Articles Tagged With: FHA 203k Mortgage

October 25, 2022

FHA Rehab Loans: The Limited 203(k) Option

FHA 203(k) rehab loans include an option for smaller, less ambitious rehab projects. Borrowers who want a home loan to do rehab or repair work but don’t want to do a large project might assume FHA loan funds are not available, but this is not true thanks to the FHA Limited 203(k) Rehab Loan option. What Is The FHA Limited 203(k) Rehab Loan? HUD 4000.1, the FHA loan handbook, describes the FHA Limited 203(k) mortgage as being good for “minor remodeling and non-structural repairs”. The rules for this loan state that the total rehabilitation cost may not exceed $35,000. The good news? There is no minimum repair cost for this type of rehab loan. Ineligible Projects For FHA Limited 203(k) Mortgages HUD 4000.1 features a list of things 203(k) funds | more...

May 13, 2022

Reasons To Refinance With An FHA Mortgage In 2022

By Bruce Reichstein

There are many reasons to consider refinancing a home loan with an FHA mortgage. Some aren’t as attractive in times when interest rates are moving higher, and others may require a refinance no matter what the rates are doing. Recovering from financial or natural disasters can bring a homeowner back to the lender to discuss options for saving a home through refinancing as one possible option. In the spring of 2022 when inflation and other issues contributed to rising interest rates, cash-out refinancing may not be on the table in the minds of those worried about a continued rise in rates. But some homeowners affected by the pandemic who are struggling to make their mortgage payments or struggling to keep up due to the long-term financial effects of COVID-19 on | more...

May 12, 2022

FHA Rehab Loans And Remodeling Projects

By Joe Wallace

If you are interested in an FHA 203(k) Rehabilitation Loan to buy and renovate a home or want to use the refinance version of the FHA 203(k) Rehab Loan, there are some things you should know before committing to a renovation project. That’s especially important for those who want to refinance their existing mortgage into an FHA 203(k) and use the loan funds to improve the home they already own. Why? Because it’s easy to get the wrong idea about how much value certain renovations might add to your property. For example, some might believe that adding a pool or hot tub will increase the value of their property. Never mind that FHA 203(k) Rehab loans don’t permit such luxury items, it’s the misconception that’s most important here. Why is | more...

February 11, 2022

Is There A Smaller FHA Rehab Loan?

By Joe Wallace

The FHA 203(k) rehab loan is an excellent choice for borrowers who need to repair, upgrade, or renovate an existing home. But some borrowers don’t have ambitious, large-scale work to be done and a “full” 203(k) rehab loan might not be appropriate for smaller-scale work. Is there an option for borrowers who need an FHA 203(k) rehab loan but don’t need a very large sum of money to do the work? The FHA Limited 203(k) Rehab Loan The limited FHA 203(k) allows borrowers to apply for rehab loan funds, but the loans in this case have a maximum total repair cost of $35,000 and no repair cost minimum. This type of rehab loan is an excellent choice for borrowers who want to work on the home but without fully refinancing | more...

February 2, 2022

HUD Announces More Funding For Areas Hit By Natural Disasters

By Bruce Reichstein

The Department of Housing and Urban Development has been very busy in 2021 and 2022 responding to natural disasters and announcing the latest federal disaster assistance in areas hardest hit by storms, fires, flooding, and more. Homeowners in federally-declared disaster areas soon learn about the FHA’s foreclosure moratoriums and options for recovering damaged or destroyed homes using FHA 203(h) and FHA 203(k) Rehabilitation Loans (amongst multiple options). Now, HUD has announced further assistance for current and future disaster areas in the form of “Allocations for Community Development Block Grant Disaster Recovery” plus the start of something called CDBG-DR Consolidated Waivers and Alternative Requirements Notice.” That notice is described by the HUD press release as being “ a critical step taken by the department to open access to more than $2 | more...

January 21, 2022

HUD Announces Disaster Relief For Alaska, Missouri, And Tennessee

By Joe Wallace

The U.S. Department of Housing and Urban Development has announced federal disaster assistance to three states affected by natural disasters in 2021 and in 2022. Certain counties in Tennessee, Alaska, and Missouri are now eligible for federal disaster relief, FHA foreclosure moratoriums, and more. Tennessee was affected by severe storms, high winds, and tornadoes from December 10 to December 11, 2021; in January of 2022 the President issued a major disaster declaration for the following Tennessee counties: Cheatham Davidson Dickson Gibson Henderson Henry Lake Obion Stewart Sumner Weakley Wilson The President also announced a major disaster declaration for portions of Alaska affected by severe storms, high winds, floods, landslides, and mudslides from October 29 to November 1, 2021. In January 2022 the President declared the Kenai Peninsula Borough a major | more...

January 11, 2022

HUD Announces Disaster Relief For Counties In Washington State

By Joe Wallace

The U.S. Department of Housing and Urban Development has announced federal disaster relief for certain counties in Washington State affected by natural disasters late in 2021. The following counties have been declared federal disaster areas: Clallam Skagit Whatcom That is in addition to federal disaster areas for the Lummi Nation, Nooksack Indian Tribe, and Quileute Tribe in Washington. The relief is intended to “supplement state, tribal, and local recovery efforts in the areas affected by flooding and mudslides” from November 13 to November 15 in 2021. If you live in any of the affected counties or tribal areas mentioned above, contact your loan officer immediately and ask your lender about the following relief and foreclosure prevention remedies for those with FHA mortgages: Immediate Foreclosure Relief In federal disaster areas, there | more...

January 5, 2022

FHA And HUD Announce Disaster Relief For Arkansas and Colorado

By Joe Wallace

The U.S. Department of Housing and Urban Development has announced federal disaster relief for portions of Arkansas and Colorado affected by natural disasters. In the case of the Arkansas declaration, the following counties are eligible for relief thanks to a Presidential major disaster area declaration: Craighead Jackson Mississippi Poinsett Woodruff These counties were hit by severe storms and tornadoes in December 2021. For the Colorado declaration, Boulder County has been declared a major disaster area due to wildfires that began in late December 2021 and into 2022. The declaration also means that FEMA funding is provided to the affected areas “on a cost-sharing basis for hazard mitigation measures”. If you live in any of the affected counties mentioned here, the following disaster relief options are available to you: Immediate Foreclosure | more...

December 3, 2021

What Are FHA Rehab Loans?

By Joe Wallace

What are FHA rehab loans? Simply put, these are home loans you can apply for to buy or refinance a fixer-upper property. FHA rehab loans come as “standard” mortgages but there is also a special FHA rehab loan program for those who have homes located in a federally-declared disaster area. The FHA 203(k) Rehab Loan HUD 4000.1, the FHA loan handbook, describes the FHA 203(k) rehab loan as follows: The Section 203(k) Rehabilitation Mortgage Insurance Program is used to: -rehabilitate an existing one- to four-unit Structure, which will be used primarily for residential purposes; -rehabilitate such a Structure and refinance outstanding indebtedness on the Structure and the Real Property on which the Structure is located; or -purchase and rehabilitate a Structure and purchase the Real Property on which the Structure | more...

October 20, 2021

Who May Contribute To My FHA Home Loan? Interested Party Contributions

By Bruce Reichstein

Who my contribute to my FHA home loan? That is a question many want to know, and the answers don’t always point to the most obvious type of contribution the borrower may seek-the FHA mortgage loan required down payment. How much and to which areas can an interested party contribute to for the borrower’s FHA mortgage? FHA loan rules governing this topic are found in HUD 4000.1, the FHA Loan Handbook for single-family mortgage loan transactions. To begin, it should be noted that down payment source funds are strictly regulated and must come from a verifiable source the lender can investigate to make sure FHA loan rules have been followed. In general, down payment contributions cannot come from interested parties to include “sellers, real estate agents, builders, developers or other | more...