Arizona FHA 203k Highlights
The FHA 203k mortgage program has become fashionable with the downturn in the housing market. When a property is owned by the financial institution, 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 mortgage program include:
What is the FHA 203k loan?
The FHA 203k loan is a rehabilitation loan that works much like a construction 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 fix 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.
An example scenario you may see in Arizona:
- $100,000 purchase price of home
- $20,000 Repairs Needed
- $120,000 Total Loan Amount
When writing a contract for a FHA 203k loan, how much do I write the sales contract for?
The offer is the purchase price of the home only. You don’t want to include the cost of repairs anywhere in the sales contract or offer. In the above example, the purchase price on the sales agreement or offer would be $100,000.
Arizona FHA 203k loans: are they easier to qualify for than a regular FHA loan?
The requirements to qualify are the same as a traditional 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 able to qualify, but those are the general highlights.
How do I go about finding a contractor for the repairs?
It is encouraged that you work with a general contractor that can perform all whatever repair work is needed. Your loan officer can easily help recommend one – they ought to know at least one good contractor. It is also very important that the contractor be practiced in FHA guidelines so that they can include any FHA required items in their contract.
Arizona FHA 203k Loan: More Information
Getting help with your FHA 203k loan locally 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.