subject: How to Qualify for FHA 203K? [print this page] How to Qualify for FHA 203K? How to Qualify for FHA 203K?
Are you planning to buy a home for your family? One that looks beautiful on the outside, but inside, the sink is broken, the plumbing is haywire and the roof is leaking! And you simply do not have the funds to cover everything. But then, you really have no reason to sink your brains over this one. Housing loans offered by FHA or federal housing administration allows loans especially for housing purposes.
One of the loaning programs administrated by FHA home loans is the FHA 203K. This loan program is for those who want to buy a new house that has to be renovated and for those who want to improve and remodel their existing house. There are a set of laid down criteria for qualifying for this loan, but it is very useful for those who are interested in a new house or want to renovate the current one.
When you are applying for this loan you have to meet a set of conditions.
1. You must have spent at least $5000 as expenses towards the house.
2. Your financial status that is both credit and income wise should be clean and without any uncanny twists and curves.
3. The property which you are going to buy or remodel should come under FHA approval.
4. The construction of the house you are going to buy or improve should have been finished with at least one year previous to your application of the loan.
5. You must use the loan to remodel or improve the house that is being currently used that is, being lived in.
6. The repairs of the property should begin within 30 days of receiving the loan.
7. An expert contractor who has a very good idea about FHA home loans should estimate the amount needed for renovation.
8. The total loan amount should not go over 110% of the "as-improved" value of the house.
9. The fee-consultant, who works with the money-lender in getting your loan application granted, must approve the property upon visiting it.
10. The lender from which you are going to borrow the money should be FHA approved.
The loan money cannot be used for any accommodation; it has to be a living space like condos or apartments and the like. There are many restrictions as to how the money can be used. It should and can be used for upgrading, removing any health or safety hazards, roofing, plumbing, flooring, painting, and basic refashioning.
It covers both purchase price and renovation prices. Once the fee-consultant approves the property and you are qualified for the loan, your contractor will start receiving the loan money in draws. The fee-consultant has to approve of each phase of remodeling or renovation. After he is satisfied with the progress of each phase he grants the next portion of the money.
