South Carolina FHA 203k Highlights
The FHA 203k streamline loan has become widespread with the decline 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 mortgage is a great option.
Some of the frequently asked questions we see about the FHA 203k streamline program include:
What exactly is a South Carolina FHA 203k loan?
The FHA 203k streamline program is a rehabilitation loan that works much like a construction loan. The buyer of the home is able to purchase a home that is in need of repairs and is able to mortgage the repair work in the mortgage to repair items in the house. The FHA 203k mortgage loan consists of the purchase price of the home plus the construction costs for the work to be performed after close.
One Possible FHA 203k Example:
$100,000 purchase price of home
$20,000 Repairs Needed (see a list of the most common FHA 203k repairs)
$120,000 Total Loan Amount
The FHA 203k loan: How much do I write the sales contract for?
The offer is the purchase price of the property only. Be sure not 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.
Is this loan harder to qualify for than a traditional 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 qualifying, but those are the general requirements.
How do I go about contracting the work for FHA 203k loans?
It is highly recommended 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 imperative that the contractor be practiced in FHA guidelines so that they can include any FHA required items in their contract.
South Carolina FHA 203k Mortgage: Get More Information
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