The Federal Housing Administration (FHA) has made available the FHA Outlying Area Program, which is specifically tailored for those individuals who wish to purchase homes outside the city area.
This particular program is Section 203(i) of the FHA mortgage loans.
On this page I will teach you how the FHA 203(i) loan works, what are the requirements and where to find them.
If you think you are ready, be sure to get a loan that works well with first time home buyers.
The program is particularly beneficial in areas where resale might not be as easy if the borrower were to default on their obligations to repay the mortgage.
By this I mean that the property you are looking at will
not be in the city or even the suburbs. It would most likely be in a
rural area or a farm community.
This neat outlying area program is designed to make it possible for low to moderate income families to realize their dreams of becoming homeowners with lower initial costs for their FHA mortgage loans. To be quite frank, very few people actually get one of these kind of loans. This is mainly due to the fact that qualifying for it is rather difficult.
Meeting these requirements is like a person visualizing their home knowing it will become a reality!
With this insurance from FHA on such mortgages, it encourages lenders to make available loans to people who are worthy of credit, but may not be able to meet the requirement of conventional loans. This protects them against default if something undue should happen.
Using the FHA outlying area program or the 203(i), potential homeowners can purchase existing properties or those that are under construction. They can also be used to purchase a farm house that is sitting on two or more acres that are adjacent to public roads that are for all-weather use.
Meeting these requirements is like a couple visualizing their home knowing it will become a reality! You just need to realize that very few lenders even know about this loan product. That is what really ticks me off about lazy loan officers. In many cases they know very little. Worse yet, they really don't want to dig and find them for you.
By reading this website, chances are very good you know more than many in the loan origination business. But, then again you are a smart first time home buyer right? You want good reliable information. That is why I scour the HUD.Gov website and put things in plain and simple English for my web visitors.
So in other words, I go straight to the source for you and try to break it down in layman terms.
Anyone who is able to meet the standard qualifications for the mortgage payments, the initial investment of cash and credit requirements for the FHA home loan can be eligible. The requirements are the same for the FHA outlying area program as it is for the other FHA mortgage loans.
The down payment requirements are a bit different with the FHA outlying area program though. It goes on a graduated scale. To make it simple what you need to know is that the mortgage cannot exceed 98.75% of the value of a house up to the $50,000 mark. Then the maximum is 97.75% for houses worth more than $50,000.
There is mortgage insurance which has an upfront premium and can be added on to your mortgage balance. Then there is an annual mortgage insurance premium (MIP) which is paid in your monthly payment.
However, this program is limited to those who wish to be owner-occupants of the property being purchased. The properties are usually houses on 2 or more acres of land and can have up to 4 units.
Applications for the FHA outlying area program or the 203(i) are made through any FHA-approved lending institution. These requests are through the "direct endorsement" provision, which provides them with authorization to do so without having to submit paperwork to HUD.
In order to insure that only low to moderate income individuals are served by FHA mortgage loans, homes within the range of $81,548 to $160,950 are served with this type of FHA mortgage.
A lot of loan officers shy away from FHA and I do not know why, because it is a good program to start off with. So do not hesitate to investigate what you qualify for. It does not cost anything to find that out.
If you have any questions on this or other FHA loan programs, feel free to click on the some of the links below to find answers. Or you can use the "Pick My Brain" section of this website by using the appropriate button on the nav bar just to the left on this page.
By visiting our page First Time Homebuyer Grants List by State and click on your state, then a list of offices will show up. Contact the office closest to you and ask them for a list of lenders that are approved for the FHA outlying area program in your area.
Go to House Buyer Solutions Home Page.
Mar 06, 20 11:56 AM
Itching for Alabama first time home buyer grants to purchase that home? Find the best grants for home buying in Alabama and other home mortgage programs available on this page!
Jan 01, 20 03:08 PM
Searching for Rhode Island first time home buyer grants to purchase a home? Find cool grants/programs for home buying in Rhode Island available on this page!
Nov 13, 19 09:36 AM
Looking for first time home buyer grants state lists? Find the coolest list of agencies by state helping you locate down payment help for that first mortgage.
Follow Us On Twitter