FHA Loans Purchase:
- Low interest rates
- Gift for down payment
- No credit score allowed
- Non occupying co-borrower
- Seller paid closing cost up to 6%
- 3.5% down with 580 credit score
FHA Loans Purchase:
The FHA 203K loan program is the primary program for the rehabilitation and repair of single family properties.
The loan program offers the borrower one mortgage loan, to finance both the acquisition and the rehabilitation of the property.
To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work.
This program can be used to accomplish rehabilitation and/or improvement of an existing one-to-four unit dwelling in one of three ways:
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 and a maximum of $35,000.
The value of the property is determined by either:
You’ve found the perfect home but it needs some work. A 203K loan is your answer. It’s one loan both for the purchase and rehab.
Let’s say you want to purchase a property for $100,000 and the property needs $35,000 for rehab. The total of $135,000 will require a 3.50% down payment or $4,725.
The offer is the purchase price of the home only. Do not include the cost of repairs anywhere in the sales contract or offer. In the above example, the purchase price on the sales contract or offer would be $100,000.
At closing, the seller of the property is paid off and the $35,000 are put in an escrow account to pay for the repairs and improvements during the rehabilitation period.
The sales contract should state that the buyer is seeking a 203K loan and that the contract is contingent on loan approval based on additional required repairs by the FHA.
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