Articles Tagged With: FHA 203k Mortgage

August 3, 2011

FHA Section 203(k) Loan Facts

The FHA Section 203(k) loan, sometimes called a rehab loan, the Federal Housing Administration’s “primary program for the rehabilitation and repair of single family properties” according to the official site. The FHA 203(k) is sometimes used in partnership with state or local agencies, non-profits and other groups to rehab homes, but the 203(k) can also be used by individuals to purchase and repair individual properties. The 203(k) section at FHA.gov states, “When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and | more...

July 27, 2011

FHA Condo Loans: Who Approves the Condos?

By Joe Wallace

FHA loan applicants looking for a condo loan have several options open to them when it comes to finding a project that is FHA-approved. The Department of Housing and Urban Development along with the FHA maintain a list of approved condo projects eligible for FHA loans, which is searchable by city, state, and other factors. You can find that list here: https://entp.hud.gov/idapp/html/condlook.cfm But is the existing list the only resource FHA borrowers have to find a condo project? What if the buyer finds a suitable condo that is not yet FHA approved? Thanks to the Housing and Economic Recovery Act (HERA) of 2008, changes have been made to the FHA condo project approval process, effective for all case numbers issued after December 7, 2009. According to the official site, “FHA | more...

June 20, 2011

FHA Loans and Rehab Grants

By Joe Wallace

One frequently asked question about FHA loans is about FHA grants for home repair. Does the FHA provide grant money for home buyers or FHA borrowers to repair or fix up a home? The short answer is no. While you may read FHA press releases such as a recent item about the FHA awarding $27 million in “sweat equity grants”, (HUD Press Release No. 11-122), it’s important to make the distinction between a grant to

April 29, 2011

FHA Loans: How Does the Bank Approve FHA Loan Applicants?

By Joe Wallace

There are many types of FHA insured loans available for single-family residences. Borrowers can apply for a traditional home loan with a down payment, fixed interest rate and a 15 or 30-year mortgage. But there are plenty of other loans which can be applied for including; Section 203h Insured Mortgage for Disaster Victims Section 255 Home Equity Conversion Mortgage (HECM) Section 203k Rehabilitation Mortgage Energy-Efficient Mortgage Program (EEM) Adjustable rate mortgages Section 248 Indian Reservations and Other Restricted Lands Title I Home Improvements Regardless of what loan product is preferred, for new purchases and many FHA refinancing options, borrowers must fill out an application giving information that includes employment and residence history, detailed accounts of outstanding debts and monthly financial obligations and much more. The FHA requires this information in | more...

March 17, 2011

FHA 203(k) Mortgages–What’s the Advantage?

By Joe Wallace

In our last blog post we discussed the FHA 203(k) loan, which is for

March 16, 2011

FHA 203(k) Rehab Mortgages

By Joe Wallace

It’s true that those dedicated to purchasing and improving a fixer-upper home face a challenging road when it comes to getting the money to do the job properly. A loan applicant trying to get a conventional loan may face requirements that the improvements be done and paid for before the money for those repairs will be issued–not an ideal situation for those trying to balance budgets, pay the mortgage on time and improve their property. An FHA loan could be the answer. The 203(k) loan program provides qualified borrowers with an FHA insured loan to those using the property to be improved as the primary residence. (It’s not for investment properties or rental units.) As with other FHA mortgage loans, there is a 3.5% minimum down payment. But 203(k) mortgages | more...

March 15, 2011

Basic Types of FHA Home Loans

By Bruce Reichstein

If you’ve never examined your FHA home loan options before, there is a

February 10, 2011

FHA 203(k) Rehab Loan Facts

By Bruce Reichstein

The FHA offers a rehab loan known as the FHA 203(k). This program is the FHA's main loan product for rehab and repair loans for single family homes, and according to the FHA official site, "...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."

January 11, 2011

FHA Loans for Fixer-Uppers: The 203(k)

By Joe Wallace

Those shopping for a home with an FHA loan aren't always interested in buying a brand-new property. Some borrowers want to purchase fixer-upper homes at a lower price to save money and invest labor into a home to make it exactly the way they want it. The FHA 203(k) loan program offers qualified FHA borrowers a chance to borrow money to accomplish this. Qualified borrowers must meet a downpayment requirement, which is roughly 3.5% of the purchase price AND repair costs of the property.

December 29, 2010

FHA Home Loan Down Payment Rules

By Joe Wallace

Most FHA home loan programs require the borrower to make a minimum down payment of 3.5% of either the appraised value of the property or the asking price of the home, whichever is lower. The downpayment is strictly regulated. The buyer is not only required to put down his or her 3.5%, but the FHA also requires documentation on the source of the down payment money in many cases. Documentation is required when the borrower pays more than 2% of the sale price. It's also required in any situation where the lender has certain questions about the down payment. According to FHA requirements, documentation is needed when the down payment "appears excessive based upon the borrower