December 18, 2017
What should I know about FHA home loans? The first thing to remember is that your options with an FHA mortgage include new purchase loans, reverse mortgages, refinance loans, and rehab loans. You can do a lot more than just buy a house as a first-time home loan applicant.
FHA Home Loans Are Not Just For First-Time Buyers
The most common misconception about FHA home loans is that they are ONLY for first-time buyers. This is not true. No matter how many times you have borrower money to buy a home before, if you are interested in purchasing a primary residence, the FHA home loan is an option for you.
FHA Loans Include Mobile Home Loans and FHA One-Time Close Construction Loans
The list of FHA home loan options include the ability to buy a manufactured home which is shipped from the dealer or manufacturer to your site and assembled there. Not all FHA lenders offer manufactured home loans, but the ones that do offer the ability to get a loan with a lower down payment requirement (3.5% of the adjusted value of the home) than many conventional mortgages (depending on the lender).
FHA home loan options also include construction loans so you can have a house built for you rather than purchasing existing construction properties.
This option is known as an FHA construction-to-permanent loan, but it’s also advertised as the FHA One-Time Close construction loan. It’s called a “one-time close” loan because unlike some other construction loans that require two applications and two closing dates, there is a single loan application process and only one loan closing date.
FHA Loan Options Include Refinancing Into An FHA Mortgage
Already have a conventional mortgage but want to refinance into an FHA loan? This is definitely possible. Talk to a participating FHA lender about cash-out refinance loan options and no-cash-out versions. Refinancing out of an adjustable rate mortgage and into a fixed-rate FHA mortgage loan is also possible.
FHA Loans Feature Energy-Efficient Options
You can apply for an FHA Energy-Efficient Mortgage which allows a higher loan amount for the purpose of installing approved energy efficient upgrades to the home.
You’ll work with your loan officer to determine the amount of money added to the loan and how that money is to be used, but in general there is a list of energy efficient upgrades allowed under the program you can choose from.
Talk to a participating FHA lender about these options-you may be surprised to learn what is available to you.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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