FHA Loan Requirements for 203K Loans

[ by Victoria Belle-Miller ]

Lenient FHA Loan Requirements and Make FHA Loans the Right Choice FHA loans, which are insured by the Federal Housing Administration, are great financing option for homeowners who want to purchase a house or refinance their current home loan. FHA loans have low interest rates and usually only require a down payment of 3.5 percent! FHA loan requirements are easier than other types of home loans, so future and current homeowners are more likely to qualify. 203K Rehabilitation Mortgage Insurance Program is a Unique Type of FHA Loan The FHA has a specific loan program to help homeowners who want to make improvements or repairs on their home. There are two types of loans in this program, one for repairs that cost less than $30,000 and another for repairs that cost more than $30,000. A streamlined 203K option is also available to homeowners. It allows homeowners to finance an additional $35,000 into the FHA loan to make improvements to their new home. 203K FHA Loan Requirements There are certain FHA loan requirements that exist on a 203K loan. Homeowners must spend at least $5,000 on their home repairs. The total cost of the mortgage, including the repairs, must remain within the FHA loan limits for their geographical area. The homeowners also must live in the home that they finance with a 203K FHA loan; the 203K loan cannot be used to flip houses. Work on the house must begin within 30 days of the FHA loan closing and must be completed in six months. For homeowners who want to make repairs to their house and need additional financing, the 203K FHA loan could be the best option. For more information on the 203K rehabilitation mortgage insurance program or about FHA loan requirements, please call 1-877-264-4736 to speak with an FHA loan specialist about your financing options. 02:31 PM