loans. But they have a few extra “hoops” to jump through, compared to borrowers who work for someone else. Requirements and guidelines for self-employed […]
Do FHA Lenders Check My Credit Score Again Before Closing?
Reader question: “At what point during the home-buying process do FHA mortgage lenders check my credit score? I’m guessing they do it at the start of the process, when I first apply for a loan. But do they run a second credit check before closing?” Here’s the short answer: Most lenders who offer FHA loans […]
Difference Between FHA and Conventional Loans
The main difference between FHA and conventional loans is the government insurance backing. Federal Housing Administration (FHA) home loans are insured by the government, while conventional mortgages are not. Additionally, borrowers tend to have an easier time qualifying for FHA-insured mortgage loans, compared to conventional. The closing process can take a bit longer as well. […]