| Since 1934, the Federal Housing Administration (FHA) | | | | refinance. |
| has been helping people obtain loans for their homes. | | | | 4. If a borrower wishes to obtain a 203(k) Rehabilitation |
| The FHA, a division of HUD (Department of Housing | | | | Program, they need to meet the criteria of the HUD |
| and Urban Development), actually insures the loan | | | | ordinances and the Minimum Property Standards of |
| making it so the lender can provide easy credit | | | | the financing program. This new loan program is |
| qualifying, low closing costs and allow the borrower to | | | | referred to as the 203k Rehab program, and is HUD's |
| put down a low down payment. FHA loans are only | | | | main program for the repair and rehabilitation of single |
| provided to people who strictly follow the department's | | | | family properties. This loan is used many times for |
| standards, or their loan application will be denied. HUD | | | | neighborhood and community revitalization. HUD takes |
| was created to help make homeownership obtainable | | | | this program very seriously and strongly backs this |
| to a larger segment of the United States population. | | | | program by providing generous financial support to |
| Prior to considering applying for an FHA loan, refer to | | | | lenders who participate. |
| this set of four criteria that must be met in order to | | | | If the borrower can qualify for their home loan, FHA |
| qualify: | | | | allows for a down payment as low as 3.5% of the |
| 1. When applying for an FHA loan, the borrower can | | | | purchase price. The beauty of the loan is that most of |
| only select the lenders that are approved or | | | | the fees and closing costs associated with the loan |
| accredited by HUD. Other lenders are not qualified for | | | | are included within it. This is only available on 1-4 unit |
| the program. The applicant can go to the HUD-FHS | | | | properties. FHA also offers a loan that allows the |
| website to see the official list of lending companies. A | | | | homebuyer to purchase their home and have money |
| lot of borrowers don't realize they can qualify for an | | | | for fixing up the home all included in one loan. If you |
| FHA loan; all they need to do is call an approved FHA | | | | already own the home you want to re-model, the |
| lender and call them up for any other details related to | | | | borrower can refinance their home and include the |
| filling out the FHA loan application. | | | | cost of fix up all in one loan. |
| 2. The borrower's credit report must be in good | | | | The set of criteria for being able to obtain an FHA loan |
| standing for the past two years and also must meet | | | | is fairly simple and understandable. It also applies to |
| some other credit qualifications. HUD is looking for | | | | minority borrowers and borrowers with sub par credit |
| people that have proof of being able to repay, which is | | | | history. These HUD loans (which are actually FHA |
| based on the borrower's debt-to-income ratio. This is | | | | loans) are serviced by lenders nationally, not just for |
| definitely understandable in light of the recent years of | | | | small urban locations. A borrower can obtain an FHA |
| loan defaults. | | | | loan for a 2nd or 3rd home, although only one FHA |
| 3. If a borrower wishes to refinance under the Home | | | | loan can be held at a time. Your lender will have more |
| Affordable Modification Program, the application will be | | | | details regarding this set of four criteria readily available |
| denied if they have a default mortgage on file. All | | | | to you. They will also have access to the HUD |
| problems with the past loan servicer regarding | | | | foreclosure homes that have been in the news lately, |
| delinquency must be settled, prior to being able to | | | | which the borrower is able to bid on. |