Use the FHA Mortgage Specifically Created for Home Improvement

 


Article by: Judi Moore

Almost everyone knows about FHA mortgages. They are tailor-made for first time homebuyers and others with less than perfect credit or other financial issues. You don't have to be low income or have bad credit to use FHA, but generally the loan limits prohibit high priced homes. , Know what you need to buy security system

What you may not know about FHA is that there is a special loan program designed to provide the funds to buy or refinance your home , Selling Solar to Your Utility – Interconnection Agreements PLUS additional funds to make repairs , Do You Know How To Use Window Coverings? or improvements. , Knobs, Hinges and More is Proud to Introduce Objects by Tracy Glover Studios and Michael Healy Desig

This FHA mortgage is called the 203K and the K is the operative part of the name. Not every lender participates in the rehab loan program, but the major national lenders do. If the loan officer you contact is unaware, then call , Custom Build Log Homes - 3 Options When Building a Log Home the corporate office and ask them to direct you.

The FHA 203K loan program calls , Selling Solar to Your Utility – Interconnection Agreements for an FHA inspector to go over the house, , Laying Tile: An Overview of the Steps to Laying Ceramic Tile using the plans , Energy Saving Light Bulbs - The Sensible Alternative you gave him. Before you get to this inspection phase, you should be working with a general contractor , 5 Ways to Decide if a Bathroom Remodel Makes Sense who understands how to , A Fabric Hammock is Comfortable Casual Chic provide plans , Why The Best Flooring Idea Is To Install Hardwood Floors and specs for a project. Plans , Do it Yourself Home Repair - How to Get Started and specifications are standard in the contracting industry for anyone managing a project >$5000, which is the minimum rehab amount for this loan program.

The FHA inspector will decide if the project is feasible, depending on whether there is additional work required to bring the property , Spa Equipment: Should You Go Automated? up to code, and whether or not the property , Caulking for Comfort and Efficiency will appraise for enough to make the project "worth it". FHA is willing to lend based on the after-rehab value and will even stretch that value a little in order to get houses , Small Space Bathroom Remodeling - Maximize the Space and Save brought up to code.

Once the lender is happy with the valuations, the plans , A Fabric Hammock is Comfortable Casual Chic and specs, and the inspector's report, your loan file will be reviewed by an underwriter specially trained and certified in rehab loans. Your credit and finances do not have to be perfect to be approved, but the creditworthiness and qualifications are similar to a regular FHA loan.

One of the benefits of a 203K is that all costs can be added into the project. The fees, permits, closing costs, etc. are all added up and your downpayment on the purchase is calculated on the total. If you are refinancing instead of purchasing, the amounts are totaled the same way, but you might already have enough equity in the home , Comparing Carbon Block, Reverse Osmosis, and Other Common Water Filtration Methods to avoid coming up with any cash.

What's next? Once approved, the loan closes and the rehab portion of the money is escrowed by the lender. The contractor , Do it Yourself Home Repair - How to Get Started submits requests for payment and each phase is inspected. As soon as the work passes the inspection for completion, the contractor , Purifiers Q&A: Water And Air Purifier And Filter Basics is paid. You can not go back to the well for more money, so your initial plan , Energy Savings from Solar Products must be a good one. A contingency fund is usually added in during the total project calculation.

This contingency fund can only be used to fund hidden repairs , Architecture that were not evident during the initial workup. Any remaining funds in the contingency are used to pay down the mortgage at the end of the project.

The FHA 203K mortgage is not a "piece of cake", but if you do not qualify for low cost money at the local home , Bed and Bedding via Online Shopping improvement equity loan bank, then it is very definately worth looking into.
Judi Moore authors Ask The Underwriter at 2rHouse.org and personally answers questions from readers about FHA mortgages and mortgage advice , How To Select A Lamp Shade in general.

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