Benefits of the FHA 203k Mortgage Program
The FHA 203k loan is a vital government sponsored program for the refurbishing and rehabilitation of single-family properties. Essentially, it's a glorified home enhancement loan. The 203K mortgage is a remarkable tool for community revitalization.
Where can you apply the FHA 203k mortgage?
You may use FHA 203k rehab mortgage to purchase one to four family dweling for residential purposes and renovate all with a single loan. Other FHA 203k loan qualifying properties can be sourced through REO (properties owned by banks), short sale properties and eligible homes from the HUD register.
However, the FHA 203K mortgage program is not only meant for purchasing a home. If you are an eligible homeowner, you can effectively use this program to refurbish your residence. Once more, it is in essence a construction loan for upgrading existing homes.
How beneficial is the FHA 203k rehab loan?
Nearly all regular mortgage programs only offer you "permanent" financing which implies that the lender will not fund the purchase of the property unless it is ready to be funded as-is. In case that property needs to be improved or repaired, several lenders will require that you do this prior to the financing deal with the lending institution. You can do the repairs from your pocket before purchasing the property; however, with the FHA 203k mortgage program you don't need to.
When you are applying for an FHA 203k loan, the property valuation will be based on the post-repair value and comprises an escrow account to repair the property to the lenders' preferred condition.
Now, considering the many REO homes in the market requiring repair, it is clear that "regular" FHA mortgage would pose a problem if it were the only mortgage you would access for REO and rehab properties.
FHA 203ks are safe and easier to manage when compared to the other forms of financing; moreover, their lenders are protected. Since FHA 203k mortgage funds both the rehab and purchase costs in a single mortgage loan, it is nowadays one of the most popular mortgage options. In addition, the eligibility standards are quite similar to those in the FHA loan guidelines –making financing through an FHA 203K rehab mortgage very attractive.
For any additional query about the benefits of the FHA 203k mortgage program or if you're purchasing a home that requires repairs and want to apply for the FHA 203k, please visit EZ Funding Group, Inc. website or you can submit your questions by clicking here.
Also, you're able to visit the Department of Housing and Urban Development (HUD) for additional information about the benefits of the FHA 203k mortgage program and of course feel free to contact EZ Funding Group, Inc. to get pre-qualified for the FHA 203k program.
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