| FHA home loans, which are insured by the Federal | | | | individuals with disabilities, or making a home more |
| Housing Administration (FHA), are great financing | | | | energy efficient. More specifically, the loan can be used |
| options for any homeowner who wants to purchase a | | | | for roofing, plumbing, flooring, painting, minor remodeling |
| house or refinance his or her current mortgage. These | | | | and more. |
| loans have low interest rates and usually only require | | | | Loan Requirements |
| down payments of 3.5 percent! FHA loan | | | | There are certain requirements with this type of |
| requirements are simple, so current and potential | | | | financing. Homeowners must spend at least $5000 on |
| homeowners are more likely to qualify for these loans | | | | their home repairs in order to be eligible. Homeowners |
| than other types of loans. | | | | must get cost estimates from a licensed and insured |
| FHA 203k Rehabilitation Mortgage Insurance Program | | | | contractor(s) before signing the sales contract. The |
| The FHA has a specific loan program to help | | | | total cost of the mortgage, including the repairs, must |
| homeowners who want to make improvements or | | | | remain within the FHA loan limits for the county in |
| repairs on their home, but do not have the funds to do | | | | which the home is located. |
| so. These loans are called FHA 203k loans and can | | | | This loan cannot be used to flip houses, and the |
| be used for either a purchase or a refinance. There | | | | homeowner must use the loan on the home in which |
| are two types of loans in this program, one loan is for | | | | he or she lives. The work being done on the house |
| repairs that cost less than $30,000 and the other loan | | | | must begin within 30 days of the loan closing. All work |
| is for repairs that cost more than $30,000. | | | | must be completed within six months to comply with |
| A streamline FHA 203k option is also available to | | | | the loan requirements. |
| homeowners who are interested in doing non-structural | | | | If a homeowner wants to make repairs to his or her |
| repairs or improvements. This loan requires less | | | | home and needs additional financing, this type of |
| documentation and can be less costly. It allows a | | | | financing could be the best option. Many of the same |
| homeowner to finance up to an additional $35,000 into | | | | eligibility standards used for standard FHA home loans |
| his or her mortgage in order to make improvements to | | | | apply to the FHA 203k loan. Most lenders will require |
| the home. An FHA home inspector or appraiser can | | | | that the borrower have a credit score of at least 620 |
| identify home repairs that need to be made. | | | | to be eligible. To qualify for the loan, certain energy |
| How the Loan Can Be Used | | | | efficiency standards, as well as certain structural |
| Although there are some restrictions on what the loan | | | | standards, must be met. |
| can be used for, there are plenty of renovations and | | | | This loan could be great solution for homeowners who |
| home repairs that the loan does cover. In general, | | | | want a better way to finance home repairs and |
| these include modernization, eliminating safety or health | | | | improvements without depleting their savings. |
| hazards, making a home more accessible for | | | | |