Colorado Springs Mortgage Blog

Big day for FHA Memos-

It was a big day for memos in general this morning but the two that will have the biggest impact on your home buying experience involve FHA/HUD loans.

The first involves a really nasty subject, Methamphetamine. If a home is found to have any history of meth, even if it has been remediated, it's pretty much a no go for FHA Financing.  Below is the internal memo issued by our corporate office this morning in its entirety.

After confirming with two separate sources at the Denver HOC office, we have learned any home including HUD Repo’s which have any evidence of the use of meth or creation of meth or even if a police report has been issued stating meth was in use in a home is ineligible for FHA insurance. Even if remediation has been done, they will not accept the property. The appraiser is to reject the property if they have knowledge of meth use or creation in the home or if they have been informed of remediation. We will be issuing a notice to all the appraisers to notify them of this issue as well. It is important to know that HUD Washington has not issued anything in writing but has left this particular issue up to the individual Homeownership Centers. The Denver HOC has decided they will NOT accept properties impacted by meth until further notice, although this is not in writing either but is an internal order. Please keep in mind the Denver HOC has authority over 17 western states and this order applies to all the states reporting to the Denver HOC. Please make sure your Real Estate agents are aware of this as well. We have not received any notification from any of our investors regarding this issue, but if the loans cannot be insured, they will not purchase.

Find out if your home (El Paso & Teller Co) was ever a Meth House http://www.springsgov.com/units/police/methLabs/alphaListing.pdf

The second memo actually comes in the form of  HUD Mortgagee Letter 11-29. Effective Oct 1st 2011 FHA will be changing it's county loan limit. In El Paso County it will be reduced from $325,000 to $271,050. In order to stay eligible for the higher amount you must have an approved loan and basically close your transaction by September 30th 2011. This won't have a huge impact on the majority of buyers out there but if you fall into this category, the clock is ticking.....

Find your county's FHA loan limit.                                    https://entp.hud.gov/idapp/html/hicostlook.cfm