March 27, 2012
A reader asks, “When applying for an FHA loan, do I have to get pre-qualified before i get pre-approved or could I just get pre-approved? What does your credit score have to be in order to get a FHA 203k loan? Is it hard to get approved for a FHA 203k loan?”
An FHA 203K loan is described at the FHA official site as a program “for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities. Since these are the primary goals of HUD, the Department believes that Section 203(k) is an important program and we intend to continue to strongly support the program and the lenders that participate in it.”
FHA 203K loans require the same underwriting as other loans–the borrower must meet minimum credit score requirements. Many lenders look for a credit score minimum of 620 or higher; a qualified borrower could get pre-approved for an FHA home loan but must still fill out detailed paperwork and get a credit check, employment verification and the rest of the underwriting required for any mortgage.
FHA 203K rehab loans are more complex than new purchase FHA mortgages and there are different requirements for this type of loan. For example, FHA.gov lists this rule for 203K loans; “The maximum mortgage amount
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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