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Legislation targeting LGBTQ+ communities is intensifying across U.S. states. Since 2022, the number of states banning gender-affirming care has risen from four to 23, and 21 states banned or restricted abortion. Two-thirds of states also currently have laws on the books that criminally penalize certain activities based on a person’s HIV-positive status.

Recent Washington Post analysis of FBI crime data reveals that hate crimes in K-12 schools have more than quadrupled in response to restrictive laws.

In 2017, long before the most recent legislation, a survey by National Public Radio, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found more than half of the LGBTQ+ community regularly reported experiencing threats, harassment or violence due to their sexuality or gender identity.

It stands to reason that community members may wonder how to plan for their safety and well-being. If you need to move due to safety concerns — and have some time to prepare for the move — any financial planning you can do beforehand will go a long way. Consider the following six tips from financial and LGBTQ+ experts around the country.

How to financially prepare for a move (if you can)

1. Evaluate your assets and expenses

Taking stock of your income, expenses and assets can help you figure out what it will take to make your move a reality. Lindsey Young, a certified financial planner in Baltimore, says reviewing regular expenses, moving expenses and any costs you may face from temporary unemployment can help you understand where your money is going and plan where you want it to go.

Moving is expensive, and the LGBTQ+ community already tends to earn less than straight and cisgender workers on average, according to a Human Rights Campaign analysis of full-time LGBTQ+ workers and Bureau of Labor Statistics data. Transgender men and women, LGBTQ+ people of color and LGBTQ+ women face even more pronounced pay gaps and discrimination.

However, the LGBTQ+ community also has a rich history of supporting one another through mutual aid. So, check with your support network to see what’s available. Be aware that seeking help and support is normal, especially during challenging political moments.

2. Acquire cash on hand

Once you know how much money you need, consider how you might get it and create cash flow, says Young. For example, can you take on extra shifts at work? A second job? Can your chosen family or a GoFundMe make up the difference?

If you need to move but don’t have cash, says Young, consider what existing lines of credit you can access, such as a home equity line of credit, or HELOC, or credit card.

Also, consider whether you would want — or be able — to take on repaying new debt over the next several months or years. Are you more comfortable taking on debt to make a move happen, or would you prefer to tough it out where you are? Young says there is no correct answer, and it’s a matter of “understanding what their priorities are to really figure out what the right path forward is.”

3. Assemble your documents and back them up 

Wherever you are, it’s always helpful to get your important documents together in one place. Make photocopies of anything important, such as medical records and personal IDs, and upload them to a safe cloud location so you can access them anywhere.

4. Specify your power of attorney 

Officially designating who will make medical and financial decisions on your behalf is essential to putting someone you trust in charge if something happens to you. Make your will and choose your power of attorney so one isn’t chosen for you.

This step is crucial for anyone concerned that their biological family members (or the state) might try to challenge their wishes, even if they’re married. If your situation is complicated, finding an attorney who specializes in LGBTQ+ clients can help ensure that your wishes are followed despite any contentious family relationships you may have.

The risk of not planning can include that your wishes and loved ones aren’t honored, says Frank Summers, a certified financial planner in Charlotte, North Carolina. “I know of situations in which the estate of somebody who passed away went to a family member who did not approve of their relationship, who didn’t like gay people and proceeded to make the life of the surviving partner extraordinarily difficult when that person is dealing with a tremendous and profound grief,” says Summers.

5. Connect to members of your community, old and new

Connecting to an LGBTQ+ organization or group in a new city might make you feel safer, as well as possibly open up connections to new jobs, health care providers and relationships.

As director of transgender services at The Center on Colfax in Denver, Sable Schultz has seen a significant uptick in people connecting to peer support group services in person and online as they prepare to move to Colorado. Considered a “refugee” state, Colorado has sheltered thousands of newcomers in 2024, and its Medicaid coverage includes gender-affirming services.

Summers sees particular groups of people impacted by legislation — trans and nonbinary people, people wanting to start families, people with children and people who require ongoing care. Needing to access care and not knowing if you’ll be able to get it (or, if you can get access, not knowing if you’ll receive care with respect) can be overwhelming and scary, especially in a state like North Carolina that recently banned gender-affirming care and severely restricted abortion.

So wherever you’re headed, identify a support group, Queer Exchange, Facebook affinity group, or a social service provider that can connect you with housing, medical care, community or other support nearby.

6. Plan a safe travel route

If you’re getting on the road, consider how you can safely get from one place to another, including where you can use the restroom. Be sure to check in with local queer groups to identify where travelers have successfully stopped and stayed in the past.

If moving or traveling requires you to go through states targeting the LGBTQ+ community, particularly trans and nonbinary people, make a plan for how you can drive along large interstates and stop in larger towns and cities, or at least places that identify themselves as allies to the community.

What to do if you have to move and can’t prepare

Conversations about money aren’t usually related to an immediate life or death scenario, but for too many members of the LGBTQ+ community, that is the current reality. Safety is top of mind, especially given the ongoing rise in hate crimes.

Schultz describes Colorado as a refugee state because it mandates health care protections — including requiring gender-affirming care of Medicaid services — as well as general protections around gender identity and gender expression.

Other states where gender-affirming care is practiced include Alaska, California, Connecticut, Delaware, Hawaii, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington, Wisconsin, and Wyoming; and Washington, D.C.

If you’d feel safer in any of these states, it’s possible even a lack of financial planning shouldn’t keep you from making the move. For those who are currently unhoused or living out of their car, says Schultz, sometimes “it’s at least safer to be unhoused here [in Colorado] than it would be to be wherever they were. And they can at least get the health care that they need.”

There’s no shame in doing what you must to get to a safer place where you are valued and wanted. And if you’re an ally to the LGBTQ+ community, check in on your loved one. Consider what emotional, financial or other support you can offer them during this challenging time.

Source: nerdwallet.com

Apache is functioning normally

The Citizenry’s flagship store in New York City. [Photo: The Citizenry]

The Citizenry, a Dallas-based direct-to-consumer home decor brand that partners with artisans around the world, has been acquired by Havenly, a Denver-based interior design service and home furnishings company.

The acquisition will allow the socially motivated home decor company to continue to scale the availability of its sustainable artisanal furniture and goods, further multiplying its impact, Citizenry said. Terms of the deal were not disclosed.

“We set out to prove retail can be a force for good. Not only does the Havenly team appreciate our values, they have fallen in love with our unique design aesthetic, product line, and most importantly, our commitment to fair trade,” Rachel Bentley, co-founder of The Citizenry, said in a statement. “They’re the right partner to lead our next chapter of growth. We worked with almost 3,000 artisans last year, and with this step—that just feels like the beginning.”

Havenly said it anticipates retaining much of The Citizenry team, including Bentley, who will serve as president of The Citizenry, and Co-Founder Carly Nance, who will transition to serve as an executive brand advisor.

The Citizenry co-founders Rachel Bentley (left) and Carly Nance [Photo: The Citizenry]

Focused on fair trade—and poised for growth

The Citizenry joins Havenly as part of its ongoing efforts to build a collection of home brands and technologies that appeal to the next generation of shoppers, the companies said.

The deal will allow Havenly to expand its fair-trade initiations with The Citizenry and across other areas of the business.

The Citizenry co-founder Rachel Bentley visits with an artisan in Morocco, from our 2016 profile of the company. [Photo: The Citizenry]

Since its founding in 2014, The Citizenry has expanded its offerings to cover the whole home, while supporting the work of thousands of artisans around the globe at pay rates that average twice the fair trade requirement.

From its beginnings, The Citizenry said it set out to build a design-forward company that celebrates the people behind its products and sets new standards in social responsibility for the industry. The Citizenry adopts a fair trade business model, and its following has grown the company into the largest U.S. home decor company to have 100% of its products sourced according to the rigorous standards set by the World Fair Trade Organization.

In 2021, The Citizen raised $20 million in Series B Funding from San Francisco-based NextWorld Evergreen, a growth equity firm with a focus on conscious consumer brands. And just last September, The Citizenry launched a new brand campaign, “Uncontained,” to highlight a deep lineup of new brands hitting shelves at nearly 100 Container Store locations nationwide.   

Rolling out its collections across Havenly’s platforms

The Citizenry said that with the acquisition, it will roll out its iconic collections to audiences across the Havenly platforms, expand its retail footprint, and scale its global network of artisans and heritage manufacturers to new levels.

“We’ve always said that our business marries old-world values with new-world market strategies,” Carly Nance, co-founder of The Citizenry, said in a statement. “We’ve grown to where we are today by being customer-centric and digitally-driven. This partnership provides even more strategic firepower in those arenas. The Havenly team is passionate about the same things we are—building potent, meaningful brands designed to stand the test of time.”

Mercado storage baskets from The Citizenry. [Photo: The Citizenry]

Havenly’s third acquisition in 36 months

This is Havenly’s third acquisition in 36 months, with past acquisitions including Interior Define and The Inside. Havenly said the deal cements it as the largest digital-first, DTC platform in the home decor market with a strong strategy for sustainable growth.

“As a personal customer of The Citizenry, I’m thrilled to bring the brand into the Havenly family,” Lee Mayer, co-founder and CEO of Havenly, said in a statement. “Rachel and Carly’s unrivaled commitment to sustainability, social impact, and support of artisans combined with premium quality and exquisite design is truly something revolutionary in the space, and a big reason why The Citizenry has long been a favorite among our customers. We’re excited to build on the work they’ve done to promote more sustainable values and help usher in the next era of great home brands for the modern consumers.”

Organic Turkish cotton duvet from The Citizenry. [Photo: The Citizenry]

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If you caused a major car accident and the other driver sued you to cover their medical costs, would you have enough liability insurance to pay the damages? In a financially disastrous situation like this one, an umbrella insurance policy could help.

Umbrella insurance offers extra liability coverage beyond what’s on the policies you already have, such as auto or homeowners insurance. But there can be big differences from one umbrella policy to the next, including coverage details and maximum limits. Here’s how to find the best umbrella insurance for you.

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How to find the best umbrella insurance

When comparing umbrella insurance options, consider the following questions.

What’s covered?

A standard umbrella insurance policy will cover injuries or property damage you cause to others, as well as your legal defense for such claims. But the nitty-gritty details may vary between policies.

For example, if your idea of a fun vacation is renting a Jet Ski and hitting the water, know that some umbrella insurers won’t cover these kinds of personal watercraft. The best umbrella insurance coverage for you will include your hobbies and other activities.

Many umbrella policies offer coverage anywhere in the world, which could be useful if you often travel overseas. But some policies may pay only for lawsuits brought in the U.S. or Canada.

You might also see some insurers offering excess liability policies, which tend to be similar but not identical to umbrella policies. Excess liability policies essentially boost the limits on the coverage you already have, while umbrella policies may also offer extra types of coverage that aren’t available on your existing policies.

An independent insurance agent can help talk you through exactly what’s covered and what isn’t by each policy you’re considering.

How much underlying coverage is required?

Insurers often require a minimum amount of liability insurance on your underlying policies before you can buy umbrella insurance.

For instance, to add umbrella coverage to your car insurance, your policy may need to have $250,000 of bodily injury liability coverage and $100,000 of property damage liability coverage. To add umbrella coverage to a homeowners policy, you often need $300,000 of liability insurance.

If your existing policies fall short of these limits, increasing your coverage amounts will likely raise your premiums.

Can you buy your policies from different companies?

Before they sell you an umbrella policy, many insurers require that you carry your auto, homeowners, condo or renters insurance with them, too. RLI and Auto-Owners Insurance are two companies that offer stand-alone umbrella insurance policies, meaning you could carry your auto or homeowners coverage with someone else.

How much coverage should you buy?

Another factor to look at when shopping is the maximum limit a company offers. Most umbrella policies stop at $5 million, but some go higher. Farmers, for instance, offers umbrella insurance up to $10 million in most states, while Chubb‘s umbrella limits go up to $100 million.

When choosing your coverage limit, add up the value of your assets, such as savings, investments and real estate. These are things you could lose if someone files a lawsuit against you. Consider choosing an umbrella liability limit at least high enough to cover all your assets.

Where to buy umbrella insurance

Many major carriers offer umbrella insurance. A good first step is to call your current auto and home insurer and request an umbrella insurance quote. Remember that you may have to increase the coverage limits on your underlying policies, which could raise your total cost.

If you have coverage with multiple companies, ask how much it would cost to move all your policies to that company, including the new umbrella. See if a bundling discount could reduce the total cost of your premiums.

🤓Nerdy Tip

Take this opportunity to shop around. Since you’re adding a new type of insurance and potentially raising the coverage limits on your existing policies, you may find that your current insurer no longer offers the best value.

We recommend getting quotes from at least three companies before making a decision. An independent agent or broker can shop around on your behalf and explain the coverage differences between policies.

Umbrella insurance companies to consider

Below are some of the major umbrella insurance companies in the U.S., along with details about their coverage limits and eligibility requirements. Keep in mind that smaller regional insurers may also offer solid coverage at an affordable price. A local insurance agent can help you find them.

Allstate

Coverage limits: $1 million to $5 million.

States available: Washington, D.C., and all states except Alaska, Massachusetts, Nevada and New York.

Eligibility requirements: You must have underlying policies with at least the following limits:

  • $300,000 of liability coverage.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

  • $500,000 combined single limit.

Amica

Coverage limits: $1 million to $5 million.

States available: Washington, D.C., and all states except Hawaii.

Eligibility requirements: Requirements vary by state. Generally, your underlying policies must meet the following minimums:

  • $300,000 of liability coverage.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $50,000 property damage liability.

  • $500,000 combined single limit.

Auto-Owners

Coverage limits: $1 million to $5 million, with additional limits potentially available.

States available: Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia and Wisconsin.

Eligibility requirements: Eligibility requirements differ depending on underlying policy, underlying carrier and where you live.

Chubb

Coverage limits: $1 million to $100 million.

States available: All 50 states and Washington, D.C.

Eligibility requirements: Minimum limits for underlying policies vary by state.

Note: Chubb’s policy is technically an excess liability policy, not an umbrella policy.

Farmers

Coverage limits: $1 million to $10 million, except in Florida and California, where the maximum limit is $5 million.

States available: All states except Alaska, Delaware, Hawaii, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, North Carolina, Rhode Island, Vermont, Washington, D.C., and West Virginia.

Eligibility requirements: Farmers must insure at least one car with bodily injury liability limits of at least $250,000 per person and $500,000 per accident. You can insure your home with any company as long as it has at least $300,000 of liability coverage.

Geico

Insurance type

NerdWallet star rating

Auto insurance

Homeowners insurance

Coverage limits: $500,000 to $10 million. (Limits above $2 million require additional eligibility requirements.)

States available: Washington, D.C., and all states except Alabama, California, Georgia, Montana, Nevada, New York, Texas and Washington. In the states where Geico doesn’t currently sell umbrella insurance, it can offer a policy through a partner carrier.

Eligibility requirements: You generally must have all vehicles insured with Geico and have the following minimum coverage limits on any relevant underlying policies:

Auto, RV, motorcycle or golf cart

  • $300,000 bodily injury liability per person.

  • $300,000 bodily injury liability per accident.

  • $100,000 property damage liability.

Property (homeowners, renters, etc.)

$300,000 of liability coverage.

Boat (26 feet or longer, or over 50 horsepower)

$300,000 of liability coverage.

Boat (under 26 feet with motor of 50 horsepower or less)

$100,000 of liability coverage.

Liberty Mutual

Coverage limits: $1 million to $5 million.

States available: All states except California, Georgia, Louisiana and New Jersey. Coverage limits and requirements vary by state.

Eligibility requirements: You generally must have a Liberty Mutual auto policy with at least the limits below, but requirements may vary by state. The other policy types are optional, but if you have any of them, the liability limit must be at least $100,000.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $50,000 property damage liability.

  • $500,000 combined single limit.

Homeowners, dwelling, watercraft, farmer’s personal liability or general personal liability

  • $100,000 of liability coverage.

Nationwide

Coverage limits: $1 million to $5 million.

States available: Washington, D.C., and all states except Alaska, Hawaii, Louisiana and Oklahoma.

Eligibility requirements: It depends on where you live. In most cases, all vehicles and your primary home must have Nationwide policies with at least the following limits:

  • $300,000 of liability coverage.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

  • $300,000 bodily injury liability per person.

  • $300,000 bodily injury liability per accident.

  • $100,000 property damage liability.

USAA

Coverage limits: $1 million to $5 million, with higher limits available through the USAA Insurance Agency.

States available: All 50 states and Washington, D.C.

Eligibility requirements: USAA policies are available only to veterans, active military and their families. The following limits apply to underlying policies:

Homeowners, renters or rental property

  • $300,000 of liability coverage.

  • $300,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

Watercraft (if applicable)

  • $300,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

Source: nerdwallet.com

Mortgage interest rates on the 15-year and 30-year mortgages are down from last week, Freddie Mac reported.

“The 30-year fixed-rate mortgage decreased again this week, with declines totaling almost a quarter of a percent in two weeks’ time,” Freddie Mac Chief Economist Sam Khater said.

For 30-year, fixed-rate mortgages, the average interest rate was 6.74% this week, a decent drop from last week when rates averaged 6.88%. Rates aren’t down quite as much as last year when they were 6.6%, on average.

Additionally, 15-year mortgages averaged 6.16%, down slightly from last week when they averaged 6.22%. These mortgages also aren’t as low as last year when they averaged 5.9%.

“Despite the recent dip, mortgage rates remain high as the market contends with the pressure of sticky inflation,” Khater said. “In this environment, there is a good possibility that rates will stay higher for a longer period of time.”

If you want to take advantage of lowering interest rates, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.

HOMEBUYERS FEEL GOOD ABOUT WHERE MORTGAGE RATES ARE HEADED: FANNIE MAE

Spring likely to bring higher home prices

Warmer weather tends to bring a booming housing market as more homebuyers start looking for homes and inventory grows.

Sellers who list their homes in the spring and summer months often make more money when their home sells because the market is more competitive. A Zillow study found that June was the most profitable month for sellers. Homes listed in the first half of June sold for 2.3% more, on average, putting about $7,700 more in the pocket of sellers.

Location matters when it comes to selling power. In San Francisco, the best time to list is the second half of February, but the first half of July is the best time to sell in New York and Philadelphia.

Certain locations also boast even higher profits during warmer months. During the hottest time of the year, homes in San Jose sold for 5.5% more, boosting profits by $88,000 on an average home, according to Zillow. However, homes in San Antonio sold for just 1.9% more during the same time frame.

“Most sellers don’t have the luxury of timing the market,” Zillow Chief Economist Skylar Olsen said. “The best time to list is when it makes the most sense for their lives.” 

“Regardless of the month, sellers who list their home for sale this spring can expect plenty of interest if their home is marketed and priced right.,” she contined. “That’s why it’s more important than ever to hire a real estate agent with the experience to localize your strategy when comparable sales might be further afield.”

If you’re looking to compete with other buyers this spring, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes.

HOMEBUYERS GAINED THOUSANDS OF DOLLARS AS MORTGAGE INTEREST RATES FALL: REDFIN

To afford homes, buyers need higher incomes than they did a few years ago

Buyers are facing a tougher market than they did a few years ago. To comfortably afford a home, buyers need to make more than $106,000 annually, another Zillow study showed. This income requirement is 80% higher than in 2020.

Monthly mortgage payments are higher than ever and have doubled since 2020. Payments average $2,188, assuming the buyer puts 10% down. With such high prices, affordability has become a major issue. In 2020, households earning $59,000 annually could afford the median-priced home without spending more than 30% of their income.

The $106,000 income needed today is well above the average household income in the U.S. The average household earns about $81,000.

Some areas are more affordable than others and require a much lower income to afford the average-priced home. Pittsburgh buyers need to earn just $58,232 to afford the average home. Memphis residents need $69,976 and Cleveland residents need $70,810.

Costlier cities like San Jose and San Francisco require much more in annual income to afford a home. San Jose requires an average annual income of $454,296 while San Francisco requires $339,864, according to Zillow.

To see if you qualify for a mortgage based on your current credit score and salary, consider using Credible, where you can compare multiple mortgage lenders at once.

15% OF AMERICANS HAVE CO-PURCHASED A HOME WITH A NON-ROMANTIC PARTNER, EVEN MORE WOULD CONSIDER IT

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Source: foxbusiness.com

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Artit_Wongpradu/Getty Images; Illustration by Issiah Davis/Bankrate

Key takeaways

  • An FHA construction loan is a type of FHA loan that covers the cost of building a home, including the land or lot purchase, building materials and labor.
  • There are two types of FHA construction loans: an FHA construction-to-permanent loan and a FHA 203(k) loan.
  • FHA construction loans can be rolled into an FHA permanent mortgage.

If you’d rather build a home than buy one, an FHA construction loan could help pay for the project. Like a regular FHA loan, this type of financing is insured by the Federal Housing Administration (FHA) and offered by FHA-approved mortgage lenders. Here’s how to get one.

What is an FHA construction loan?

An FHA construction loan is a type of FHA loan used to build a home. It works like a conventional construction loan by providing short-term financing for a range of construction costs, from the architect’s fee to the certificate of occupancy. Often, borrowers convert these loans to long-term mortgages once the house is built.

Unlike conventional construction loans, however, FHA construction loans are insured by the FHA. That means if you have a down payment of at least 3.5 percent, you could qualify for the loan with a credit score as low as 580.

How does a construction loan work?

Construction loans aren’t like regular mortgages. They typically last for one year, during which time the lender releases payments, usually directly to your contractor. The lender enlists an inspector to evaluate the project at various stages, and releases more funds once everything checks out. Once construction is finished, the loan either converts to a traditional mortgage or the borrower obtains a mortgage to pay it off.

Types of FHA construction loans

  1. FHA construction-to-permanent loan: An FHA construction-to-permanent loan finances the ground-up construction of a home — including the purchase of the land or lot — then converts to a regular FHA mortgage. This is also known as a one-time or single-close loan; you won’t have to pay closing costs for two separate loans.
  2. FHA 203(k) rehab loan: An FHA 203(k) loan finances the cost of buying an existing home plus renovations and repairs. There are two types of 203(k) loans: a standard 203(k) for renovations costing $35,000 or more; and a limited 203(k) for smaller-scale, less expensive projects. Either option allows you to obtain one loan to buy and fix up a home, instead of two loans.

FHA construction loan requirements

The qualifying requirements for an FHA construction loan are similar to those for standard FHA loans, but with a few additions.

To qualify for any FHA loan, you’ll need to meet the following criteria, at minimum:

  • Credit score: At least 580, or as low as 500 if putting down at least 10 percent
  • Debt-to-income (DTI) ratio: No more than 43 percent (with some exceptions)
  • Down payment: 3.5 percent with a credit score of at least 580, or at least 10 percent with a credit score between 500 and 579
  • Loan limits: No more than the FHA loan limits for the year; for 203(k) loans, no more than the FHA loan limits, the home’s after-renovation value plus improvement costs or the home’s after-renovation value, whichever is less
  • Mortgage insurance: Upfront and annual FHA mortgage insurance premiums, paid for the life of the loan in most cases
  • Occupancy: Primary residences only

On top of these requirements, FHA construction loans require satisfactory documentation detailing the construction or renovation project, including information about the contractor you plan to work with. For a standard 203(k) loan, you’ll be assigned a 203(k) consultant to estimate the remodeling or repair costs.

Whether you get a construction-to-permanent or rehab loan, the work will also be subject to inspection as the project progresses.

How to get an FHA construction loan

You can get an FHA construction loan from an FHA-approved lender, though not every FHA lender offers this type of financing. If you’re not sure where to start, search the U.S. Department of Housing and Urban Development’s list of lenders by state or county. You can filter for 203(k) lenders, too, if that’s the type of loan you’re after.

From there, the process involves connecting with a contractor and getting preapproved for financing. Here’s an overview:

  1. Prepare your credit and finances. Construction loan interest rates are often higher than the rates for a regular mortgage. While you can get an FHA loan with a relatively low credit score and down payment, a better score and a higher down payment could help you get a lower rate and pay less in mortgage insurance. If you plan to build a brand-new home, you’ll also want extra stashed away for the inevitable budget snags that come up in construction. Here’s more on the cost of building a home.
  2. Partner with a contractor and real estate agent. Whether you plan to build a home or renovate an existing property, you’ll need to work with a contractor to learn your costs and draw up plans, then provide these details to your lender for approval. If you’re getting a standard 203(k) loan, you’ll also work with a 203(k) consultant to estimate costs. From there, a real estate agent can help you find the right parcel of land, lot or fixer-upper.
  3. Get preapproved for a construction or rehab loan. You’ll need to meet all of the FHA loan requirements and any other criteria your lender stipulates. If you qualify, your lender will base the loan amount on the appraised after-construction or after-renovation value of the home.

Alternatives to an FHA construction loan

An FHA construction loan is just one type of construction financing. While it can help you build or renovate a home, you can’t use it for an investment property or vacation home, and you’ll have to pay mortgage insurance premiums, which add to your costs. Here are alternatives to consider:

  • Conventional construction loans: More widely available than FHA construction loans, conventional construction loans include construction-to-permanent and construction-only options. The downsides: You’ll need to come up with a higher down payment than the FHA version, as well as have a higher credit score. You won’t have to pay mortgage insurance for the entire loan term, however, unlike most borrowers with an FHA loan.
  • Renovation loan: Instead of a 203(k) loan, you might look into a conventional HomeStyle renovation loan, which provides financing up to 75 percent of the home’s after-renovation value.
  • VA or USDA construction loans: If you’re a service member or veteran or have a lower income and want to build a home in a qualifying rural area, consider a VA or USDA loan, respectively. These don’t require a down payment or mortgage insurance and can have flexible credit standards. You’ll need to pay a one-time funding fee for the VA loan and guarantee fees for a USDA loan, however.
  • Home equity options: If you want to make improvements to your home or another property you own, you might have enough equity in your current home to make that happen. Depending on your needs and goals, the options include a home equity loan (a second mortgage) or a line of credit, known as a HELOC.
  • Refinance and take cash out: If interest rates have gone down since you got your mortgage, you might be able to refinance to a new, bigger loan with a lower rate and cash out some of your equity to pay for renovations. Generally, this option works best for homeowners who can get a lower rate, have equity to spare and plan to do extensive remodeling.

FAQ

  • Many types of mortgage lenders offer FHA loans, but not all offer FHA construction loans. You can search FHA-approved lenders in your area on the U.S. Department of Housing and Urban Development’s website, or start with our guides to the best FHA mortgage lenders and best FHA 203(k) rehab mortgage lenders.

  • If you’re making a down payment of 3.5 percent, the minimum credit score for an FHA construction loan is 580. If you have at least 10 percent to put down, you could qualify with a score as low as 500.

Source: bankrate.com

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Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.

Tim Maxwell

Mortgage Expert

Tim Maxwell is a freelance personal finance writer with over two decades of media experience. His work has been published in Bankrate, CBS News, Experian and other outlets. Tim is passionate about financial literacy and empowering people to take control of their finances. When he’s not writing or geeking out over his budget, he enjoys creating memories with his family in the Sierra Nevada mountains.

Read more articles by Tim Maxwell

Source: newsweek.com

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Servicing, Non-QM DSCR, RON Products; Freddie and Fannie News; Rate Cut Outlook

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Servicing, Non-QM DSCR, RON Products; Freddie and Fannie News; Rate Cut Outlook

By:
Rob Chrisman

Tue, Apr 9 2024, 11:37 AM

Here in the Hill Country near Austin, Texas, there’s an active market of sellers and buyers of real estate. It is a safe bet that most use agents; around 90 percent of buyers use them, and Clever released data on average real estate commission rates in the U.S. as they stand now. Clever found that on the median-priced home of $431,000, the average U.S. home seller pays real estate commission fees of about $23,662. In a survey of 630 partner agents, the average real estate commission rate in the U.S. is 5.49 percent, divided between the listing agent (2.83 percent) and the buyer’s agent (2.66 percent). The average commission rate rose from 5.37 percent in 2023. Most real estate agents typically work within a range of 2.5 percent to 3 percent. Several key factors influence this, such as property value, client relationship & circumstances, sale complexity, services provided, and market conditions. Hawaii is home to the lowest average real estate commission rate (4.78 percent), while West Virginia has the highest (6.67 percent). (Found here after 8:30AM ET, this week’s podcasts are sponsored by PHH Mortgage. From subservicing to correspondent lending, MSR/co-issue transactions, portfolio retention, reverse mortgages, and commercial servicing, PHH has solutions for the entire mortgage lifecycle. Hear an interview with Cross Country Mortgage’s Nicole Perrone on ways lenders are expanding production and capturing market share.)

Lender and Broker Products, Software, and Services

ICE Mortgage Technology® customers are experiencing exciting benefits from the integration between Simplifile® and The Closing Exchange, a leading provider of notary services and order management technology. This integration supports settlement agents and lenders who wish to conduct remote online notary (RON) transactions but may not have the necessary staff or infrastructure in place to facilitate such closings. By leveraging The Closing Exchange’s extensive network of notaries, and their expertise in performing signings, customers can now drive a better borrower closing experience by seamlessly leveraging a RON notary who is already set up in Simplifile® eSign Events™. Click here to learn more.

Long-term Rental or Vacation Rental? Visio Lending is the nation’s leader in Non-QM Investor DSCR loans for buy and hold SFR rentals with nearly a decade of experience and over $2.7 billion in originations. No-DTI, 30-year terms, rate buy downs, free 45-day rate locks; I/O and Sub-1 DSCR options available. Now choose your own title company (including on refinances). Through our top-notch Broker Program, brokers are able to earn up to 2 points YSP, and 5 points total. Visio Brokers can count on a designated Account Executive and in-house processing.

Understanding what you’re up against in this economy is paramount for every originator. You need to find opportunity, and we want to help you do just that. Join us Thursday, April 25 at 2 p.m. Eastern for a roundtable discussion featuring MAXEX President, COO and Co-founder Bill Decker, South Street Securities Managing Director Buck Thompson and AmeriVet Securities Head of U.S. Rates Greg Faranello. We’ll dive into the current headwinds, where customers are finding success and how you can break away from the traditional business as usual to build a more resilient foundation for the future. Register today to join the discussion.

Servicing Products

How does Servbank maintain such low delinquency rates? Because Servbank identifies and addresses delinquency risk before it has a chance to grow. They utilize their leading-edge technology to drive precise customer outreach and combine it with caring specialists, who work in partnership with customers to achieve positive resolutions. Together, this combination of people and tech, allows Servbank to stay ahead of the DQ curve, not to mention the rest of the market. And when delinquencies are kept low, everybody wins: It’s good for homeowners, the communities they live in, and you, the lender, by reducing your servicing advances, resulting in more monthly cash flow for you. Servbank blends the best of human – and tech-powered service to create excellence with superior performance. Learn more here.

DOWN TO THE ROOTS OF DARA CLAIMS. Dara by Sagent is a unified platform that includes a complete suite of tools for default servicing, and this is where Dara Claims makes a positive impact. It’s the first-of-its-kind tool designed to improve recoverability while reducing risk and cost. Integrating automation and real-time data to simplify the claims process helps reduce manual data entry for servicers, opening up the opportunity to focus on nurturing stronger relationships with homeowners. For a deep dive into all things Dara Claims, read our blog here.

Fannie and Freddie Updates

Given that the lion’s share of mortgages is underwritten to Freddie & Fannie’s guidelines, or are processed to their guidelines, or are sold to them either directly or via a correspondent investor, the changes they make are closely followed.

Fannie Mae posted the March Appraiser Quality Monitoring (AQM) list.

Fannie Mae is taking a phased approach to Uniform Loan Delivery Dataset (ULDD) Phase 5 implementation to allow lenders time to begin providing new and updated values prior to the July 28, 2025, mandate. Refer to its new implementation guide for important transition information.

Freddie Mac Single-Family Seller/Servicer Guide Bulletin 2024-4 announced updates pertaining to Manufactured Home certification requirements as well as other updates that can impact your business and our borrowers.

On April 5, Fannie Mae updated its Selling & Servicing Guide pages to improve the user experience, with enhancements to content navigation and search functionality. These enhancements do not impact the Selling & Servicing Guide content or layout. While the Guide URLs and redirects will remain active until January 2025, bookmarks should be updated as soon as possible after April 5. View Fannie Mae’s Enhancements to Your Selling & Servicing Guide Experience.

Fannie Mae and Freddie Mac (the GSEs) announced the timeline and scope for the Uniform Closing Dataset (UCD) v2.0 Specification updates, and postponed UCD critical edits Phase 4 and 3B requirements.

Capital Markets

Bond yields hit 2024 highs to open the week with inflation in focus as investors continue to walk back interest rate cut expectations in the wake of Friday’s robust March NFP data. As a reminder, March’s jobs report was yet another this year that exceeded economists’ expectations and saw the prior two months of data revised upward. Monthly job gains in the first quarter of 2024 averaged 276,333 compared to last year’s 251,083 monthly average. The continued strength in the labor markets means policy makers at the Federal Reserve have little incentive to lower the target for the fed funds rate.

The robust March payrolls report continues to weigh on bond markets as it means that any change to Fed policy will be likely pushed back to later in the year. The front-end of the yield curve was more reactive to changing rate cut expectations yesterday than the long-end, though rate cut expectations will be a moving target the next couple of days with the release of the March Consumer Price Index on Wednesday and March Producer Price Index on Thursday. CPI will be the most closely watched, and the headline number is expected to tick slightly higher to a 3.4 percent annualized rate compared to the previous report’s 3.2 percent. This would be the highest rate of inflation since December. The core is expected to come in at a 3.7 percent clip, down from 3.8 percent in February.

“Fed speak” lately has been hawkish, and the sentiment for rate cuts seems to be fading fast. Minneapolis Fed President Kashkari last week raised the possibility of rate hikes if inflation doesn’t continue to work its way lower, while Fed Governor Bowman declaring that progress on inflation “has stalled,” and Dallas president Logan added to the malaise when she declared it “much too soon” to think about rate cuts. Gasoline prices rose again in March as OPEC+ producers extended supply cuts, the Middle East conflict threatened to broaden, Ukraine attacked Russian refineries, and U.S. crude production leveled off near a record high. Nothing here points to a near-term rate cut, and investors have decreased their forecasts of Fed rate cuts this year to two as the most likely outcome, their most pessimistic outlook since late October. June fed funds futures now see slightly less than a 50-50 chance of a cut.

Today’s calendar began before the open with the NFIB Small Business Optimism Index for March. Later today brings Redbook same store sales for the week ending April 6, and Treasury auctions that will be headlined by $59 billion 3-year notes. We begin the day with Agency MBS prices better by about .125 and the 10-year yielding 4.39 after closing yesterday at 4.42 percent; the yield curve inversion continues with the 2-year at 4.77.

Employment

Be The Key at Movement! Movement Mortgage’s new Be the Key program empowers loan officers and realtors to serve the Black community. Collectively we are unlocking the doors to homeownership, equity, and generational wealth across the country. Be the Key is part of Movement’s over-arching Grab the Key program, which also includes Grab the Key, Jr. These programs offer consumers and young students educational classes, community events and practical mortgage resources. For more information on these programs and how Movement’s diversity lending initiatives equip loan officers in a unique way, contact Montell Watson or visit grabthekey.com. Be a part of the change. Be the key.

Banner Bank, a top performing and globally recognized financial institution, has a unique opportunity for a VP, Mortgage Servicing Director in Southeast Washington. This part of the country offers breathtaking views of the panoramic wine country, a temperate climate, and some of the best outdoor opportunities in the West. Banner is seeking a visionary expert in Mortgage Loan Servicing with superior knowledge of the technical landscape and outstanding leadership experience. The role is relocation approved. To apply visit, Banner Careers. Resumes should be submitted there, but any questions should be directed to Ken Larsen, EVP & Mortgage Banking Director.

Canopy Mortgage is making waves nationally, with a rapid influx of high-performing loan officers, averaging one every other day. What’s the draw? It’s their streamlined corporate structure, integrated proprietary technology, unique profit and loss model, and empowering ethos highlighted by Forbes. This growth is fueled by strong relationships and referrals, establishing Canopy as a leader in mortgage lending innovation. Haven’t heard of Canopy yet? Ask around or reach out to Josh Neumarker at 888-696-9076 for a Tech Demo or consultation.

NAN (Nationwide Appraisal Network) is pleased to announce the appointment of William “Bill” Waltenbaugh, SRA, AI-RRS, as its new Chief Appraiser. With a distinguished career spanning over three decades in the property valuation industry, Bill brings a wealth of expertise and leadership to his new role. Bill is eager to collaborate with the NAN team and like-minded professionals to drive innovation and elevate industry standards. His leadership will be invaluable as NAN continues to enhance their services and drive growth. Bill will leverage his extensive experience and deep industry knowledge to advance NAN’s commitment to technology, communication, and accountability. He is deeply passionate about the evolution of the valuation industry, with a keen focus on product development and modernization. His appointment as Chief Appraiser underscores NAN’s commitment to excellence and innovation in the property valuation industry. NAN looks forward to continued success and growth under his leadership.

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Source: mortgagenewsdaily.com