Federal Housing Administration (aka FHA), is the government insurance mortgage program. They offer a low down mortgage product of only 3.5% down. They not only offer this low down government insured program but they also offer a property rehabilitation loan (203k loan). This loan follows the FHA minimum requirement down payment, but allows getting bids on work required to fix up the property to FHA lending standards.
FHA allows you to get bids from contractors on potential work and include that onto the purchase price. They will include dollar for dollar into the price to calculate your down payment. A great way to purchase properties that need work and include that into the loan. There are two types of these 203k rehab loans. First, they offer the full 203k loan, that requires a FHA approved consultant (like a project manager) to manage major renovations on the property. They also have a streamlined 203k rehab loan. This is maxed out at 35,000 dollars in repairs and improvements. The nice things about this loan, is that there are only two draws and one is released at closing (50% of the improvements).
The last portion is done upon completion of the work. This reason this loan is called a streamlined because it an easier process in regards to draw management. This is a great loan to buy a house and get some money to fix up the house. Some restrictions to be aware of, the house can't be a new build built in the last year. Also, the property can't have major structural damage and can't have large amounts of mold damage. If you are interested in learning more about the 203k loan please don't hesitate to contact me.
Friday, May 14, 2010
Thursday, May 6, 2010
What is FHA so popular?
Here are just a few reasons that make FHA a popular mortgage program in today's market landscape. Find out more at www.approveMeFHA.com
FHA guidelines are designed to offer more flexibility for evaluating individual borrowers.
• You'll only have to come up with a 3.5% down payment, but some money can come from gifts or grants and all of it could come from a relative.
• Having a 620 FICO score (a standard measure of credit-worthiness) or higher will make you a serious contender to get approved. You may qualify for a FHA loan even with a Bankruptcy (BK) or Foreclosure that is older than three years.
• Borrowers who don't have an established credit history won't automatically be denied an FHA loan. However, we would want to see a stable history of paying bills for things such as rent or utilities.
• FHA will allow the seller to contribute money toward your closing costs, which will allow you to only have or need to bring to closing the 3.5% down payment. This is a good reason to get approved first with us (PreApproved Button), to know how much money you will need to close and how much you will need to negotiate into the contract from the seller to pay your closing costs..
• There is no hard set rule that says your debt to income can't exceed 45%. Typically, a lender looks at your total debt including the new mortgage in relation to your income
FHA guidelines are designed to offer more flexibility for evaluating individual borrowers.
• You'll only have to come up with a 3.5% down payment, but some money can come from gifts or grants and all of it could come from a relative.
• Having a 620 FICO score (a standard measure of credit-worthiness) or higher will make you a serious contender to get approved. You may qualify for a FHA loan even with a Bankruptcy (BK) or Foreclosure that is older than three years.
• Borrowers who don't have an established credit history won't automatically be denied an FHA loan. However, we would want to see a stable history of paying bills for things such as rent or utilities.
• FHA will allow the seller to contribute money toward your closing costs, which will allow you to only have or need to bring to closing the 3.5% down payment. This is a good reason to get approved first with us (PreApproved Button), to know how much money you will need to close and how much you will need to negotiate into the contract from the seller to pay your closing costs..
• There is no hard set rule that says your debt to income can't exceed 45%. Typically, a lender looks at your total debt including the new mortgage in relation to your income
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