Alabama FHA 203k Program Highlights
The FHA 203k streamline loan program has become well-known with the recession in the housing market. When a property is owned by the bank, chances are that the property may be in need of a little work and the FHA 203k loan is a great option. Some of the frequently asked questions we see about the FHA 203k include:
What exactly is an Alabama FHA 203k loan?
The FHA 203k mortgage is a rehabilitation loan that works much like a development loan. The buyer of the home is able to obtain a home that is in need of repairs and is able to mortgage the repair work in the mortgage to correct items in the house. The FHA 203k loan consists of the purchase price of the home plus the construction costs for the work to be performed after close.
- $100,000 purchase price of home
- $20,000 Repairs Needed
- $120,000 Total Loan Amount
FHA 203k Loans in Alabama: How much do you write the contract for a FHA 203k sales contract?
The offer is the purchase price of the residence 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.
FHA 203k loans: are they easier to qualify for than a regular FHA loan?
Getting an FHA 203k loan is roughly the same as getting a regular FHA loan. What does it take to qualify for an FHA loan? Generally speaking, a credit score above 620, a good job and a down payment of 3.5%. Of course there are more details to being qualified, but those are the basic requirements.
How do I go about finding the right contractor for the work?
It is encouraged that you work with a general contractor that can perform all repair work. Your loan officer can easily help recommend one – they ought to know at least one good contractor. It is also valuable that the contractor be practiced in FHA guidelines so that they can include any FHA required items in their contract.
AlabamaFHA 203k Loan: More Information
Getting help with your FHA 203k loan locally in Alabama is easy, simply get started below and completing your information. A FHA 203k expert will be in touch and be able to answer all of your questions.