FHA / FHA 203K

FHA Home Purchase loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) – which is part of HUD – insures your mortgage.

  • Low down payments – as little as 3.5%
  • Low closing costs – seller can agree to give you the buyer, up to 6% closing costs assistance
  • Easy credit qualifying – credit scoring is easier to qualify

Buying Your First Home or Even Your Second Home?

Some buyers think you can only use FHA once, not true. FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

FHA loans are a great resource and one you should consider when making your home purcahse.

To see if you qualify for an FHA insured mortgage, just complete our contact form or give us a call at 302-266-9500 or toll free 877-266-9500.

FHA Refinance

Homeowners enjoy the benefits of investing in their property year after year. For some, there comes a time when that investment can come in handy. Refinancing with an FHA loan can prove to be an effective way to put that equity to work. Keep in mind that FHA refinancing is only available to homeowners who are currently using their home as their principal residence.

FHA options to homeowners who are considering an FHA refinance mortgage:

FHA Cash-Out Refinance

This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A Cash Out refinance allows homeowners to refinance their existing mortgage by taking out another mortgage for more than they currently owe.

FHA Streamline Refinance

This refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and oftentimes without an appraisal. FHA Streamlined Refinance also cuts down on the amount of paperwork that must be completed by your lender saving you valuable time and money.

See if you qualify – CLICK HERE

FHA 203 K Renovation Loan

Another great FHA program is the 203K. This program has grown in popularity recently, because many homes are being abandoned, left in disarray and need repairs.

What is a 203k FHA insured Mortgage?

Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.

The Section 203(k) loan program is HUD’s primary program for the rehabilitation and repair of single family properties. These loans are beneficial for families since the loan down payment can be as little as 3.5% given the property must be used as a principal residence. This program allows you to roll the rehabilitation and repair cost directly into your mortgage and turn your “fixer upper” into your DREAM HOME.

This may be what you need . . .

You found the perfect home. The outside of the home looks great, but when you go inside the home, you discover it is less than desirable. You wish you could purchase the home, but you don’t have the money to invest to make repairs the way you would like.  To find out how to make your dream a reality, read on. Your Dreams can become Reality!

Purpose of the  FHA 203K Program

Section 203(k) fills a unique and important need for homebuyers. When buying a house that needs repair or modernization, homebuyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money.

Type of Assistance you can get with a FHA 203K:

Section 203(k) insures mortgages covering the purchase of a new home.  You can also use the FHA 203K for refinancing and rehabilitation as long as it is at least a year old.

A portion of the loan proceeds is used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed.

The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit for the area your house is located.  The value of the property is determined by either (1) the value of the property before rehabilitation plus the cost of rehabilitation, or (2) 110 percent of the appraised value of the property after rehabilitation, whichever is less. This formula allows flexiblity for propertities that otherwise would not qualify.

Who is eligible for a 203K?

All persons who can qualify to make the monthly mortgage payments are eligible to apply. Cooperative units are not eligible; individual condominium units may be insured if they are in projects that have been approved by FHA or the Department of Veterans Affairs, or meet certain Fannie Mae guidelines.

What extent of repair will qualify under the 203K program?

The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place. Section 203(k) insured loans can finance the rehabilitation of the residential portion of a property that also has non-residential uses; they can also cover the conversion of a property of any size to a one- to four- unit structure. The types of improvements that borrowers may make using Section 203(k) financing include:

  • Structural alterations and reconstruction
  • Modernization and improvements to the home’s function
  • Elimination of health and safety hazards
  • Changes that improve appearance and eliminate obsolescence
  • Reconditioning or replacing plumbing; installing a well and/or septic system
  • Adding or replacing roofing, gutters, and downspouts
  • Adding or replacing floors and/or floor treatments
  • Major landscape work and site improvements
  • Enhancing accessibility for a disabled person
  • Making energy conservation improvements

What is your next step:

We are ready to assist you in adding the best value to your new home. We are lending experts who specialize in the FHA 203 (k) loan process. Together we have an extremely knowledgeable team of experts who know all of the governmental requirements of the 203 (k) process and we will assist you every step of the way to make sure that you will receive all of the monies you need to complete the job correctly and on time.

Let us know if you would like to see if you qualify: CLICK HERE

To learn more about the program, just click on the button to the right or give us a call at 302-266-9500 or toll free 877-266-9500.