FHA 203B Loan

by Keisha
(Ellenwood, GA)

My husband and I just got pre-approved for $100,000 to get a house. When we were looking into houses, the loan officer said we couldn't get HUD, Homepath, or any of those types of homes.

We only have 90 days to choose and close or my husbands beacon score drops and there will be a chance that we won't be able to get a home for a while.

The problem is, all of the homes we've viewed and were interested in are those types of homes. It seems like we aren't going to find anything under the loan officers' rules for purchasing our 1st home.

Also, we were trying to stay in a particular price range but it seems they actually want us to go over that range for whatever reason.

My question is, what kind of loan is this? I thought FHA was a part of HUD...

=====ANSWER=====

Hello Keisha;

It really is exciting to me when first time home buyers come by my website and ask questions like this. I can tell you are well informed and are asking a very detailed and good question.

It appears to me you are looking at foreclosure homes for sale. Homepath is actually Fannie Mae's list of foreclosed homes.

HUD (Housing and Urban Development) also maintains a list of foreclosed homes for sale. Most of the time these are homes purchased under the FHA home loan program that went into default and HUD has taken them back since they guaranteed the loan to the lender.

What you need to find out from your loan officer is exactly what kind of loan are you pre-approved for. Is it a conventional loan? If so they may want a large down payment like 10%-20%.

If it's an FHA loan, they only require 3.5% down payment. Knowing this will certainly help.

If it is the FHA 203b loan, then I'm a little confused. The house has to pass an FHA appraisal/inspection. It may need paint and carpet but if it is basically in a move in condition, you should be able to buy it.

This includes a Homepath home. It all is based on the condition of the house. It has to be in fairly good shape and ready to move in.

So you may want to ask more questions. If you do not feel you are getting satisfactory answers, then you may have to shop around for a different lender.

The fact they are trying to push you into a higher loan amount, thus a bigger commission for the loan officer also makes me worry. You want somebody who cares about you as the customer and not their paycheck.

I hope you find this helpful

Best Regards,

Jeff Ragan