Using Rental Income From Units to Qualify; Vacant Units; Illegal Units

I blogged recently about “House Hacking” (here and here) or buying multiple-unit properties in order to use the rental income to subsidize one’s mortgage payment. We received numerous questions in response that made for some great blog fodder, discussed below. How much rental income can we use? For all units that will not be occupied […]Read More

No Bubble Here; FHA Condo Spot Approvals

FHA CONDO SPOT APPROVALS ARE BACK STARTING TOMORROW Starting tomorrow, an entire condominium complex will no longer need to be “FHA Approved” for a buyer to use FHA financing to purchase a unit within the complex. Buyers can now obtain what is called a “Spot Approval” to get just get a single unit “FHA approved.” […]Read More

Competing With Builder Financing – False Enticements & Lender Credits!

Most new home builders offer large credits to buyers who opt to use the builder’s preferred mortgage company. The credits come in the form of interior “upgrades” (better floor coverings, cabinets, appliances, etc.) and/or in the form of closing costs. Sometimes the builders’ offers are very competitive b/c the builders are willing to “give away […]Read More

If Property Won’t Appraise, Change Financing!

AGENT KNOWS PROPERTY WON’T APPRAISE We have a buyer who is willing to offer $750,000 for a property with 10% down. The problem is that, according to her agent, “the property will never appraise for more than $680,000, b/c there are no comparable sales anywhere above $680,000.” There are also cash offers so the seller […]Read More

FHA Financing Is Fast, “As Is,” & Easy; 15 Day Close

Heejin and I did a presentation yesterday on marketing for real estate agents, based on everything we have seen work and not work with the hundreds of agents we have worked with. It went really well, and if anyone would like to see it, please let us know. But, this blog topic surfaced after the […]Read More

FHA Reminders: Attached PUDs, Refi’s to 96.5%; Cash-out Refi to 85%

A few quick but important reminders about FHA Financing, as we get questions often: 1. FHA financing is available for all Planned Unit Developments (PUDs) or “townhomes,” even if they are attached and in large complexes that look like condos. As long as they are not zoned as condos, they are eligible for FHA financing […]Read More

We Push 5% Down Conventional Over FHA, If Loan Is Under $417,000

We had a buyer come to us this weekend who had been approved for FHA financing by an online lender. The buyer, however, was very well qualified and should have been encouraged to take 5% down Conventional financing over 3.5% down FHA financing. Conventional financing is better than FHA financing, when buyers qualify, for the following reasons: 1.) […]Read More

FHA Not ONLY For 1st Time Buyers; Who Uses FHA Financing?

FHA Financing is not just for first time buyers. FHA financing can be used by anybody who does not currently have an FHA loan. FHA financing is best for borrowers with limited cash, tight debt ratios, and/or credit issues. FHA is the most forgiving type of financing when it comes to all of these issues. […]Read More

FHA Financing for “Fixer;” Save Cash For Repairs; Refi Later

We sometimes have buyers, with ample cash, use FHA financing to buy total “fixers” and then use their cash savings (from the smaller down payment) for improvements. Once their improvements are done, they come back to us and use their much higher appraised value to do a no-cost refinance into a conventional loan. For example, […]Read More

“Title Only” (On Title; Not On Loan); OK at Most Lenders

This is a reminder that almost all lenders allow spouses, partners, children, etc. to be on purchase contracts and therefore to be “on title” to a property, but not on the loan. This is called “title only.” We commonly advocate this when a spouse or partner has little or no income, and/or credit issues that […]Read More

“Windows Boarded Up? Can We Finance?” B of A – 83% Refis!

A Listing Agent called us Friday about an offer he received from one of our borrowers (our contact info is prominently displayed on our pre-approval letters so we get Listing Agent calls often). In this case, the Listing Agent was concerned about the fact that the windows were completely boarded up on the 2nd story. […]Read More

When Is One Year Seasoning for Foreclosure or Short Sale OK?

A few lenders are now touting their ability to obtain mortgage financing for borrowers as soon as 1 year after a foreclosure or a short sale with late payments. This is, in fact, possible, but only under limited circumstances. It would be misleading to imply that it is available to everyone. FHA’s “Back to Work” […]Read More

Cannot Finance in name of LLC or Corp.; Individuals Only

This is a reminder that borrowers for conventional and FHA Financing must be individuals. They cannot be partnerships, LLCs, or corporations. Many borrowers wish to obtain financing in the form of legal entities other than themselves, and they cannot. Jay Voorhees Founder/Broker | JVM Lending (925) 855-4491 | DRE# 01524255, NMLS# 335646Read More

When VA /FHA Clearly Stronger Than Conventional? Large Down

We often have buyers willing to take VA or FHA financing even though they have substantial funds for down payments. The reason is that they are often bidding on properties that will be difficult to appraise because of the lack of closed comparable sales (necessary to “bracket” the purchase price). Sellers often want appraisal contingencies […]Read More

“30% Equity Cushion” Necessary for Rental Income, Not Qualifying

Buyers who wish to retain and rent out their “departing residence” (instead of selling it) must have an “equity cushion” of at least 30% for conventional financing or 25% for FHA financing, if they wish to use rental income from the departing residence to qualify for their new purchase. The “equity cushion” is the amount […]Read More

15 Year Fixed FHA Loans Have Low to NO Mortgage Insurance

Many of our well-qualified borrowers are forced to use FHA financing b/c of its more flexible credit standards or b/c of its higher loan-limits. This often frustrates them b/c FHA MI rates are high and imposed no matter what for FHA loans with 30-year amortization rates. What many borrowers do not know, however, is that […]Read More

Parents Helping Child with Limited Income Buy Condo?

We often have parents helping children with limited income buy properties in which the children intend to live. There are 3 options for such parents: (1) FHA financing with the parents signing as a non-occupant co-borrower – requires 3.5% down; (2) Owner Occupied Conventional financing with the parents signing as a non-occupant co-borrower – requires […]Read More

3% Down Condo Financing; Alternative to FHA for Strong Buyers

One of our Private Mortgage Insurance providers now insures condo financing with as little as 3% down (for loan amounts under $417,000). This is a huge boon for first-time buyers with limited cash who are looking to buy in complexes that are not FHA approved. We have been touting 5% down condo purchases as an […]Read More

Loan Over $417,000? 2 Options: 10% Down or 3.5% Down FHA

If loan amounts are under $417,000, buyers can get conventional financing with as little as 3% down, as well as FHA financing with 3.5% down. If loan amounts are over $417,000, however, buyers still have only two options: conventional financing with 10% down or more, or FHA financing with 3.5% down. This is an important […]Read More

Getting Out of FHA MI?? FHA Assumable??

There is still much confusion about FHA loans, so we are addressing two issues today: (1) getting out of MI; and (2) if FHA loans are ‘assumable’. You can get out of FHA MI, but ONLY after a minimum of five years, and ONLY if your LTV drops to 78% or below. Many loan officers […]Read More

FHA Appraisals Are Public Record; New Compensation Rules

In most cases, once an FHA appraisal is completed and released to FHA, the appraisal becomes “public record”. This means that going to a new lender to get around a low value or poorly prepared report usually will not work. This comes up often for us with FHA deals. Appraisals come in low, and sellers […]Read More

FHA MI – Does Little Good to Put More Down; FLIPs OK

Today one of our clients made an offer on a FLIP property (bought less than 90 days ago) and the seller was refusing ALL FHA offers until July 1st. BUT, FHA allows for FLIPs now. Fortunately, the seller called me after getting our very strong and emphatic “Pre-approval letter”, and it looks like our offer […]Read More

FHA Not Only for First Time Buyers; FHA MI to Increase Again

We still get many home-buyers who think FHA financing with 3.5% is only for “First Time Buyers”. That is NOT the case, however. ANY qualified buyer can take advantage of FHA Financing, as long as the property will be “owner occupied”. FHA is increasing their monthly Mortgage Insurance from 0.90% to 1.15% for ALL case […]Read More

FHA (3.5% Down) is NOT just for First Time Home-Buyers

FHA Loans are NOT only for “First Time Home-Buyers”. Many Realtors are confused by this. ANY qualified buyer can obtain FHA financing as long as he or she does not have FHA financing currently in place against another property (in most cases). Buyers can have/get TWO FHA loans if a move is necessitated by a […]Read More