FHA Handbook

FHA Handbook

Similar to conventional mortgages, FHA home loans are governed by a set of rules and guidelines that participating lenders must adhere to in order to be insured by the U.S. government. These rules are compiled in a reference book known as HUD 4000.1, or the Single Family Housing Policy Handbook (SF Handbook).

The SF Handbook contains the regulations for FHA loans, including guidelines for “forward mortgages,” which are intended for borrowers looking to purchase a house, condominium, townhome, manufactured home, and other property types. Additionally, the Handbook provides rules for FHA refinance loans and FHA “reverse mortgages” available to qualified borrowers aged 62 or older.

As a potential homebuyer exploring mortgage options, you must meet several requirements to qualify for a loan. Many of these guidelines are detailed in HUD 4000.1 and serve as a reference for FHA’s minimum credit standards, appraisal criteria, and more. However, it is important to recognize that state and federal laws, lender-specific standards, and other regulations may also come into play, in addition to those outlined in the FHA Handbook.

Joint Loan

A joint loan is a mortgage with a co-borrower who shares repayment responsibility. Their credit score and income can help you qualify for the loan.

Co-signer

A co-signer can aid your mortgage approval by signing alongside you. They don’t own the property, but their credit and finances help secure lower interest rates

Loan-to-Value Ratio

Loan-to-value (LTV) ratio compares the loan amount to the home’s value. It helps assess the risk of granting a mortgage and influences mortgage insurance rates.

Reverse Mortgage

A reverse mortgage’s loan balance grows over time since payments start only when the borrower moves or dies. A popular choice for seniors to supplement income.

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