The Title Process for VA – FHA Loans.

FHA and VA loans are an alternative to conventional financing designed for buyers who may not meet traditional loan requirements. Government agencies back FHA and VA mortgages to mitigate lender risk.

• The Federal Housing Administration insures loans designed for borrowers with higher debt-to-income ratios or low credit scores.
• VA loans are a benefit offered to Veterans, military service members, and their spouses insured by the U.S. Department of Veterans Affairs.

Title work for FHA and VA loans needs to be high-quality and cost-effective. This federal backing is not guaranteed. The burden is on the lender to ensure the property qualifies and is free from title issues.

Title Insurance Requirements

The VA or FHA makes no requirement for borrowers to obtain title insurance. It is up to the lender to determine how to ensure that the title is free from conditions that significantly affect the property and its marketability.

FHA Loans

 The FHA will not guarantee a loan with any of the following title defects:

• Unpaid property taxes
• Unpaid Homeowners Association (HOA)/Condominium fees
• Unpaid utility bills/assessments
• Unresolved manufactured housing title issues

Also, the FHA has guidelines regarding closing costs and documentation. A title agency must be detailed and cost-effective to fall within the FHA loan requirements.

VA Loans

 Due to the number of predatory lenders and refinancing scams, there is a detailed documentation process for all VA-guaranteed home loans.

• The documentation requirements for a VA loan are strict, and approved property types are detailed at length in the Federal laws and rules governing these types of loans.
• New York has additional local requirements regarding manufactured homes and leasehold estates. The VA permits very few title exceptions.

Call Federal Standard Abstract today at 718.888.7778  to open an order. We guarantee smooth sailing and a confident closing every time.