You agree that you are solely responsible for your own financial decisions, and release from any liability whatsoever regarding our Service or any causes of action arising from or relating to our Service.Not the first time you refinance, but that can change if you refinance more than once. assumes no responsibility for errors or omissions in the contents on the Service. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors. We do not ask users to bypass their lender. We do not ask users to surrender or transfer title. ![]() The information should not be seen as financial advice and you should consult with a licensed mortgage professional, prior to taking any action. The posted content contained on is for general information purposes only and is accurate and true to the best of our knowledge. Neither nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short-term loan services. The opinions presented on should not be construed as representing the official opinions of any government agency. Our goal is to educate our readers as to the many ways they can achieve home ownership.į is a private company, not affiliated with any government agency, is not a lender and does not offer to make loans. We offer a full video library on the definitions of many basic mortgage terms. ![]() Site Map | Terms of Service | Privacy Policy | About Us | SecureRights Advertiser Contact Informationį is a digital resource that publishes timely news, information and advice concentrating on FHA, VA and USDA residential mortgage lending. If you are not sure how this might affect your home loan, or whether you are required to make a higher down payment, ask a participating lender to clarify what is expected with these kinds of transactions. Lender standards, state law, and additional requirements may also apply above and beyond the FHA loan rules we have covered here. ![]() In these cases, the borrower must live in the property for at least six months before the sales contract agreement. A lease or other written evidence to verify occupancy is required.” “The 85 percent LTV restriction may be exceeded if the current tenant purchases the Property where the tenant has rented the Property for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.”īut what about situations where the seller is not a family member? Are there exceptions for the identity of interest rules in such cases? Yes, under limited circumstances: There are exceptions, and you should definitely know what these exceptions are going into your home loan application.įor example, the 85% LTV is waived for transactions where the borrower is purchasing “the Principal Residence of another Family Member…or a Property owned by another Family Member in which the Borrower has been a tenant for at least six months immediately predating the sales contract. The maximum LTV percentage for a transaction where a tenant-landlord relationship exists at the time of contract execution is restricted to 85 percent.” “The maximum LTV percentage for Identity-of-Interest transactions on Principal Residences is restricted to 85 percent. Such transactions are not forbidden by FHA loan rules, but do require a higher down payment under the right circumstances. The word “interest” in this case refers to the interest the seller has in selling the home to the buyer based on a tenant/landlord relationship, business relationship, or similar associations. The FHA loan handbook, HUD 4000.1, describes identity of interest transactions as a real estate sale between two parties “with an existing Business Relationship” or between family members. What is the meaning of “identity of interest?” ![]() That is not the only issue addressed under the rules for identity of interest–those with family ties buying or selling to one another may also need to have an understanding of the rules in this area. What does it mean to have an “identity of interest” when applying for an FHA home loan? This can be an issue if the borrower has been renting the property to be purchased with an FHA mortgage from the seller prior to the home loan application. FHA Mortgage Loan Issues: “Identity Of Interest”
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