Non-permitted 2nd unit?

[Fernando]

Even though FHA and VA have been accounting for over 30% of the mortgage market in recent months? Good mathing...putting all that vast "experience" to work again.

Interesting. I never did a VA loan in my career here.
FHA is like 1% of all my appraisals here.
Government subsidizing other poorer parts of America.

 

[J Grant]

Interesting. I never did a VA loan in my career here.
FHA is like 1% of all my appraisals here.
Government subsidizing other poorer parts of America.

I am not on the VA panel. Approx 20-30% of my appraisals are FHA. Both FHA and VA thresholds have increased substantially and are used to finance more costly houses now; it is no longer a poor person or starter house loan.

 

[TerryRohrer]

Interesting. I never did a VA loan in my career here.
FHA is like 1% of all my appraisals here.
Government subsidizing other poorer parts of America.

Can you name one type of loan that does not benefit from Government policies? Share some of that deep understanding of our ecosystem!

 

[gregb]

Can you name one type of loan that does not benefit from Government policies?

Sure. Hard money loans.

 

[TerryRohrer]

Sure. Hard money loans.

Maybe, if the definition of "benefit" is squeezed hard enough!

State-Level Regulation
The primary oversight for hard money lenders occurs at the state level, and regulations vary significantly from one state to another. Key state-level regulations include:

• Licensing Requirements: Most states require hard money lenders to obtain specific licenses to operate legally, often through the state's Department of Banking and Finance, Financial Services, or Real Estate commission. The type of license may depend on whether the loan is for a consumer purpose (stricter oversight) or a business purpose (more flexible).
• • Usury Laws: Most states have usury laws that cap the maximum interest rate a lender can charge to prevent predatory lending. These caps often have exemptions for business-purpose loans or loans above a certain dollar amount.
  • Disclosure and Documentation: State laws typically mandate that lenders provide clear and transparent loan terms, including all fees, interest rates, and repayment schedules, to the borrower before a contract is signed.

Federal-Level Regulation
Hard money lenders must also comply with applicable federal laws, which primarily focus on consumer protection and fair lending practices:

• Truth in Lending Act (TILA): Requires lenders to disclose the true cost of a loan, including the annual percentage rate (APR) and all finance charges.
• Real Estate Settlement Procedures Act (RESPA): Mandates transparent disclosure of costs associated with real estate transactions and prohibits hidden fees or kickbacks.
• Equal Credit Opportunity Act (ECOA): Prohibits discriminatory lending practices based on characteristics such as race, religion, or gender.
• Dodd-Frank Wall Street Reform and Consumer Protection Act: This act may apply to certain residential hard money mortgages, imposing "ability-to-repay" requirements and other consumer safeguards.

In essence, while hard money lenders have more flexibility than traditional banks, they must navigate a complex web of state and federal regulations to ensure legal compliance. Borrowers should verify that a prospective lender is properly licensed with their state's financial regulatory agency.

 

[Fernando]

I am not on the VA panel. Approx 20-30% of my appraisals are FHA. Both FHA and VA thresholds have increased substantially and are used to finance more costly houses now; it is no longer a poor person or starter house loan.

FHA gives loan to borrowers who don't have enough money for down payment. Thus, they are mostly poor borrowers who would never had a chance to buy a home without government help.
They are the riskiest borrowers with little equity invested.

 

[J Grant]

FHA gives loan to borrowers who don't have enough money for down payment. Thus, they are mostly poor borrowers who would never had a chance to buy a home without government help.
They are the riskiest borrowers with little equity invested.

AI Overview


For 2025, FHA loan limits for a
single-family home generally range from a floor of $524,225 in most low-cost U.S. counties to a ceiling of $1,209,750 in high-cost areas.

Not exactly poverty level any longer - thought traditionally, FHA was used for starter or lower-cost housing. I agree FHA, or any loan with a small % down, is more risky. FHA, however, has mandatory PMI as a backstop.

 

[Fernando]

AI Overview


For 2025, FHA loan limits for a
single-family home generally range from a floor of $524,225 in most low-cost U.S. counties to a ceiling of $1,209,750 in high-cost areas.

Not exactly poverty level any longer - thought traditionally, FHA was used for starter or lower-cost housing. I agree FHA, or any loan with a small % down, is more risky. FHA, however, has mandatory PMI as a backstop.

I find Fannie's loan terms to be good. For someone to get a FHA loan and pay PMI, those borrowers really NEED help.

 

[sputnam]

I dunno. Believe what you want to. I see non GSE residential appraisals every day.