FHA Loans

FHA loans” are mortgages insured by the Federal Housing Administration (FHA), which can be issued by any FHA-approved lender in the United States.

Congress established the FHA in 1934 to help lower income borrowers obtain a mortgage that otherwise would have trouble qualifying. In 1965, the FHA became part of the Department of Housing and Urban Development’s (HUD) Office of Housing.

Before the FHA was established, it was common for homeowners to put down 50% of the value of the property as a down payment on short-term balloon mortgages, which clearly wasn’t practical going forward.

Unlike conventional loans, FHA loans are government-backed, which protects lenders against defaults, making it possible to for them to offer prospective borrowers more competitive interest rates on traditionally more risky loans.

Qualifying for an FHA Loan

Because FHA loans are insured by the government, they have easier credit qualifying guidelines than most lenders, as well as relatively low closing costs and down payment requirements.

What is the minimum down payment on an FHA loan?

With an FHA loan, your down payment can be as low as 3.5% of the purchase price, assuming you have at least a 580 credit score.  And closing costs can be bundled with the loan. In other words, you don’t need much cash to close.

In fact, gift funds can be used for 100% of the borrower’s closing costs and down payment, making them a truly affordable option for an individual with little cash on hand.

You can get an FHA loan with zero down?

Technically no, you still need to provide 3.5% down.  But if the 3.5% is gifted by an acceptable donor, it’s effectively zero down for the borrower.

For a rate and term refinance, you can get a loan-to-value (LTV) as high as 97.75% of the appraised value (plus the upfront mortgage insurance premium.)

However, it’s important to note that while the FHA has relatively lax guidelines for its loans, individual banks and lenders will always set their own FHA underwriting guidelines on top of those, known as lender overlays.

And keep in mind that the FHA doesn’t actually lend money to borrowers, nor does the agency set the interest rates on FHA loans, it simply insures the loans.

What is the max loan amount for an FHA loan?

The max loan amount (national loan limit ceiling) for FHA loans for one-unit properties is $625,500, with the exception of some Hawaiian counties that go as high as $721,050.  Additionally, the loan limits are higher for 2-4 unit properties nationwide.

However, some counties, even large metros, have loan limits at the national floor, which is $271,050.  For example, Phoenix, AZ only allows FHA loans up to $271,050.  And it’s not much higher in Las Vegas ($287,500) either.

There are other counties that have a max loan amount in between the floor and ceiling, such as San Diego, CA, where the max is set at $546,250.  In other words, you really gotta check your county before assuming your loan amount will work with the FHA.

Do you need reserves for an FHA loan?

No, reserves are not required on FHA loans if it’s a 1-2 unit property.  For 3-4 unit properties, you’ll need three months of PITI payments.  And the reserves cannot be gifted nor can they be proceeds from the transaction.

Types of FHA Loans

The FHA has a variety of loan programs geared toward first-time homebuyers, along with reverse mortgages for senior citizens, and has insured more than 34 million mortgages since inception.

FHA loans are available for both purchases and refinances, including cash out refinances. The max LTV for a cash-out FHA loan is 95%, assuming the loan amount is $417,000 or smaller, though most lenders tend to cap out at 85% LTV.

For those with existing FHA loans looking to refinance to another FHA loan, the streamline refinance program is a quick and easy option that provides a ton of flexibility, even for those who lack home equity.

Additionally, FHA loans can be either adjustable-rate mortgages or fixed-rate mortgages. If the interest rate is adjustable, it will be based on the 1-Year Constant Maturity Treasury Index, which is the most widely used mortgage index.

Can I get a second mortgage behind an FHA loan?

It’s possible, though most FHA loans have very high LTV ratios, and most home equity loans limit the CLTV (combined LTV) to around 85%-95%, so you’ll need some equity before taking out a second mortgage such as a HELOC.

A second mortgage may also come into play when getting down payment assistance during a home purchase, whereby the loan is subordinate to the FHA loan.

Can FHA loans be used on 2-4 unit properties?

FHA loans can be used to finance 1-4 unit residential properties, including condominiums, manufactured homes and mobile homes (provided it is on a permanent foundation), along with multifamily properties.

However, FHA loans are generally only reserved for borrowers who intend to occupy their properties.

Can I have more than one FHA loan?

Tip: You may only hold one FHA loan at any given time. The FHA limits the number of FHA loans borrowers may possess to reduce the chances of default.

For example, they don’t want one individual to purchase multiple investment properties all financed by the FHA, as it would put more risk on the agency. But there are certain exceptions that allow borrowers to hold more than one FHA loan.

Can I get an FHA loan on a second home?

A co-borrower with an FHA loan may be able to get another FHA loan if going through a divorce, and a borrower who outgrows their existing home may be able to get another FHA loan on a larger home, and maintain the old FHA loan on what would become their investment property.

It’s also possible to get a second FHA loan if relocating for work, whereby you purchase a second property as a primary residence and keep the old property as well.

But you’ll need to provide supporting evidence in order for it to work.

Do FHA Loans Require Mortgage Insurance?

One downside to FHA loans is that the borrower must pay mortgage insurance both upfront and annually, regardless of the LTV ratio.

This differs from privately insured mortgages, which only require mortgage insurance if the LTV is greater than 80%.

The upfront mortgage insurance premium:

FHA loans have a hefty upfront mortgage insurance premium equal to 1.75% of the loan amount. This is typically bundled into the loan amount and paid off throughout the life of the loan.

For example, if you were to purchase a $100,000 property and put down the minimum 3.5%, you’d be subject to an upfront MIP of $1,688.75, which would be added to the $96,500 base loan amount, creating a total loan amount of $98,188.75.

However, your LTV would still be considered 96.5%, despite the addition of the upfront MIP.

The annual mortgage insurance premium:


But wait, there’s more!  You must also pay an annual mortgage insurance premium (paid monthly) if you take out an FHA loan, which varies based on the attributes of the loan.

Beginning January 26th, 2015, if the loan-to-value is less than or equal to 95%, you will have to pay an annual mortgage insurance premium of 0.80% of the loan amount.  For FHA loans with an LTV above 95%, the annual insurance premium is 0.85%. And it’s even higher if the loan amount exceeds $625,500.

For loan terms of 15 years or shorter, the annual mortgage insurance premiums are significantly lower (see charts above).

Additionally, how long you pay the annual MIP depends on the LTV of the loan at the time of origination.

The FHA has increased mortgage insurance premiums several times as a result of higher default rates, and borrowers should not be surprised if premiums rise even more in the near future.

Do FHA Loans Have Prepayment Penalties?

The good news is FHA do NOT have prepayment penalties, meaning you can pay off your FHA loan whenever you feel like it without being assessed a penalty.

Prepayment penalties aren’t very common these days, though they were quite prevalent on conventional loans during the housing boom in the early 2000s.

There is a caveat…

However, there is one thing you should watch out for. Though FHA loans don’t allow for prepayment penalties, you may be required to pay the full month’s interest in which you refinance or pay off your loan because the FHA requires full-month interest payoffs.

In other words, if you refinance your FHA loan on January 10th, you might have to pay interest for the remaining 21 days, even if the loan is technically “paid off.”

It’s kind of a backdoor prepay penalty, and one that will probably be revised (removed) soon for future FHA borrowers.  If you’re a current FHA loan holder, you may want to sell or refinance at the end of the month to avoid this extra interest expense.

Are FHA Loans Assumable?

Another benefit to FHA loans is that they are assumable, meaning someone with an FHA loan can pass it on to you if the interest rate is favorable relative to current market rates.

For example, if someone took out an FHA loan at a rate of 3.5% and rates have since risen to 5%, it could be a great move to assume the seller’s loan.

It’s also another incentive the seller can throw into the mix to make their home more attractive to prospective buyers looking for a deal.

Just note that the individual assuming the FHA loan must qualify under the same underwriting guidelines that apply to new loans.

FHA Credit Score Requirements

Can I get an FHA loan with bad credit?

Borrowers with credit scores of 580 and above are eligible for maximum financing, or just 3.5% down. This is the low-down payment loan program the FHA is famous for.

And a 580 credit score is what I would define as “bad,” so the answer to that question is yes.

What if my credit score is below 580?

If your credit score is between 500 and 579, your FHA loan is limited to 90% loan-to-value (LTV), meaning you must put down at least 10%.

If your credit score is below 500, you are not eligible for an FHA loan.

I can’t find a lender willing to give me an FHA loan with a 500 credit score.

As noted earlier, these are just FHA guidelines – individual banks and mortgage lenders will likely have higher minimum credit score requirements, so don’t be surprised if your 580 FICO score isn’t sufficient (at least one lender goes as low as 550).

Since the mortgage crisis struck, FHA loans have become increasingly popular, essentially replacing subprime lending, largely because of their relatively easy underwriting requirements and government guarantee.

But make sure you compare FHA loans with conventional loans as well. There will be cases when the benefit of one outweighs the other.

FHA loans are not guaranteed to be a better deal than other mortgages, so take the time to shop around. And watch out for unscrupulous FHA-qualified lenders who may attempt to misinform you.

Read more: FHA vs. conventional loans


  1. Leila June 25, 2013 at 9:39 pm -

    I was contemplating an FHA loan until my loan officer and I did the math. The insurance premiums are so expensive now, even if the interest rate is a bit lower.

  2. Dee July 17, 2013 at 6:53 am -

    Agree 100%. I compared rates and fees on FHA loans vs. non-FHA…it’s more than $100 cheaper a month, even though the FHA rate is lower, thanks to the ridiculous premiums they’re now charging. Don’t be fooled by the low advertised rate. The mortgage insurance makes it a bad deal.

  3. Hanna January 22, 2014 at 5:21 pm -

    Can gift funds be used for reserves on an FHA loan?

  4. Colin Robertson January 22, 2014 at 5:32 pm -

    No, they can’t be used for reserves, but they can be used for the down payment and closing costs. Keep in mind that you might not even need reserves for an FHA loan, so it’s not necessarily an issue.

  5. Shayna January 23, 2014 at 11:11 am -

    Hi, do FHA loans require escrow accounts? My lender says they do.

  6. Colin Robertson January 23, 2014 at 3:31 pm -

    Yes, the FHA requires lenders to establish escrow accounts for their borrowers to ensure funds are available for things like taxes and insurance.

  7. John B. February 3, 2014 at 6:48 pm -

    I have been trying to get a FHA loan for a new home so we are adopting our Grand Daughter and need to have a better home to bring her to, anyway we are told that we need a Higher Credit Score more than a 617 or 620 I have found out through this site all you need is a 500 score to get a FHA loan, so why was I told my score was Not good enough, I know people who had gotten FHA loans with lower scores than mine.

  8. Colin Robertson February 4, 2014 at 2:19 pm -


    Most lenders require a higher FICO score for an FHA loan, typically 620+ or 640+, though the FHA guidelines do allow for much lower scores. However, most lenders aren’t willing to underwrite loans with credit scores that low because of the high risk of default. You might want to do more shopping around to find a lender willing to go that low, or work on your credit score a little more to get it above those thresholds. I’m pretty sure there are some lenders willing to go as low as 580. Good luck!

  9. Marcelo February 6, 2014 at 2:04 pm -

    Thank you for the informative rundown, but there’s one thing I’m not clear on. Why do FHA loans have lower interest rates? Is it because they’re guaranteed by the government?

  10. Colin Robertson February 6, 2014 at 4:37 pm -

    Yeah, basically because the federal government insures FHA loans, lenders are able to offer lower rates relative to non-gov loans because of the explicit guarantee.

  11. Gary February 17, 2014 at 6:16 am -

    Good info! I know a lot more about FHA loans now thanks to you.

  12. Abbey March 4, 2014 at 6:25 pm -

    why do fha loans require mortgage insurance even if the LTV is below 80%?

  13. Colin Robertson March 4, 2014 at 7:45 pm -

    Good question Abbey…most FHA loans tend to be above 80% LTV and therefore have mortgage insurance, just as a conventional loan would.

    However, the FHA now requires ALL loans to have both upfront MI and annual MI premiums for a certain period of time, regardless of LTV or loan term. This is a recent change implemented to shore up the FHA’s finances, seeing that they needed a bailout of sorts recently.

    It’s not really fair for low-LTV borrowers, which is why you may want to consider non-FHA options as well if your LTV is below 80%.

  14. Steve May 30, 2014 at 7:42 am -

    I see that I need to pay the last month’s interest regardless of when I close, but I am also being told I need to pay MPI for another month out of my escrow after everything has closed. IE, loan paid off on May 15th and they are taking MPI on June 1st??

  15. Colin Robertson May 30, 2014 at 3:31 pm -


    Are you saying they’re making you pay your monthly mortgage insurance premium for the month of May on June 1st as well? Ask the lender for clarification and let me know.

  16. Ralph June 30, 2014 at 3:35 pm -

    do to 10 collections on credit my score is 502. My banker told me not to try and pay it would make it worse (the truth)
    I am trying to straighten out credit removing old credit. it is hard. Kansas is a stickler for medical bills. Can you offer names of some mortgages company’s that may have mortgage loans to offer me ? I can pay a mortgage as I pay high rent now. Can you help. They say FFA helps but low score – it seems that isn’t accurate……

  17. Colin Robertson June 30, 2014 at 4:40 pm -


    The minimum credit score for an FHA loan is 500, and even then lenders have higher requirements. The lowest score I can think of offhand is 550. The collections may also pose a problem even with a higher credit score. And even then you’re probably better off getting your credit score a lot higher before applying for a mortgage to ensure you get a lower interest rate and avoid any hiccups. A broker might be able to do a search for you to see if there’s hope given your credit situation. Otherwise it might need to be resolved a bit before moving forward.

  18. Kerrie July 5, 2014 at 8:10 am -

    Are you required to make a mortgage payment in the same month you are closing on a FHA loan? They called for a payoff amount already and we should be closing before the 15 th of the month.

  19. Colin Robertson July 7, 2014 at 9:43 am -


    If you’re refinancing an FHA loan, you’ll be charged interest for the full month regardless of when you close. Most lenders try to close FHA refis near the end of the month for this reason.

  20. Martha J. Jimenez July 25, 2014 at 12:41 pm -

    I have a first and second mortgage on my primary residence in PA. I would like to purchase a condo in NC prior to listing my home in PA, and wish to continue employment with my current employer (in NYC) for another year or longer. I will not be renting out either place and would like to settle into a new place gradually. I have conventional mortgages on my home but am interested in an FHA loan on a NC condo. Is this possible?

  21. Colin Robertson July 25, 2014 at 1:34 pm -


    The FHA allows loans on primary residences, so if the condo will be your primary residence, it would technically be allowable. However, you’ll need to qualify for both payments and convince the underwriter that you’re actually going to live in the condo as your primary and make your existing property your second home. In that sense, it could get tricky, especially if you’re unable to qualify for both payments at once. You might want to speak to a few brokers to determine the potential hurdles beforehand.

  22. AssumeFHAloan August 3, 2014 at 12:19 am -

    Thank you, Colin, for all the great info.

    I am hoping you can help me with a few questions:

    We are considering buying a home from someone with an FHA mortgage. He acquired it from the owners before him. I assume the FHA loan can continue to be assumed during the loan and property’s lifetime?

    I read that to get a Streamline Refinance that the home has to have been lived in for 12 months or more, with payments made on time, for the mortgages “endorsed” before 2009. If a loan is assumed, when is the endorsement? At the start of the loan on property, or when new buyers buy the home and assume the mortgage?

    Also, is it possible that the seller in their short time at the home,18 months, took advantage of a Cash-Out refinance after 12 months? I wonder if so because without any real appreciation in value, little maintenance, and zero updates on the home, he is asking for 30k more.

    Thanks for any help you can provide.

  23. Colin Robertson August 4, 2014 at 9:57 am -

    You might want to speak with an FHA lender to iron out all those details, but if you’re interested in buying the house simply to get the assumable loan and then quickly refinance it, does that even make sense? Also, sellers can get value from that assumable loan when setting a list price, so that, coupled with the fact that home prices are back near all-time highs may explain why they’re asking so much. You might question the value of assuming the FHA loan.

  24. John Bluemke August 5, 2014 at 10:51 am -


    I am refinancing out of a HUD loan to a conventional loan. Wells fargo is only allowing for refinancing/payoffs on the 1st of the month – meaning they are charging me for the full month of interest – Is this legally permissible?


  25. Colin Robertson August 5, 2014 at 4:16 pm -


    Not sure it’s a legal issue, but the FHA’s practice of collecting a full month is unsavory at best. Your broker/loan officer should be able to figure out a way to minimize the interest expense, otherwise you might want to shop around.

  26. AssumeFHAloan August 5, 2014 at 6:19 pm -

    We are not looking to refinance. I was wondering if it is possible if the previous owner did. He seems a bit sketchy.

  27. Colin Robertson August 5, 2014 at 10:28 pm -

    It’s possible, could have your real estate agent do some digging for you. But like I said before, prices might be inflated right now, even with an assumable mortgage.

  28. John Bluemke August 6, 2014 at 6:04 am -

    Colin – So I think i have figured this out. When I entered into this loan it was Oct 30 of 2012. I did not make a mortgage payment until Jan 1 2013. Per Wells Fargo, they pay the FHA insurance in arrears – so the payment being collected when the loan is repaid is simply them collecting on money they previously paid out. This makes sense to me now.

  29. Jan Miller August 15, 2014 at 6:54 am -

    I purchased my home with an FHA backed loan 1 year ago. As instructed, I filed for a homestead exemption which I thought was supposed to take effect retroactive for the previous six months taxes. However, my mortgage payment has not reflected any decrease. Does the mortgage lender, Wells Fargo in this case, hold the escrow account or is it held by a third party? I want to know who to contact to find out when I will see a reduction in my monthly payment. Thank you!

  30. Colin Robertson August 15, 2014 at 10:00 am -


    Your point of contact is likely your loan servicer, the company that you make monthly payments to. Perhaps giving them a call will help.

  31. JP Sigmon August 19, 2014 at 4:46 am -

    Colin seems you have a lot of knowledge on FHA loans so I am looking fotr some advice. My county in Indiana maximum FHA loan is $271,000 but I am looking to build a new home that is $350,000. I have to use an FHA loan due to some circumstances how can I come up with the other $80,000 without coming all out of my pocket for the difference? Any other loans you can get on top of the FHA?

  32. Colin Robertson August 19, 2014 at 10:53 am -

    Hey JP,

    As I noted in the post already, it kind of defeats the purpose if you have a first mortgage with the FHA because most secondary lenders won’t provide a high enough CLTV to get the job done, but it depends how much you can put down. And if you must go with the FHA for whatever circumstances you have, it might mean that you won’t qualify for the second mortgage, assuming their guidelines are tougher. But you can certainly shop around and see what’s out there, you never know.

  33. Robert Schumann August 25, 2014 at 4:49 am -

    Hi – can an equity loan be obtained on a home that was gifted. My mother recently pasted away, her house was gifted to my sister. I heard that if you obtained an equity
    loan on a gifted house you then had to pay capital gains.

    A local big name bank is offering her a loan, but I don’t want the IRS to send her a huge bill for the capital gains.


  34. Keri August 25, 2014 at 6:47 am -

    Hi Colin,

    My fiance and I are trying to purchase our first home!! We have come across a few homes we likes that are manufactured with land. We heard those homes would require 10% down. Is this correct?

  35. Colin Robertson August 25, 2014 at 3:47 pm -

    Hey Robert,

    That’s a question better suited for your tax preparer or CPA.

  36. Colin Robertson August 26, 2014 at 9:47 am -


    Congrats on your first home! There are maximum loan amounts for FHA loans on manufactured homes that could limit how much you can borrow and it could also be limited based on your credit score as well (you need at least a 580 score for 3.5% down). Be sure you shop around to explore all your options. Lenders that specialize in manufactured home loans may provide higher LTV limits.

  37. Alfredo Reynoso August 29, 2014 at 9:35 pm -

    Hi Colin,

    I have an FHA loan on my current home for about 4 1/2 years. We are looking to relocate and sell our current home. Are we eligible for an FHA loan?

  38. Kevin August 30, 2014 at 2:11 pm -

    Can I get an FHA loan If I had 3 90 day late payments on my now paid off mortgage 12 mths ago?
    My current income and credit is great. My past is haunting me.

  39. Colin Robertson September 2, 2014 at 12:26 pm -


    Assuming you meet all of the FHA guidelines, yes. Your loan approval will likely be conditional on your current FHA loan being paid off when you sell your old house.

  40. Colin Robertson September 2, 2014 at 1:32 pm -


    You might be able to find a lender, though it depends on the other circumstances of the late mortgage payments.

  41. Allison September 11, 2014 at 11:36 am -

    Hi, I was wondering if more than 2 people can be on an FHA loan to qualify for a higher pre-approval amount? Like for instance me and my mother-in-law as the primary and co-borrower….and then add my husband as the co-signer? I’m asking because my husband doesn’t have good credit while me and my mom-in-law have excellent credit. And because the home we are wanting to purchase is over 400k, we don’t make enough unless we add another person. Is this doable in the state of Texas?

  42. Colin Robertson September 11, 2014 at 12:43 pm -


    It wouldn’t really make sense to buy a home with your mother-in-law if you’re married. And your husband’s credit would still be a factor if he co-signed so that doesn’t really solve that issue. The FHA allows really low credit scores so I’m curious how bad his credit is. Speak with some local brokers to see what’s possible in your situation. They might have some solutions for you, including raising his score.

  43. Michelle September 19, 2014 at 9:26 pm -

    I am trying to by a home with an FHA LOAN and was told by my lender that a $5000 reserve is required. I thought FHA did not require reserves on a single family home? Am I being duped?

  44. Colin Robertson September 20, 2014 at 6:38 pm -

    Hmm…did you ask why? Is your credit low, DTI high, is it a multi-unit property, or is there another reason why you need to bring money to the table? Perhaps an individual lender requirement?

  45. Katie September 21, 2014 at 11:11 pm -

    I bought my first home 3 years ago and have a FHA loan. I have a fair amount of equity in my home because it was a short sale and want to refiance the mortgage to pay off the second mortgage that was offered for my down payment. Do you think I could refinance to combine them? I am terrible at these things and looking for advice.

  46. Colin Robertson September 22, 2014 at 8:37 am -


    It’s possible to refinance two loans and replace them with a single loan, assuming you have the necessary equity. Speak with some lenders/brokers to determine what your best path is…you may also want to consider moving from FHA to conventional because FHA loans have gotten a lot more expensive thanks to the new mortgage insurance requirements.

  47. Marie Alston September 23, 2014 at 6:10 am -

    i am looking to buy a home i have two late mortgage payments from earlier this year
    is it possible to still purchase a home?

  48. Colin Robertson September 23, 2014 at 10:21 am -


    It might be possible – speak with some lenders/brokers that specialize in FHA (assuming you want to go with an FHA loan) and explain your situation. If there are extenuating circumstances for the late payments that certainly helps. And any other strong compensating factors will also help your cause.

  49. Dianne September 29, 2014 at 7:13 pm -

    I am wondering why I have to have so many inspections required by the underwriter on my property in order to refinance. I have a manufactured house, and inspections (along with the costs of the inspections) are mounting. The foundation, the lagoon/septic system, the roof. These were not told to me upfront, and have been a condition bit by bit. Is this normal?

  50. Colin Robertson September 29, 2014 at 9:27 pm -


    The FHA has Minimum Property Standards (MPS) that make it much more difficult to get financing with regard to the property itself, so these issues aren’t uncommon. Throw in the fact that it’s a manufactured home and there are even more guidelines that must be met.

  51. Michael October 8, 2014 at 8:46 am -

    Can you use an FHA loan as a construction loan?

  52. Colin Robertson October 8, 2014 at 5:00 pm -


    You might want to see if any FHA lenders offer construction to perm loans, also known as an FHA OTC (One-Time Close) loan.

  53. Casey October 31, 2014 at 4:12 pm -

    Hi Colin,

    How soon can I refinance my loan after purchasing a home? I want to remove my current co-signer on the loan, and add my mother to the loan and\or have her assume the loan altogether. Is this possible or do I have to remain on the loan as well?

  54. Colin Robertson November 1, 2014 at 10:17 am -


    You can generally refinance whenever, though certain lenders may have seasoning requirements such as six months. If you’re doing an FHA streamline refi, you must make six mortgage payments and 210 days must have passed since the closing date of the mortgage being refinanced. Speak to a few lenders to determine the best way of structuring the new loan, it can get tricky.

  55. momof04 November 19, 2014 at 8:20 pm -

    I need help understanding this,
    I’m about to do closing in a week from now but the lender keep asking me for more bank statement I’m tired to be giving so much information they know that I have the money in the bank can they stop asking because I’m about to stop everything and just relax and do it another time can someone help me understand and if this make any sense to anyone?

  56. momof04 November 19, 2014 at 8:21 pm -

    Sorry and is a FHA loan.

  57. Colin Robertson November 20, 2014 at 10:36 am -

    Ask them why they need more bank statements. It’s pretty common to be asked to send over the same documents over and over, or provide additional bank statements. And if you have the money, there shouldn’t be an issue other than your time being wasted. Just breathe…this happens to everyone and it’s certainly not fun to repeat the entire process a second time.

  58. Yvonne November 23, 2014 at 10:54 am -

    How do you begin to find AZ FHA lenders who offer FHA One-Time Close loans for site built homes? Also, if you own your land, is the value of the land considered toward the down payment if one qualifies for such loan?

  59. Colin Robertson November 24, 2014 at 1:25 pm -


    I’d probably just Google FHA OTC lenders in Phoenix to see who’s out there. I believe land equity can be used toward down payment, but discuss with the lenders you get in touch with.

  60. olga November 27, 2014 at 9:54 am -

    Hi there,
    FHA first time buyers, we found a house and paperwork in process now. Our lender asks for bank statements for the pas 2 months which havent been very high between 2-4k will that prevent us from getting approved? Before we can schedule appraisal? We’ve already done inspection on the home and payed down escrow 2k. Thanks.

  61. Colin Robertson November 28, 2014 at 11:58 am -


    It depends what your other loan details are…your loan officer or broker should be able to figure out what you need in order to qualify.

  62. Lori November 29, 2014 at 7:28 pm -


    Do you know if I am allowed to assume an FHA assumable mortgage (if investment property) or do I have to Owner Occupy it? I might have an opportunity for an assumption but I didn’t know if there is a restriction since its for investment purposes…

  63. DaMona December 1, 2014 at 5:16 pm -

    I was wondering, do you think it would be wise for me get out of my FHA loan and get into a conventional loan? I brought my house in 2009 at 5.5% and in April of 2013 then I refinanced it back through my bank Wellsfargo at 4%. To my surprise I didn’t realize that refining my home in 2013 added more time and money that I have to pay for PMI insurance. Now I am required to start all over on my PMI insurance and I will be paying $118 per month extra for this insurance until May 2018. New American Funding offered to take away the PMI and this will lower my mortgage. Should I just stick out these next five years with my current bank or go and get a conventional loan? Thank you

  64. Colin Robertson December 1, 2014 at 5:23 pm -


    Per HUD rules, FHA loans cannot be assumed by investors if the original closing date of the mortgage is after December 14th, 1989.

  65. Colin Robertson December 2, 2014 at 9:57 am -

    If it’ll be cheaper for you to refinance then you might want to refinance. Just consider closing costs. The FHA has become a very expensive option for homeowners and isn’t really advisable anymore unless you have no other choice. But do the math to make sure it actually makes sense.

  66. Shay L. December 4, 2014 at 6:59 pm -

    Hello Colin…my husband and I are trying to find FHA down payment options. We make over $102k / year and have only $1300 / month in monthly debt, but do not have 3.5% saved up for the down payment. He only has a pension and does not have enough to take out the down payment and I only have $2k in my 401k b/c I changed jobs in the last 3 months and emptied out my previous 401k before that to take care of other financial obligations. We do not have anyone that can gift us the down payment. Can we get a bank loan for the down payment and still qualify for and FHA loan if the house value is $215k? We are hoping that we can get the seller to eat the closing cost. The thing is, we have enough money to comfortably satisfy the mortgage and our other monthly obligations, but we just don’t have the down payment and we don’t know how much longer our “dream house” will be on the market.

  67. Colin Robertson December 4, 2014 at 10:08 pm -

    Hey Shay,

    You might be able to get downpayment assistance via your state housing finance agency if you qualify. Look up your state housing authority online to see what it offers.

  68. Shay L. December 5, 2014 at 10:40 am -

    Hi Colin,

    Thanks for the response. I’ve reviewed the guidelines for downpayment assistance and fortunately (but unfortunately in this instance) our income is too high to receive any assistance. Do you know of any other options for first time home buyers or do we have to just wait until we save up the downpayment, being that we can’t get a bank loan b/c it might mess up the approval process? I am also going to ask the broker. Thanks again for your assistance with this.

  69. Colin Robertson December 5, 2014 at 11:30 am -

    Maybe it’s possible to qualify for one of those programs with just one of you on the loan? In any case, a broker should be able to exhaust all possible options for you, that’s exactly what they’re good for. Good luck!

  70. Konrad December 6, 2014 at 11:15 am -

    We refinanced on 11/21/14 and the loan shows as paid off as of 11/28/14 and we were told that the escrow balance would be returned to use within 10 business days. On 12/5/14 a monthly FHA disbursement was paid from the escrow. Is this normal? Are the disbursements in arrears?

  71. Konrad December 6, 2014 at 11:16 am -

    For clarification, we refinanced from an FHA to a conventional mortgage using a different provider.

  72. Stevie December 6, 2014 at 1:53 pm -

    Hi Collin,
    I recently applied for an FHA loan and I was told that I qualify. My credit scores are very wide spread. 578-670-730. I have a foreclosure and repo on my report so the 578 shows that. I make 60k annual. I was wondering if I am approved, will I be able to get a loan for 145k on a single family house? If so, what would the interest be or how can I find that out? Also, many posts here say the mortgage insurance is high. Any idea what range the insurance is ($100 or $200 a month)?

  73. Colin Robertson December 8, 2014 at 12:13 pm -


    You’ll have to speak with some lenders or brokers to see if you qualify based on all your attributes. From there they’ll be able to quote you a rate as well. And yes, FHA mortgage insurance is very expensive, though it’s typically the only option for many borrowers so they might have no other choice. A broker/lender will also be able to explore options for you given your situation. Good luck!

  74. Colin Robertson December 8, 2014 at 1:49 pm -

    Hey Konrad,

    Could be the mortgage insurance for November. Ask your loan officer or the escrow company for clarification.

  75. Victoria December 10, 2014 at 8:01 am -

    We are in the market to buy a new home. We make over $100/year, have $400,000 in 401K, will have $240,000 cash from the sale of our current home which is paid for. We are working with an investor that suggests we put down 10% toward new home, invest the cash and draw monthly dividends to pay the mortgage payment every month. My husband has a low credit score of about 630. Is it better for us to try to get a FHA loan or a conventional loan and will we qualify for FHA loan with our income and assets?

  76. Colin Robertson December 10, 2014 at 10:31 am -


    Are you saying you make $100 a year, or $100k? I’m assuming the latter. Qualification will depend on the the size of the loan and corresponding monthly payment, but your numbers appear to be pretty good. Downside to the FHA is the mortgage insurance premiums, but interest rates tend to be lower than conventional. You’ve got to do the math to determine which is a better deal for you and how much you put down is preference (if you have that luxury), though mortgage insurance can be avoided with 20% down via conventional route. Might also consider improving husband’s credit score if you have time to do so.

  77. Nikki December 12, 2014 at 1:07 pm -

    Can an executor of an existing ‘estate of’ FHA loan assume the mortgage and simultaneously apply for a modification? (loan is already delinquent and thus can’t do the assumption)

  78. Trisha December 15, 2014 at 2:53 pm -


    I just closed on my mortgage. Our payoff included an amount necessary to go to HUD. The payoff was good through Dec 1st. Our pay off was received on Nov 26th. So before the date needed to make the payoff amount valid. My lender then took out another MI payment from my Escrow account on December 4th. Why did they do that? Shouldn’t our payoff had included all that I needed to pay? They said you pay your mortgage insurance in arrears and this payment would be for November. If that is the case then why did they include amounts to go to HUD on the payoff as well?

  79. Colin Robertson December 15, 2014 at 4:08 pm -


    Sounds like it may have to do with the payoff being dated December 1st. You may want to speak with your loan officer and/or title/escrow company for clarification about where each payment was applied and why. They should be able to clear it up for you.

  80. Michael December 16, 2014 at 2:30 pm -

    I recently changed career fields, i was paid a salary for the past 20 years and now I am 100% commission. My wife has had the same job for 18 years and makes $57k pr year.I have made $30k in the 6 months i have been in this new industry. To qualify for the home we want to purchase we need to make $82k per yr. Can we be approved for FHA with my career change 6 months ago? Just a note we have earned over $100k for the last 10 years, not sure if that maters. Thanks for your answer in advance.

  81. Colin Robertson December 16, 2014 at 11:48 pm -


    That might be a tough one. The FHA makes exceptions for borrowers who have recently changed from salary to commission-based jobs while staying with the same employer, but you’ve indicated a different field. The thought process is that they don’t know what you’ll actually make in your new commission-based position, even if your first six months were stellar. You may want to speak with a broker/lender or two to explore all your options.

  82. Bruce December 18, 2014 at 11:35 am -

    Colin, we currently have an FHA loan at 6% on our home that we have up for sale. We do not think the house will sell soon so we are considering an FHA streamline refinance to lower our payments down. Can we refinance while we have the home on the market? After it is off the market do we have to a wait to refinance? If so how long?

  83. Colin Robertson December 18, 2014 at 7:34 pm -


    You may want to speak with some FHA lenders for specific guidelines, but you’ll likely need to take the property off the market and provide a letter of explanation confirming your intent to keep the property as your primary residence before applying for a refinance.

  84. Erin December 30, 2014 at 12:40 pm -

    Hi we are currently selling our home and the buyers are getting a FHA loan. When the appraiser came our home appraised for more than the selling price. The appraiser from the bank, however, is requesting that we reside our garage prior to the sale. I am confused how this works. Why are we responsible for replacing the siding and is there anyway to get around this? The siding was tented in some places due to tree branches hitting it during a storm.


  85. Colin Robertson December 30, 2014 at 12:51 pm -


    The FHA generally has more requirements regarding the condition of the property to allow for FHA loan approval. Discuss with your lender/real estate agent to see what your options are.

  86. Ryan Packard December 30, 2014 at 1:27 pm -


    I’m impressed that you’ve been so present to answer questions on this blog. Nicely done and thank you!

    I have heard of loans being “called” by the lender where they decide they want the borrower to pay off the entire loan or a large portion of it all at once. This has happened historically few times when lending institutions need cash.

    I’d like to know if it’s possible that my lender can require me to pay a large sum of money all at once or “call” this loan. I feel in a way stuck in that I may not get what I would need for the property to make a sale worth it. On the other hand I bring in an extra $200 / month in income from this property but it is so old that I spend that on repairs. It would give me peace of mind to know that the loan cannot be called by the lender in any way, shape or form. How would I find this out? Does the FHA loan allow it or protect against it? Thanks!

    More Background if needed: I have FHA Loan closed in 2009. Duplex. Was primary residence. Moved out in 2011. Now is an income property. Doesn’t quite break even due to annual repair expenses. Usually I’m out about $800 / year. I’m at about 92% LTV (based on original value of the house at time of loan). Current market probably wouldn’t allow me to bring in too much more than the original appraisal amount. (which happens to be $193,000).

  87. Colin Robertson December 31, 2014 at 11:36 am -


    Why are you concerned that the lender would ask for payment in full? Are you planning on defaulting on the loan? Check your loan documents to see when the lender can accelerate the debt. I think it was common to call loans back in the 1980s when interest rates skyrocketed.

  88. Vicki January 1, 2015 at 1:07 pm -

    Hello, I have recently pre-qualified for an FHA loan for 290K, my credit score is 719, income is at 120K/yr. and I am supposed to go to closing at the end of January. The appraisal came in 10k higher than the selling price. I provided last 2 mos. bank statements along with all other docs., I have over 110k in a 401K, and now, my lender is questioning a negative balance on 1 mos. bank statements, as well as 2 overdrafts on the other months statement. Is this going to jeopardize pre-approval on an FHA loan? I thought that qualifications were less stringent for FHA loans?

  89. Heather January 2, 2015 at 12:00 pm -

    Can you explain reserves a little more? We are approved for an fha loan and got the 3.5% down but suddenly lender is springing 2 months reserves on us. Thanks!

  90. Colin Robertson January 3, 2015 at 1:18 pm -


    You might just need to provide a letter of explanation (LOE) to explain why the account was overdrafted. It’s certainly not a good sign when you get hit with an overdraft, but if you can explain it the underwriter should be able to move past it.

  91. Linda January 3, 2015 at 1:58 pm -

    My husband and I were looking to purchase a home with a FHA loan once I graduated nursing school in April. However, due to a new landlord, we may be forced to move. I wanted to wait so my new salary would be reflected on my loan application. I am guaranteed a nursing job at my hospital. Will the lenders take that into consideration?

  92. Ml January 4, 2015 at 7:44 pm -

    I’m looking to buy a house for 325000, but loan limits for fha is 271000. What. Are my options because i have to go with fha.

  93. Colin Robertson January 5, 2015 at 10:47 am -


    You might want to explore your options just to see if you can qualify via conventional financing as well. Higher loan limits and as little as 3% down could be an easier qualifying option with Fannie/Freddie.

  94. Colin Robertson January 5, 2015 at 11:23 am -


    HUD guidelines state that the new job has to be “a guaranteed, non-revocable contract for employment” and that it must begin within 60 days of loan closing. You may want to speak with some FHA lenders and get pre-approved now before intensifying your home search to clear any potential hurdles.

  95. DAMON January 5, 2015 at 11:44 pm -


  96. Colin Robertson January 7, 2015 at 10:41 am -


    Per HUD rules, if the loan was endorsed on or after December 8, 2004, a refund is due only if you refinance to a new FHA-insured loan. If your loan is older, there’s a chance of a refund and you’d need to contact HUD to see if you’re due any money. http://www.hud.gov/offices/hsg/comp/refunds/fhafact.cfm

  97. Colin Robertson January 7, 2015 at 7:53 pm -


    It means you need to prove that you have two months worth of housing payments (principal, interest, taxes, insurance) in your bank account. Lenders ask for reserves to ensure you are a sound borrower with the necessary funds to repay your loan. It’s possible your overall borrowing profile calls for the reserves to strengthen your loan file.

  98. kay sanders January 8, 2015 at 7:15 am -


  99. Colin Robertson January 8, 2015 at 11:17 am -


    Sorry to hear that. You may want to shop around more to get a second or third opinion in hopes of finding a bank willing to lend. However, it would probably be a good idea to get your credit cleared up before applying for a loan. Even if you could qualify for an FHA loan, you won’t want the lates and corresponding lower credit score hurting your chances of approval or raising your interest rate. Perhaps enlisting the help of a credit expert might help to clear up your credit report if your efforts haven’t been fruitful?

  100. Lynn January 9, 2015 at 10:25 pm -

    I refinanced my home in 2012 and had to take mortgage insurance because I didn’t have enough equity in my home. I want to sell and buy a less expensive home. Can I do this even though I have mortgage insurance and have not paid the 5 years? Will I owe anything at closing?

  101. Colin Robertson January 10, 2015 at 11:29 am -


    When you sell a home and the loan is paid off in full the mortgage insurance is eliminated.

  102. shannon March 16, 2015 at 12:11 pm -

    i have a question I wanted to buy house that am now living in and go through fha for loan they told me I couldn’t do loan cause im living here and paying rent with cash have receipts they wouldn’t do loan why??

  103. Colin Robertson March 16, 2015 at 3:09 pm -


    They want to know that you’ve been paying rent on time, and cash payments to an individual, as opposed to a property management company, are hard to prove without cancelled checks, especially if they are made to an interested party. Can you prove monthly withdrawals of the cash to pay rent, and/or can the owner document the monthly deposit of your rent payments? You can ask your loan officer what alternatives you have.

  104. Dd March 17, 2015 at 7:30 pm -

    We have a mortgage on a mobile home through greentree financing, but it is not listed as a mortgage on our credit report which is keeping our score down. My questions is if I have this changed to show as a mortgage on our credit score will that keep us from getting an FHA loan on a new home?

  105. Colin Robertson March 18, 2015 at 10:50 am -


    Probably not best to sneak around the FHA…and it may show up on a different credit report even if the one you’re looking at doesn’t have it listed.

  106. Shannon Buhler March 25, 2015 at 6:59 pm -

    We are looking into buying our first home and trying to decide how much money to put down. We are close to having 10% to put down. We are wondering if it is worth it to put more money down in terms of rates and insurance expenses? Or if it matters? This is an FHA loan we are looking at and the money we have is gifted money.

  107. AA March 25, 2015 at 8:23 pm -

    Hi Colin,

    I own a house insured by FHA in Dallas TX since 2008. I had been paying my mortgage on time until in 2004 I had 4×30 days and 3x60days late payments. I moved to GA in 2011 and rented out my house where as leases a house in GA. this month I move to Houston TX due to Job.since Feb 2015 I am regular on payments. I make 110K+ 20% bonus income per year. My current credit score is 617- 618 – 610. I have 5% down. I read on Hud.gov. website that if you are relocating you can get a second FHA loan, is it true?. Please advise what I need to do in order to get approved for 300K mortgage. I have till end of June to find a place to live. Thanks in advance

  108. Colin Robertson March 26, 2015 at 7:58 am -

    Hey AA,

    It’s possible but you’ll need to provide supporting evidence of the move and obviously qualify for the new loan.

  109. Colin Robertson March 26, 2015 at 8:40 am -

    Hi Shannon,

    A 10% down payment can reduce the requirement for monthly mortgage insurance to 11 years instead of the full loan term. With 20% down you can avoid mortgage insurance altogether if you can qualify via the conventional route.

  110. RebeccaH March 31, 2015 at 6:06 am -

    I am at the end of a refinance to a 7 year ARM on my home that I purchased in 2010 using an FHA loan. The loan is through Wells Fargo. My new title company and loan officer did not know about the extra interest I would be charged at my payoff, which is very unsettling because it is about $2000. How did she not know? Now, the title company is wanting me to close on April 5-7. I thought that Wells FHA loans have to be closed/paid off on the 1st of the month? I called WF and they said that if they receive my payoff anytime after April 1st that I would be charged more money. My new loan officer is saying otherwise because of a payoff statement that they received from WF. Who do I trust!? Can you explain the severity of the first of the month payoff? I of course want to spend as little as possible, so should I wait until the end of April?

  111. Colin Robertson March 31, 2015 at 10:46 am -


    Your LO should schedule your loan closing to minimize or eliminate post settlement interest. The FHA requires interest to be paid for an entire month so if you close early in the month you’ll have to pay interest for the entire month. This is why it’s best to close near the end of the month.

  112. Brian March 31, 2015 at 9:29 pm -

    Hello Collin I purchased my manufactured home just before the pmi changed in June of 2013, i was told by my bank I can refinance now and pull equity from the loan and get rid of my pmi all together. I called tonight to procede and was now told there is no lender that will give cash for equity to someone who owns a manufactured home. First is this true? Second what other options do I have ? Thank you very much any advice is greatly appreciated !

  113. Colin Robertson April 1, 2015 at 9:48 am -

    Hey Brian,

    I’m assuming you want to switch to conventional to drop the MI and pull some cash out. The max LTV for cash out on a manufactured home might be as low as 65%, so you’d need a lot of existing equity and remaining equity once pulling the cash out.

  114. Mike B April 3, 2015 at 5:26 pm -

    I have an FHA loan for a property in Denver CO that I have been living in for about a year. I plan to move to New Orleans soon. I will rent out my current property. I will want to purchase a new Multi-Unit Property in New Orleans using an FHA loan. I am self employed freelancer that makes my money over the internet. Good Credit. Will I be able to get a second FHA if I move? Will I need to prove a new job in that new city? Could I get the loan before I move? I cant seem to find any info on this online. Your site seemed helpful. Please let me know. Thanks

  115. Colin Robertson April 4, 2015 at 12:08 am -

    Hey Mike,

    If it makes sense to the underwriter it’s a possibility. Might be best to speak with some FHA lenders upfront to ensure there aren’t any issues. There’s also the conventional loan route to consider.

  116. M. Amos April 8, 2015 at 10:55 am -

    I have a relative in the process of purchasing a home, it is not their first home. They like the home that is about to be closed on. But a good friend has a home for sale. The second home is the same price as the first home they are in the process of buying. The credit score is not perfect but they have qualified for the first home. They are being told by the underwriter, if they try to qualify for the second home that is a little larger and in their neighborhood; that they would love to stay in because of the excellent school system; that the lender more than likely will not want to change the loan agreement to allow them to change to the second home. I guess my questions is, if the lender will not allow the loan to change to the second home, will the first home be disallowed?
    thanks for any suggestion or help you can offer.

  117. Colin Robertson April 8, 2015 at 1:03 pm -

    Did you ask why the lender has an issue with what they’re trying to do? Maybe they want them to cancel the existing purchase contract and sign the new one before reapplying for a loan for the new home.

  118. TIna April 11, 2015 at 10:16 am -

    My husband and I live in NC. Combined income of $120K/yr. Combined DTI of 12.8%. We both had very low credit scores and have been working to improve them. (previous divorce and lengthy period of unemployment when the economy crashed in 2008) His scores are Trans 582, Equifax 580. Mine are Trans 630, Equifax 641. (as of today, per credit karma) We are anxious to purchase a home and stop paying rent. We realize with our current credit scores, FHA is likely our only option. What is the likelihood of qualifying for a 3.5% FHA, and can you recommend a lender who may consider? I know that although FHA allows for a lower credit score, finding a lender who does is challenging. We realize that if we continue to improve our scores, we may be in a better position in a year or two, but we will be leaving our current rental soon, and I’d like to buy vs rent again. Any advice would be appreciated.

  119. Colin Robertson April 11, 2015 at 5:27 pm -

    Hi Tina,

    As you mentioned, your credit isn’t great, but your DTI is low and you make what appears to be decent income, hopefully with steady jobs despite the 2008 hiccup. Hopefully you have some assets set aside too. There are FHA lenders that go down to 550 scores, such as Carrington, which I wrote about last year and included in this very article if you scroll up. But that’s just one of probably many that offer FHA loans with scores that low. So it’s still probably best to shop around and find a lender you are comfortable with. Good luck!

  120. Summar April 14, 2015 at 6:30 am -

    HI Colin
    Can i get approval for an FHA loan if I want to buy the house that I’m renting for the past six months,

  121. Colin Robertson April 14, 2015 at 11:41 am -

    Hi Summar,

    You’ll need to speak with an FHA lender to determine eligibility. It depends on a number of factors including income, assets, job history, credit, etc.

  122. Summar April 15, 2015 at 9:02 am -

    I mean does it matter that I’m renting the house that i want to buy, does FHA Puts the condition of not having a relationship with the seller

    thank you

  123. Colin Robertson April 15, 2015 at 11:39 am -


    The key will be verifying on-time rental history via cancelled checks.

  124. Stephanie April 18, 2015 at 11:38 pm -

    Hi Collin-

    I am trying to purchase a home. I had to file bankruptcy due to parting ways with my fiance. I had excellent credit before that and have a credit score of 702 now. It will be 4 years since the discharge in Feb 2016. I will not qualify for a conventional loan until that 4 year mark. I even have 20% down. But since the only thing I qualify for is an FHA loan- I will be stuck paying MI anyways. I was wondering if I have a cosigner with excellent credit and financial means in case I default (which I won’t) is there any chance I could obtain a conventional loan with the cosigner even though I haven’t hit the 4 year mark yet?

  125. Colin Robertson April 20, 2015 at 6:29 pm -


    A co-signer won’t change the fact that you had a recent BK and your credit is also considered. Alternatives may include a portfolio loan (non-Fannie/Freddie), or perhaps getting that person to apply alone if they are a spouse or someone you’ll actually live with and they are able to qualify on their own.

  126. Shelly April 23, 2015 at 8:59 am -

    Hi Colin,

    How long does it take for the loan to be approved in underwriting? The loan has been in underwriting for 10 days now so getting kinda nervous!!

  127. Colin Robertson April 23, 2015 at 10:03 am -


    It depends on the lender and what turns times are like based on volume. If you have concerns, let your loan officer and ask for status updates.

  128. Steve April 29, 2015 at 10:38 am -

    So I get a deduction from the FHA. I go through the process and they want me to pay $750.00 to receive my government issued discount! Does that sound right? WTF mate?

  129. Colin Robertson April 29, 2015 at 11:05 am -


    What discount/deduction are you referring to?

  130. Michelle May 4, 2015 at 1:06 pm -

    Hi Colin,

    One lender is telling me that if we put 10% down then MIP on FHA is only for 11 years. Another lender (the one we have pre-approval with) is telling me that no matter what the MIP is for the life of the loan? I’ve looked at the applicable Mortgagee Letter and the 11 year rule seems right. Can a lender ignore this 11 year rule (for when LTV is at or below 90%) and make MIP for life of the loan?

  131. Valerie May 4, 2015 at 3:35 pm -

    We are in the process of buying a house, we put an offer on a house that needs some repairs, and we applied for an FHA 203K and were denied. Our loan officer said that we are approved for a regular FHA but not a 203. We just moved from NY to GA as per our loan officer as of June 2015 the requirements for an FHA loan will change and 2 years with the same employer will be required, which is impossible for us because we have only been here a year. Is that truth? or is our loan officer pushing us to get this house?

  132. Colin Robertson May 4, 2015 at 3:54 pm -


    The lender is probably either misinformed or giving you incorrect information. You may want to ask them again if you intend to use them to make sure everyone is on the same page. It should only be for the full loan term if the LTV exceeds 90% at origination.

  133. Colin Robertson May 5, 2015 at 3:19 pm -


    There are some changes coming this summer, though I believe the implementation date was extended from June 15th to September 14th, 2015. You could ask what specifically will change to affect your specific eligibility. I believe there’s a change that will require part-time employment to be uninterrupted for at least two years.

  134. steve May 6, 2015 at 10:01 am -

    I am referring to the FHA insurance rate reduction.

  135. Colin Robertson May 6, 2015 at 11:48 am -


    You’d have to refinance to get the new lower annual MIP rate, such as 0.80% or 0.85%. Just beware that mortgage insurance stays with the loan for at least 11 years now.

  136. Tran May 12, 2015 at 1:59 pm -

    I bought my house 2 years ago. I have FHA loans. When I signed the paper work, I asked the loan officer that they will take off the mortgage insurance when I paid up to 20% in 2 years, they said yes. But now I call wells fargo to request them to take off mortgage insurance. They told me have to wait until 5 years, then I can call them back to do that. Can you tell me what happens and what can I do? Thanks!

  137. Colin Robertson May 12, 2015 at 10:34 pm -


    When you got your FHA loan it probably required the annual MIP to be paid for a minimum of five years regardless of LTV. It should fall off once the LTV reaches 78%.

  138. Tran May 13, 2015 at 4:28 pm -

    I paid 86% off the house.

  139. Bri May 27, 2015 at 7:56 am -

    Hello Colin,

    I just refinanced from an FHA to a conventional, i closed 5/22/15, it is due to fund tomorrow. My question is, will i receive a refund of the mortgage insurance in escrow (my taxes have been paid for the year)?


  140. Colin Robertson May 27, 2015 at 9:32 am -


    Probably best to ask escrow or your loan officer/broker exactly what is being refunded.

  141. Larry May 28, 2015 at 9:56 am -

    I refinanced my house last year with a 15 year FHA loan. When I signed the papers last year my loan officer mentioned that the loan did not have mortgage insurance which someone forgot in the bank system. Now my bank wants me to pay mortgage insurance for the past months and going forward. Can they legally make me pay, even though the loan papers show no mortgage insurance?

  142. Colin Robertson May 28, 2015 at 11:35 am -


    Not sure of the legalities, but if mortgage insurance should have been included and was left off by mistake, the lender may have an argument to charge it.

  143. Christie May 31, 2015 at 7:34 am -

    Are FHA loans assumable if the owner is renting the property as opposed to living in it as primary residence?

  144. marc June 1, 2015 at 11:34 pm -


    You definitely have acquired an impressive following! I have recently been told that my FICO score of 581 will not help me qualify for an FHA loan here in Northern California, ( I had one reporting agency list my score at 610), however, both of the mortgage brokers I am working with have been very upfront in telling me that because my FICO score is not at least “620” I will not qualify for an FHA loan. I have worked for the same company for 20+yrs, average about $150,000 per year in income, and I am trying to buy the condo that I have been renting for the past 5 years from owners who now want to sell, and they want to sell to me! Am I missing something here? Thank you. Marc

  145. Colin Robertson June 3, 2015 at 4:28 pm -


    Maybe the folks you’ve talked to don’t work with FHA lenders that go below 620. There are indeed FHA lenders that go down to 550, though you still need other attributes like income and job to get approved.

  146. Colin Robertson June 3, 2015 at 4:39 pm -


    If you mean the current owner is renting it, approval would be based on the buyer occupying the property upon assumption.

  147. Marissa June 5, 2015 at 7:26 am -

    If my mom gifts me the money for the down payment on an FHA loan, does she have to provide her bank statement? She does not want to give a full detail bank statement to the lender. Any advice?

  148. Colin Robertson June 9, 2015 at 10:13 am -


    It might be possible to provide a withdrawal document or cancelled check that shows the money came from the donor’s account. Speak with your loan officer to determine what works with them.

  149. Nancy June 21, 2015 at 10:41 pm -

    We are obtaining an FHA loan because they’re allowing a higher DTI which we need. Although we are putting over 40% as a down payment, and will have an LTV of 54%, we are told that there will be mortgage insurance for the life of the loan. Is that right?

  150. Colin Robertson June 22, 2015 at 9:29 am -


    Mortgage insurance must be paid for 11 years if the LTV is 90% or less.

  151. Ashley June 22, 2015 at 12:30 pm -

    We are first time home buyers and I need advice. Is a FHA loan a good route to take or should I speak to someone at my bank and try to get a loan from them? I have over 600 credit score. I just would like to know where to start exactly.

  152. Colin Robertson June 23, 2015 at 8:09 am -


    It really depends on what you can qualify for…FHA is generally for those with credit scores below 620 and/or small down payments (check out by comparison post for the pros and cons). Your local bank may be a good starting point to see what you qualify for (ask for a pre-qual or pre-approval), though you don’t have to use your local bank to obtain financing when you’re ready to buy.

  153. Cesar June 24, 2015 at 11:34 am -

    Hello Colin,

    We are pre approved with a broker but my wife decided to drain our bank account to $100. I am commission based at my job so my 3.5% down payment will be there at closing. However, it’s not there right now. Will this be an issue once our paperwork goes to get a full approval?

  154. Colin Robertson June 29, 2015 at 11:58 am -


    Best not to touch the money in that account during approval process (as you probably know), but paychecks are typically treated as sourced and seasoned. Ask your broker to be sure how it will be treated.

  155. Sonja June 30, 2015 at 6:32 am -

    Hi Colin,

    Glad this thread is still open and you are responding. My husband and I are in the process of getting an FHA loan. After negotiations, we and the seller decided on 219K for the house. However, our broker has told us that the contract to purchase needs to reflect our need for the total loan amount (229K) because of escrow and closing costs. The seller will credit the difference through concessions at closing (still netting 219K) but I am worried about the appraisal of the home. Will it need to be worth 219K or 229K for us to get approved the full amount that we need?

  156. Colin Robertson July 1, 2015 at 2:18 pm -


    It will need to be worth the purchase price. Banks lend on the lower of sales price or current appraised value.

  157. Amy July 1, 2015 at 3:09 pm -

    Hi Colin,

    My fiance and I are in the middle of purchasing our first home together. The loan officer just submitted all of our paperwork to the lender. We have 730+ credit scores and verifiable income together of about 105K. Loan requested is 166k. My fiance is borrowing against his 401k for the 3.5% down payment. My concern is when they look at my bank statements because some of my deposits reflect more than my take home for that pay day because my dad has been helping me pay off my credit card debt. So there are a few deposits that are 200-700 more than my payroll. For the remainder of escrow, I am not depositing anything extra into my checking. Do you think the mortgage will still be approved?

    I forgot to mention that my loan is FHA.

    Thank you.

  158. Colin Robertson July 2, 2015 at 11:28 am -


    Do you have to provide those particular bank statements? If so, they may ask you to explain those large deposits and indicate that you haven’t taken on a new debt obligation in exchange for that cash. May want to discuss with your loan officer to determine best way to proceed.

  159. Annie July 7, 2015 at 1:15 am -

    Is it better to go with FHA loan at 4.5% with lender credit of $7500 for a loan of $625k or private loan of 4.8% with closing cost of $5174?

    The house price is 1.53m. I plan to pay off the loan after 6 months.
    Thank you

  160. Colin Robertson July 7, 2015 at 9:37 am -


    If you only plan to keep the loan for six months a lender credit is a good way to go because it covers your closing costs in exchange for a higher interest rate, but it doesn’t matter as much because you’ll only have that interest rate for half a year.

  161. susie July 7, 2015 at 10:27 am -

    I closed on a FHA loan about 12 weeks ago. Loan has already been sold from original bank to Wells Fargo…2 mortgage payments have been made. Today, original bank called telling me that FHA can’t insure the loan unless we are able to furnish documentation from our “gift donors” that shows the withdraw from donor’s bank account. I found a HUD document stating that this is, in fact, required. How can we be this far out from closing and this issue be brought up??? What happens if I can’t get that documentation from the gift donors? We had 4 separate gift deposits for this loan and I fear that some of those that gifted money won’t provide the documentation.

  162. Colin Robertson July 7, 2015 at 11:46 am -


    This sort of thing happens when something gets overlooked and is later discovered. You may have signed something related to errors and omissions for this very reason. Probably best to work with your lender to resolve the issue…everyone will likely be on the same side wanting to get it worked out.

  163. Lata July 15, 2015 at 1:51 pm -

    I filed chapter 13 then I converted it into a chapter 7, I have a foreclosure as well, How long will it be before I can apply for a FHA loan?

  164. Colin Robertson July 15, 2015 at 2:04 pm -


    3 years, or 1 year if extenuating circumstances.

  165. Ken July 21, 2015 at 9:46 pm -

    I am a retired real estate broker, my wife currently an active real estate broker (Alabama) and we’re working with an outstanding Tx Realtor, assisting our daughter in Houston, Tx with her first home purchase using an FHA insured loan. We made an offer on the perfect property but got a troubling reply from the “seller”. Seller is the builder on this 1 year old home which has apparently never been sold. Builder/seller leased the new home upon completion of construction and lessee’s lease has expired. Property now for sale. Builder, his real estate broker, and his mortgage broker, are partners in the “entity” that owns and is selling the property. Builder/seller replied to our offer verbally that they could not sell the property to a buyer with FHA financing because of a “recent entity name”change, unless the buyer used his lender, who has had success getting around the FHA regulation. When told to respond in writing, his answer was a little more ‘carefully’ worded. He said seller was asking buyer to talk to one of his lenders that have closed his listings before. Due to the FHA Flip Rule FHA, would not allow the home to be sold due to their recent entity name change. He said he has managed ownership but the name change is really messing up his buyers and that he has lenders who have cleared this condition in the past and successfully closed on the loans. Something doesn’t feel right about this. Hard to find good properties in our, price range in Houston right now and we would love to get this one done. BUT, we need insight from an expert here to get to the bottom of this. It will be on the up and up or not at all. Please advise. Thanks so much.

  166. Colin Robertson July 22, 2015 at 10:52 pm -


    Maybe ask how his guy would get around the rule and/or consider going the conventional route instead if possible to avoid the FHA rule. Also research the 90-day anti-flip rule.

  167. lexie July 23, 2015 at 11:14 pm -

    seller will not help with closing cost, but i know that the house is/has been appraised for close to 175000 and he is only asking 100000. we put the 3.5% down but my question is how can i get help with the closing cost?

  168. Colin Robertson July 25, 2015 at 8:32 am -


    You could take a lender credit to cover the closing costs, or look into a state housing assistance program, or ask for seller concessions whereby he raises the purchase price.

  169. Rosa Castillo August 4, 2015 at 2:29 pm -

    Do you have to pay mortgage insurance on an FHA loan if your coming in with 25% down payment on the purchase?

  170. Lorin August 8, 2015 at 2:44 pm -

    Hi Colin,

    I want to buy a condominium and read about the FHA Approved Condominium data base that lists all condos already FHA approved. I plugged in my info and couldn’t believe that it didn’t have even one approved condo in the entire state of Illinois.

    My sister already lives at the complex I’m interested in buying into. It has two, 3-story buildings each with an elevator and underground parking garage. They were built in the 70s, have been maintained well, and have plenty of funds set aside for continued upkeep, etc. The only allow a small percentage of non-owner occupied units.

    Will it be hard to find a lender to finance an FHA loan around $65,000?

    Thanks for your insight,

  171. Kim Houston August 10, 2015 at 12:54 pm -

    I’m in the process of refinancing my home after being a victim of predatory loan practices by a mortgage broker and my spouse. I didn’t read all the documents and sign a 30/40 yr balloon adjustable rate loan. The new loan will be a 30 year fixed FHA loan. The payoff on the loan is approximately $209,000 but with all the fees on the new loan I would be refinancing $218,915. The estimated fees are orignation $2151, appraisal $553, mortgage insurance premium $3765, title services $1,238 and miscellanous fees. Are these closing fees reasonable? Also, I’m paying $143 per month in mortgage insurance in addition to the premium above.

  172. Tom August 14, 2015 at 5:38 pm -

    My CPA says that if I sell my home within 5 years, HUD will refund me the unused portion of the upfront MIP I payed when I bought my home. Is that true?

  173. Colin Robertson August 16, 2015 at 9:03 am -


    Yes, now mortgage insurance is mandatory on FHA loans no matter what. See my charts on annual MIP here: http://www.thetruthaboutmortgage.com/detailing-the-fhas-new-annual-mortgage-insurance-premium-structure/

  174. Shawn Wilson August 19, 2015 at 7:03 pm -

    Hello Colin, i have an FHA loan at 3.37% for 30 yrs obtained Dec 2012 because i could only put down 3.5%. I was misinformed about how long mortgage insurance stays on the loan. The house has now appreciated more than 20% and I have been told it doesn’t matter and that mortgage insurance will stay on it the life of the loan (it irks me because it is $86 a month). I now have a chance to refinance with a conventional loan at 3.8% for 15 yrs. I have been told it will do away with the mortgage insurance because it’s a conventional loan. tempting, but am I making the right decision to refinance? thanks so much.

  175. Colin Robertson August 20, 2015 at 9:21 am -


    Mortgage insurance is just one aspect of the decision – you’re also switching from a 30-year to a 15-year loan and the rate is higher. Look at everything while also taking into account your plans with the house/mortgage, how long you plan to stay, your goals, etc.

  176. Tim August 24, 2015 at 10:10 am -

    If an employee is buying a home from an employer is there a max LTV?
    And if so, why?

  177. Colin Robertson August 26, 2015 at 3:43 pm -


    It may be treated as a non-arms length transaction and possibly a conflict of interest, which could limit the LTV to 85%.

  178. Justin August 27, 2015 at 6:08 pm -


    I am impressed with how many comments you’ve replied to.

    We bought a house with an FHA loan in June 2013. We got in before the insurance rules went to 11 years, we’re in a 15 year mortgage with 5 years of PMI or 78% LTV if I remember right.

    My question is what if we want to sell/refi before our 5 years are up? Are we still on the hook for the remaining PMI?

  179. Colin Robertson August 28, 2015 at 11:27 am -


    If you sell/refi to conventional the mortgage insurance stops. MI covers the loan, if the loan is no more, insurance isn’t necessary.

  180. Lisa September 1, 2015 at 10:15 am -

    Hi MIP was deleted from my loan and I received a letter from my lender stating, “We are pleased to inform you that HUD has revived and approved our request to eliminate the Mortgage Insurance Premium (MIP) coverage on your loan. There will be no further payments payable by you in connection with the MIP.” Three months later my loan was sold to another lender. A month later I sold the property, and the new lender collected two months worth of MIP at closing. I did not know this because I did not receive the payoff statement until after closing. I have tried to contact the new lender and get a reimbursement of the MIP collected from me at closing because MIP was deleted 4 months prior. The current lender is saying I still owed the MIP. What are your thoughts?

  181. Colin Robertson September 1, 2015 at 6:36 pm -


    Ask them why you owe the MIP and for which months. Since mortgages are paid in arrears sometimes it seems like you already paid something when in fact you haven’t.

  182. carol September 2, 2015 at 10:58 pm -

    I know that FHA and any mortgage for that matter require that you have hazard insurance on the property. My question is, am I allowed to choose the company I want to buy the hazard insurance from as long as it meets lender requirements for coverage and amounts. This is for an FHA guaranteed loan that has been two months in the making. Now the mortgage broker says it will be at least another 3 weeks because of the wildfires in the northwest. He says the insurance company is not issuing new policies at this time. Can I look for another insurance company on my own that would be willing to provide coverage?

  183. Colin Robertson September 3, 2015 at 9:04 am -


    You should be able to select the homeowner’s insurance of your choice.

  184. Justin September 4, 2015 at 1:19 pm -


    If you sell/refi to conventional the mortgage insurance stops. MI covers the loan, if the loan is no more, insurance isn’t necessary.”

    That’s what I was hoping, thanks for your reply, with rates coming in it seems like a good time for us to either sell or refi, we’ll see what our finance guy has to say.

    Thanks again for helping me and so many others on this post.


  185. Sue Meckeler September 4, 2015 at 3:08 pm -

    Hello, I work for a firm that helps trouble homeowner’s. Can a FHA loan be sold to another lender and no longer be an FHA loan? I have a client who executed a FHA mortgage in 2007 and went into default in 2012. Loan has switched servicers and they applied for mortgage assistance with the new Mortgage company. The loan modification offer does not follow FHA loss mitigation guidelines. What happens when a borrower defaults on a FHA loan?

  186. Florence Homan September 5, 2015 at 4:22 pm -

    My husband and I just purchased a home in SC. We obtained an FHA loan. We also own a coop in NY which is free and clear. We were asked at closing to sign a paper saying we would make this home our primary residence. Now we are finding out that if we make this home in SC our primary we will lose our medical coverage. What do you make of this? Thank you.

  187. matt September 6, 2015 at 5:05 pm -

    I got approved for a house for 83000 and up but im looking at a cheaper foreclosed home at 64000 its not more than ten years old is that ok

  188. Colin Robertson September 8, 2015 at 9:15 am -


    That sounds like an issue with your medical insurance, and new FHA loans are only good on primary residences which is why they asked you to declare that.

  189. Colin Robertson September 8, 2015 at 9:37 am -


    Sometimes very small loans can be harder to obtain, but ask your lender if it’s an issue.

  190. Heather September 14, 2015 at 11:18 am -

    I bought my condo with an FHA mortgage in 2005. At that time, I was told that the mortgage insurance should come off in 7 years, but could not be removed prior to 7 years, even if I paid off a significant portion of the mortgage. My loan was quickly sold off to another bank. When I inquired about having the mortgage insurance removed, I was advised that because I live in a condo, I can never have it removed. I don’t understand this at all. Are you aware of this rule? It doesn’t seem right, and is contrary to what my lender told me when I got the mortgage. Additionally, I am now at 64% LTV.

  191. Colin Robertson September 14, 2015 at 3:13 pm -


    Do you think they’re confusing property insurance with mortgage insurance? The 7-year estimate was likely based on original amortization schedule if payments were made as expected.

  192. Lamar Washington September 18, 2015 at 9:08 am -

    Hi. I am looking into purchasing home for 1st time. I have been going thru credit restoration and currently my scores are EQ 657, TU 600 and EXP 610. But that is score with a soft pull. I know when mortgage companies, they will get a different score. I would like to go FHA, 3.5% down. my yearly income is about 90K. Should I wait longer or should I work with mortgage company to apply? I was told that your FICO should be minimum of 640. But I also spoke with a company named Carrington that say they will work with you if your score is lower than that. Thoughts?

  193. Heather September 18, 2015 at 11:28 am -

    Colin, thanks for the reply. I don’t think so, no. I don’t have property insurance bundled into my mortgage. My concern is not so much the 7 year rule, but the fact that my mortgage company is now telling me that because I’m in a condo, they can never remove my fha mortgage insurance. Have you heard of this? I’m having trouble verifying this.

  194. Denise September 23, 2015 at 9:30 am -

    I have a FHA loan and I want to combine my HELOC with my first mortgate to have one payment. Will I be able to do the FHA Streamline Refinance.

  195. ELLIS September 24, 2015 at 9:13 am -

    HI, My husband and I are currently in the process of purchasing a home through a fha. Our closing date was set to be last week but was changed the day before due to the seller not disclosing that the house was being flipped in less than 90 days. I was told that the home has to get more appraisals. My question to you ; How long could this process now take? Could I ask the seller to compensate us for the delay?

  196. Colin Robertson September 25, 2015 at 8:33 am -


    I’m sure you could ask them to compensate you if it’s their fault and there are costs, not sure they’ll agree. Appraisal turn times can vary, hopefully it’s expedited.

  197. Colin Robertson September 25, 2015 at 8:37 am -


    A streamline will only allow you to resubordinate the second mortgage while refinancing the first mortgage.

  198. Jennifer Ledford September 26, 2015 at 11:30 am -

    I am currently in a lease till June and put a contract utilizing an FHA loan to purchase. To fulfill the obligations of my lease term, can I rent out my house after I close till the end of June satisfy the terms of my lease? I would move into the house in June as my primary.

  199. Colin Robertson September 28, 2015 at 11:54 am -


    FHA loans are limited to owner-occupied principal residences only, so they’ll expect you to occupy it as your primary residence. Maybe your landlord will be able to work something out with you to break the lease if you can find a new tenant for them.

  200. Doug September 29, 2015 at 6:27 pm -

    Colin, I am getting close to closing my FHA mortgage. I have two loans out to friends who are willing to pay back what they borrowed. It’s $2100 and $2700. Can I use the repayment in my downpayment? I have ledger with dates and amounts to verify. Do you see problem with me using as cash in my downpayment?

  201. NB September 30, 2015 at 10:58 pm -

    Hi Colin,
    I was qualified for a fha loan without my wife’s income although we filed jointly for the past 3 years.
    We need closing of 16K but we’re short 3k. Can she borrow from her 403b and gift it to me?
    Would the lender have a problem with this? LTV or wife gifting husband?

  202. Colin Robertson October 1, 2015 at 10:38 am -


    Best to ask your loan officer, but gifts are generally okay. Might also be able to structure loan with less closing costs.

  203. Colin Robertson October 1, 2015 at 10:47 am -


    The documentation may help, but you’ll need to run that by your lender to see if it’ll fly.

  204. Jamie October 8, 2015 at 1:59 pm -

    Colin, if I orginally live in my home and then decide to rent it out under the fha mortgage, will that be an issue? And if so what r the penalties?

    I’m ny resident, I’m sure it varies.


  205. Colin Robertson October 15, 2015 at 8:53 am -


    The FHA requires borrowers to establish bona fide occupancy in a home within 60 days of signing, and continued occupancy for at least one year. After that you can rent out of the home.

  206. Denise October 22, 2015 at 8:17 pm -

    I got FHA loan with Bank of America 10yrs ago. The loan has since been bought by Carrington Mortgage. My loan is assumable and my son wants to assume my mortgage (he would qualify) but Carrington says they will only refi my loan, in both our names and after 6 months he can apply for own loan. Or he can apply for a regular loan (incurring closing costs & down payment). There is equity in the home but I don’t any to “Gift” the money to my son so the bank gets it in the closing costs. I don’t want my name on the home anymore because my income has decreased significantly…(debt to income ratio). Son has been making the payments for over a year & should benefit from the tax right-off. How can I get my assumable mortgage to be honored???

  207. K October 24, 2015 at 10:49 am -


    I do not know how I stumbled here but your advice appears to be very sound. I really need help with all of my “friends” telling me what to do. I had a near “perfect” credit score less than five years ago. Maintained the same job for 13 years, had saved sizable amount of money and my home (currently worth approx. 250K) paid off. My father died and bequeathed everything to me which was, unfortunately an incredible amount of debt. I had a great estate attorney and we got through that. To try and make a long story short (which is a really long sentence :)) Having to leave my career, move to his town, pay his debt while maintaining my property, his property, his business (I was an abysmal failure at that), I spent my savings, my retirement, and blah blah but my credit became horrid. I’ve returned to my home and own four pieces of land. I am not employed and wish to move. I have found property that I want – asking price about half of the home I am in. No one will help me – due to unemployment and poor credit rating (mostly late payment of bills). I am very employable but do not wish to stay here any longer. I know this is not a short story but I am running into walls I never knew existed and am very shamed. Can I get an FHA loan, ANY loan to purchase the property I want, while this one is on the market? I expect it will sell easily as do the realtors that I have consulted. Thank you for your time and if you don’t respond – that’s ok too.

  208. maurice October 26, 2015 at 3:25 pm -

    Hi Colin,

    I’m going to paid off my FHA loan soon. my closing date is Nov 3 2015. Do I have to paid the total amount off the interest for Nov.


  209. Colin Robertson October 26, 2015 at 3:49 pm -


    The FHA doesn’t allow for partial month’s interest payoffs which is why it’s recommended to close around the end of the month to avoid paying interest unnecessarily.

  210. Colin Robertson October 26, 2015 at 4:08 pm -


    It’s tough to get a mortgage if you don’t have steady employment/income, though some lenders offer asset-based loans backed by Fannie/Freddie or portfolio loans (lender-based guidelines) whereby they use your assets as income to qualify. The hitch is that you needs lots of assets because they’re divided by 360 months (30 years). If you’ve tried lots of different lenders/brokers you may need to pay in cash, assuming you have cash.

  211. Colin Robertson October 26, 2015 at 4:47 pm -


    Generally a loan is assumed because the interest rate is low…I doubt the rate you got 10 years ago is lower than current rates, but if you want to keep the current mortgage (which also may not have mortgage insurance) to stay on track with the original payoff and pay it down that’s another story. If Carrington won’t help have you considered speaking to other lenders? Most lenders that have your existing loan don’t want to touch it unless it benefits them.

  212. dick October 30, 2015 at 1:21 pm -

    is it legal for me to accept a secret second from the buyer on a FHA loan

  213. Colin Robertson October 30, 2015 at 3:18 pm -

    Secondary financing should be disclosed at the time of application, see: https://portal.hud.gov/hudportal/documents/huddoc?id=4155-1_5_secC.pdf

  214. Alex October 30, 2015 at 11:57 pm -

    Hi Colin,

    I am hoping you might be able to answer my question regarding extra payments on an FHA loan. How are monthly interest payments calculated on an FHA if I were to pay extra payments at different times during the month. Can I only pay my extra payments at the first of the month?

    The reason for this question is I am trying to paydown my mortgage fast. I am thinking about refinancing from a 5/1, 30year arm at 4.875% I got in Oct 2014 to a 30 year FHA loan at 3.5% to lower payments despite the PMI. Oct 2015 marks the 3 year mark after a foreclosure that is the reason I got 5/1 Arm in the first place because the only lender who lend to me are portfolio lenders. And I cannot qualify for a 30 year conventional loan.

    Or are their FHA traps that I need to be aware of and just keep my 5/1 arm. I currently pay extra on the Arm to reduce the principal. In fact, on the 5th year of my arm I would be eligible to refinance into a 30yr conventional loan.

    Any insight would be much appreciated

  215. jose October 31, 2015 at 9:37 am -

    Hi I am a week away from closing on a fha loan already submitted my EMD and supplied all necessary documents. i submitted my lease of the property ive been renting for the last 5 years. on the lease the owner is listed and the realty company is listed with the phone number to realty company and the owners cell. For whatever reason the realty company number cant be reached and the owner told me he recieved a voicemail from the lenders he called back with reference number left to him. I pay through money orders and only have a couple moneyorder reciepts and walmart reciepts of money order purchases. I cannot give bank statements withdrawls because I always buy with cash and put the rest on my debit card. so my withdrawls will be diffrent everry month (will not be the same as rent). Can i loose my dream home because of this? like i said I have met all other qualification and supplied all documentation of everything else. Do not know what to do. please help

  216. Allen November 3, 2015 at 8:05 am -

    Collin, I purchased my home with an FHA loan in March of 2014. Since then I receive on a daily basis letters from “lenders?” telling me to contact them in order to lower my PMI, due to some new law. I usually see these as scams and do not contact. But is this real? Am I leaving money on the table?

  217. Colin Robertson November 3, 2015 at 11:39 am -


    There was a cut in mortgage insurance premiums early this year but that doesn’t mean it makes sense to refinance. You have to compare rates and also closing costs and consider what you plan to do with your mortgage (pay off or refinance again or sell).

  218. pam Stauber November 6, 2015 at 9:40 am -

    We are sellers..buyers are going FHA. We have not had our third delay in closing. Does the lender know up front what documents one needs in order to get the loan closed? We have had to come up with, what we feel, are documents that should have been dealt with at the beginning of the process. We are very frustrated sellers and are ready to withdraw the contract.

  219. Colin Robertson November 9, 2015 at 3:40 pm -


    Unfortunately, documentation requirements can vary depending on the borrower and what they send in, which may prompt further documentation. You’ll never know with absolute certainty what may come along during the underwriting process.

  220. cb November 12, 2015 at 2:55 pm -

    sorry, realized my last attempt at posting must have been a novel (maybe that’s why it’s not showing up?) – but basically my question is:

    as a seller, shouldn’t i have been told when my buyer went from pre-approved for a conventional loan with excellent credit, and in our contract agreed to 20% down – to weeks and weeks of delays now to find that final loan documents show it’s 100% financed?

    especially when we have a rent-back agreement that’s affected by his new, much bigger mortgage payment?

    and more especially because it looks like we’re going to lose our (contingent) new home – because our seller can’t wait anymore? loan docs got to title monday, he signed that night – still not funding today…. our buyer walks if we don’t close that sale tomorrow.


  221. Colin Robertson November 19, 2015 at 9:53 am -


    Not sure who would tell you about the buyer’s loan status to be honest. I’m assuming they’re doing their best to close the loan, even if terms changed (probably out of necessity).

  222. Elba November 24, 2015 at 2:25 pm -

    í just bought a house 3 months ago with a FHA loan, now I have to move out of Miami because the company is relocating me. Am I allowed to sell the house? is the a penalty or a limit time for it to be active?

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