What to Know About the FHA Handbook
September 19, 2023
The FHA Handbook outlines the policies and requirements for FHA-insured mortgages, which are popular among first-time homebuyers and borrowers with lower credit scores or smaller down payments. It provides detailed instructions and guidelines on various aspects of the FHA loan program, including eligibility criteria, underwriting standards, property appraisal requirements, and mortgage insurance.
Key components covered in the FHA Handbook include:
Eligibility Requirements
The handbook explains who is eligible for an FHA loan, including minimum credit score requirements, debt-to-income ratios, and down payment guidelines.
Property Standards
It describes the property requirements that must be met for a home to qualify for FHA financing. This includes guidelines for the condition and safety of the property.
Appraisal Guidelines
The FHA Handbook outlines the specific requirements for property appraisals, ensuring that the property's value is accurately determined.
Credit Underwriting
It provides guidance on how lenders should assess the creditworthiness of FHA loan applicants, including requirements for handling credit issues and disputes.
Mortgage Insurance
Details on FHA mortgage insurance premiums, including both upfront and annual premiums, are included.
Closing and Settlement Costs
Information on allowable and non-allowable fees and costs for the borrower, as well as the seller's contributions.
Loan Origination and Processing
Guidelines for the processing of FHA loan applications, including required documentation and borrower verification.
Servicing and Loss Mitigation
Information on loan servicing requirements and how to handle delinquencies and foreclosures.
The FHA Handbook is periodically updated to reflect changes in FHA policies and industry best practices. Lenders and other professionals involved in FHA lending are required to adhere to the guidelines outlined in the handbook to ensure that loans meet FHA standards and qualify for FHA insurance.
------------------------------
RELATED VIDEOS:
There's a Difference Between APR and Interest Rates
Choose Your Mortgage Lender Carefully
Getting Started With Your FHA Loan Application
FHA Loan Articles
April 18, 2023Your lender is required to make sure you can realistically afford your mortgage, and that means verifying that your income is stable, reliable, and will continue after your mortgage has closed. What some don’t realize about this process is that there are standards for verifying income.
April 1, 2023FHA loan rules for single family purchase loans include guidelines for the lender to use if the applicant has rental income. Some want to know whether it is possible to qualify for an FHA mortgage using rental income. The real issue is whether the rental income meets FHA loan rules.
March 16, 2023Planning your FHA loan means asking some important questions early in the process. The most obvious question is associated with the type of home you want. How large a house do you need? FHA mortgages allow the purchase of homes with between one and four living units.
February 7, 2023There are tons of reasons why people decide that they’re done with renting and start looking into buying a home. Whatever your reason, deciding to buy a home is a big step, and one of the most daunting aspects is saving up enough money for the down payment.
January 27, 2023Before you get ready to commit to a home loan application, it’s good to review your circumstances and ask a few basic questions about your loan, your plans, and the home itself. Believe it or not, knowing what type of home loan you need is an important step.
