FHA loans
When applying for an FHA home loan, some lenders may ask for tax paperwork as part of the application process. Some borrowers may wonder if this is legal, or an acceptable practice for home loans in general.
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FHA Loan Rules on Interest Rate Lock-ins
When a borrower wants to get an FHA home loan, he or she must fill out an application and work with a lender to get loan approval. Once the loan application is processed and the loan has been approved, the process can move forward.

When the borrower and lender agree on an interest rate and commit to that rate, that agreement is known as an interest rate lock-in. Negotiating the interest rate is a standard part of doing business with an FHA mortgage.

According to FHA loan rules ,"Under all currently active FHA single family mortgage insurance programs, the borrower and the lender negotiate the interest rate and any discount points." When the borrower and lender agree on a rate and lock it in, another section of the FHA loan rulebook applies.

According to HUD 4155.1., "Lenders are permitted to charge a commitment fee to guarantee, in writing, the interest rate and any discount points for a specific period of time, or to limit the extent to which the interest rate or discount points may change."

How long does the borrower have from the time the mortgage loan interest rate lock-in takes effect? FHA.gov says, "The minimum time for lock-ins or rate locks is 15 days. The loan may close in less than 15 days at the convenience of the borrower, and the lender may still earn the lock-in fees." The rules also state that,"Lenders must honor all such commitments."

What about situations where a re-negotiation of the interest rate is needed? Is it possible for the borrower and lender come to an agreement on a different interest rate than the one agreed to at the initial interest rate lock-in?

FHA loan rules say, "The lender must provide the borrower with HUD-92900-B, HUD Interest Rate Disclosure Statement, to explain that the loan terms are negotiable. The lender must re-qualify a borrower if there is any increase in either the interest rate or discount points."

Under this rule, the borrower may be required to re-submit to a credit check, debt-to-income ratio calculation, or other pertinent re-qualification data as required by the financial institution. That provides borrower and lender with incentive to consider the original interest rate lock-in agreement carefully.

If you have questions about these procedures and requirements for interest rate lock-ins, discuss them with your loan officer or call the FHA at 1-800 CALL FHA.


FHA NEWS and RELATED ARTICLES

When applying for an FHA home loan, some lenders may ask for tax paperwork as part of the application process. Some borrowers may wonder if this is legal, or an acceptable practice for home loans in general.
There are many questions about the official FHA loan rules for occupancy for single-family home loans. According to FHA rules, a borrower must occupy the home purchased with a single-family FHA loan as a personal residence as a condition of loan approval.
After the housing market crisis of the previous decade, many mortgage borrowers found themselves having trouble making their monthly payments. In some cases, borrowers just walked away from the mortgage completely and allowed the home to be foreclosed upo
The FHA has announced it would accept electronic signatures (also known as e-signatures) on several FHA home loan documents. The new policies are found in detail described in FHA Mortgagee Letter 14-03.
Some of your FHA loan closing costs may be financed, and some may--after being negotiated between buyer and seller--be paid by the seller within the boundaries of the FHA loan programís rules. The borrower can also pay some closing costs out of pocket.

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