With the FHA Rehab Mortgage Program you can include the costs of home improvements in your mortgage or better know as the 203k loan product below.
Are you interested in a home that needs some improvements? Would you like to incorporate the cost of those improvements into your mortgage? This is truly possible, read on to find out how.
The intent of this webpage is to help you know what some of the basic qualifications are and how to obtain a mortgage like this for yourself.
For example, if you were looking for a foreclosure home but wondered how you could afford the necessary improvements, is there an FHA program that will help with this? Yes, there is!
If you think you are ready, be sure to get a loan that works well with first time home buyers.
The whole idea for the
FHA rehab mortgage program is to help people much like yourself to buy a
home and to be able to afford to fix it up into move in condition.
This 203k program is HUD's primary tool to help get this job done.
Perhaps you've already heard about the FHA 203K loan from the Federal Housing Administration. Still, most people don't know what it really is or how it works, not to mention how to go about getting one for yourself. Use the following tips to get started with your own FHA rehab mortgage program.
The FHA 203K mortgage has specific rules in terms of the properties they can be used for, where the money can be directed, and who is eligible to receive them. Knowing all of this information is the first step of the battle.
Essentially, the FHA rehab mortgage program is meant to be an all encompassing loan. It enables a buyer to purchase a rundown property or existing home while receiving funds to not just buy the property, but also make the required improvements. It's more affordable and convenient than separate loan programs, and offers flexible financing options.
Many lenders will use this program in conjunction with state and local non-profit agencies making it even more attractive for you the first time home buyer.
Try to imagine this: You can buy the home, fix it up and get help with your down payment and closing costs. When this program is used along with grants you can get into a home with very little out of pocket money.
Now before you begin getting too excited and drooling all over yourself, let me tell you something. It takes real work to get this done. You have to be very diligent and work hard to find the help you need. Good thing for you is the fact that everything you need to know is revealed right here on this website. (Sorry and little self promotion there huh?)
Everyone isn't eligible for an FHA 203K loan. If you want to pursue this path, get to work on improving your credit immediately. Your credit score will need to be a minimum of 620. You need to have a good track record of not missing payments, having 2 years of steady employment and steady or increasing income, not to mention you have to be several years removed from any bankruptcy or foreclosure.
Remember, this is not about luxury improvements or adding sparkly new benefits to your home. This is about making something livable and up to date with the latest standards. Furthermore this is meant to make the process more affordable and accessible for low income families. It can also be used for condominiums or multi-family residences like the 1-4 unit apartments.
I helped a good friend of mine use the FHA rehab mortgage program. He was living in a trailer and wanted to buy his first residential home. Unfortunately, he could not afford the cost of the homes in the area he wanted to buy.
He found a house he really wanted but it needed a lot of improvements. The house had been sitting empty for several years. The FHA rehab mortgage program made it possible for him to buy that home and bring it up to the standards he and his wife were looking for.
They wanted to do the work themselves so there were some things they had to work around in order to make this possible. They used credit cards to buy all the building materials and then would take a draw to get reimbursed.
I do not recommend that, it best to work with a contractor. But if you have the knowledge of construction and want to work it this way, then it is possible.
It takes real work and commitment to get this done. But that should be no problem for you because you are the kind of person that is willing to work hard, do your research and go after what you are entitled to.
The sad thing is FHA does not really advertise all the various ways they have for people to become homeowners using their various loan programs. But you, my dear reader, have found the golden keys to home ownership right here at this website. Just keep digging.
Hopefully by now you've learned a little bit more about the FHA rehab mortgage program, also known officially as the FHA 203k loan. It's meant for buying fixer-upper type properties and allowing you to afford the necessary improvements, facilitating the purchase and helping families and individuals to become homeowners.
Knowledge is power, and when you know what it is and how to get it done, you'll be more likely to land one for yourself. You can see how this program can work well with buying a foreclosure that needs work!
To continue your education on FHA loans, feel free to click on some of the links just below. They can lead you to many more pages of valuable information. Or if you have any questions, feel free to pick my brain.
Find out more about the most common FHA 203b program.
Looking for a home outside the city and wonder if there is a program specially designed for this? Learn how the 203(i) program works.
Here's another program that you may want to check out. The Title 1 Program.
Go to House Buyer Solutions Home Page.
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