What Is A FHA 203(k) Loan?
A 203(k) loan enables homebuyers to finance both the purchase of a house as well as the cost of it’s rehabilitation to bring it up to FHA standards through a single mortgage. This can also be used to finance the rehabilitation of an existing home.
What Can I Use A FHA 203k Loan For?
If you are looking to buy a home that needs repairs, or you are looking to refinance and rehabilitate your current home, an FHA 203(k) loan could be perfect for you!
Is A FHA 203k Loan Right For Me?
Typically, when buying a house that needs repairs homebuyers usually have to follow a complicated and costly process. Other acquisition and improvement loans often have relatively high-interest rates and shorter terms for repayment that sometimes include balloon payments. The FHA 203(k) loan offers homebuyers a solution that helps both borrowers and lenders by insuring a single, long term (fixed or adjustable) loan that covers the acquisition and rehabilitation of a property.
FHA 203k Loan Requirements
- Income Requirements: A borrower’s back end debt-to-income ratio, the total of the mortgage and all your monthly debt, must not exceed 55% (credit score dependent).
- Down Payment: The minimum down payment for FHA loans is 3.5% of the purchase price.
- Credit Score: The minimum credit required to obtain a Long Beach Home Loan FHA loan is a middle score of 620 (special circumstances may allow for lower scores).
- Property Requirements: Properties purchased with a Long Beach Home Loan FHA loan must meet the safety and security requirements implemented by FHA.
Working With A Qualified Lender
At Long Beach Home Loan we are committed to serving clients throughout the state of California with all of their home needs. If you are thinking about purchasing a home with a FHA 203(k) loan, we can help! Contact me, Jack Skovgard (562-340-9453), for any questions you may have about the FHA 203(k) loans, CalHFA down payment assistance loans, or CalHFA closing cost assistance loans to see if one might be right for you.