If you are planning on buying a home in the State of Alabama the FHA Home Loan Program will be one of your main funding sources. As a loan officer with Home Town Mortgage Services, I have been trained on all the aspects of the FHA Loan Process. I have put together several articles that along with my fellow Home Town Mortgage Services Loan officers I feel that will help answer some of the questions that you might have. As always please feel free to contact me if you have any questions.
Sue Nguyen
sue.nguyen@htmortgage.net
251-445-2282

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FHA Gift Funds

If a borrower does not have the funds available for the down payment there are some options that can help them. The borrower may receive Gift Funds from a relative, close friend, employer, or labor union.

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FHA Income Guidelines

The Borrower’s employment history documentation is the Lender’s responsibility. HUD does not require a length of time that the Borrower must have held a job position to be eligible for an FHA loan. The Lender must document the employment history for the most recent 2 years. If the borrower has been enrolled in school during that 2 year history this must be documented as well, and the full job history will be reviewed

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FHA Non-Purchasing Spouse

The FHA guidelines on a non-purchasing spouse are quite perplexing and unclear. They seem to vary on whether or not the home is in a community property state. Even with knowing this, the guidelines still are not clarified.

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Comparing Your Debt to Income

In an effort to prevent home buyers from purchasing a home they will not be able to afford, the FHA has set requirements and guidelines which require borrowers and their spouse to qualify based on set debt to income ratios. These ratios are used in calculating the potential borrowers financial position in order to establish whether to or not they will be able to undertake the financial responsibility of owning a home. The two ratios used are

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FHA Requirements for Mortgage Insurance

To protect lenders against losses that result from defaults on home mortgages the FHA requires borrowers making a down payment less than 20 percent to have mortgage insurance.

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FHA and the Self Employed

A borrower is considered self-employed when they have 25% or more ownership interest in a business. As long as income is considered stable and continuing it can be used to qualify for a loan. For the income to be considered as stable, FHA typically requires a 2 year history (2 full years of income tax returns are used for verification).

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FHA Refinance

HUD has uses 3 key points to determine what the maximum refinance mortgage amount. HUD will analyze the occupancy status of the property, what the loan proceeds are used for, and how/when the property was purchased.

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FHA Credit Guidelines

An Automated System or an FHA Underwriter will thoroughly review the borrower’s most recent 2-year credit history. The borrower will be evaluated based on how well they paid their debts as agreed. The findings can be applied as conditions, if the file is accepted by AUS.

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