November 22, 2019

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Articles in Category: Special FHA Programs

Types Of Homes You Can Buy Or Build With An FHA Mortgage

Types Of Homes You Can Buy Or Build With An FHA Mortgage

What types of home can you purchase or build with an FHA mortgage? For the purposes of this article, we are talking about the status of the property rather than the property type. It’s true that FHA loans are available for condo units, mobile homes, and manufactured homes, and you can also use an FHA One-Time Close construction loan to build a home from the ground up on your own land. You can use an FHA mortgage to buy or build a single-unit home or you can purchase a property with as many as four living units. But FHA home loans also take into account the status of the property as an existing construction home, new construction, etc. The list of property types includes: Proposed Construction where no concrete or | more...

 
FHA Home Loan Rules For Construction Loan Escrow Accounts

FHA Home Loan Rules For Construction Loan Escrow Accounts

Do you need a construction loan to build on your own land? The FHA One-Time Close construction loan can help you do just that; this mortgage features one loan application and closing date to build your house, and you aren’t required to pay more than the usual low 3.5% down payment for qualified borrowers. When using a construction loan, the borrower will need to use an escrow account to make the payments for labor, materials, and other construction costs. But there are rules that govern how these “draws” are to be made; HUD 4000.1 contains those rules, which include the following instructions to the lender: “At closing, after funds are disbursed to cover the purchase of the land, the balance of the mortgage proceeds must be placed in an escrow | more...

 
Construction Loan Advice For New Borrowers

Construction Loan Advice For New Borrowers

Are you thinking about using a construction loan to build a home from the ground up on your own land? The FHA One-Time Close construction loan features a low 3.5% down payment even for those who have never borrowed or purchased a home before. There is also a VA version of the One-Time Close construction mortgage offering 0% down to qualified veteran borrowers, those who still serve, and certain military spouses. The One-Time Close construction loan offers a single mortgage application for both the construction of the home and the mortgage itself; borrowers no longer have to apply for one loan to build and one loan for the mortgage. That means peace of mind during the entire process, but there are some rules and guidelines you’ll need to follow during | more...

 
Construction Loans For First-Time Home Buyers

Construction Loans For First-Time Home Buyers

Some first-time homebuyers have a dream to build a home on their own land. These borrowers may wish they had more home buying experience so that they could pursue this dream. The good news is that with an FHA One-Time Close construction loan, even a first-time home buyer can potentially qualify for the loan that features one application, one closing date, and no worries about needing to apply for a second loan for the mortgage after the construction loan has been approved. The FHA One-Time Close construction loan can be used by first-time homebuyers with better credit (many participating lenders require slightly higher FICO scores for construction loans). It’s best not to be in a hurry to get the home completed since the process of hiring and using contract laborers | more...

 
FHA Home Loan Myths Explained

FHA Home Loan Myths Explained

There are plenty of myths about FHA home loans. For example, some people STILL believe the FHA home loan program is a need-based mortgage loan offered only to low-income house hunters. This is not true–any financially qualified borrower can apply for an FHA mortgage. There are no income caps or need-based requirements for FHA loan approval. But that’s just the tip of the iceberg. FHA home loans can be used to buy certain property types including condo units and mobile homes; FHA home loans can even be used to have a house built on your own land with a low 3.5% down payment. FHA Loan Myths: First Time Home Buyers You do NOT have to be a first-time homebuyer to qualify for an FHA mortgage. You can be an experienced | more...

 
Build A Home On Your Own Land With A One-Time Close Construction Loan

Build A Home On Your Own Land With A One-Time Close Construction Loan

A construction loan to build a house on your own land is not out of reach even for a first-time homebuyer. There are multiple options for building a home from the ground up; you can apply for an FHA One-Time Close loan, a VA construction loan, and there are even USDA construction loans that allow qualified borrowers (this is a need-based loan) to build a house instead of buying an existing one. But there are some mistakes some house hunters make when pursuing a construction loan you should avoid; sidestepping these can definitely help you save time and money. Save Early For Your Down Payment Some construction loans (VA and USDA) have no down payment requirement. All others do. And even the VA and USDA equivalents of an FHA One-Time | more...

 
Home Loans For Building On Your Own Land

FHA Loan Appraisal Requirements: Repairs

FHA loan rules require an appraisal of the property secured by the mortgage regardless of whether it’s an existing construction home or if you choose to build on your own land using a One-Time Close loan. Do you know what the home loan rules say about any required repairs or corrections? You may not expect an appraisal-directed repair from a new construction home. But if the FHA appraiser finds something that does not meet local building code, or if there was some kind of damage uncovered during the appraisal (these are just two examples of what could happen at appraisal time on a new construction home) those issues must be corrected. HUD 4000.1, the FHA Single-Family Home Loan Handbook, instructs the lender that in cases where the appraisal uncovers things | more...

 
Home Loans For Building On Your Own Land

Home Loans For Building On Your Own Land

If you do not want to buy existing real estate or hire a realtor, and prefer to design your own home (or have one designed for you), a One-Time Close (OTC) construction loan is for you. These loans are named “One-Time Close” because unlike some construction loans that require two applications, two approvals, and two closing dates, One-Time Close mortgages have ONE loan for both the construction of the home and for the mortgage itself. These construction loans are available under several government-backed lending programs such FHA One-Time Close construction loans, VA Construction loans, and the USDA equivalent. VA and USDA loans have no down payment requirement, but VA mortgages are not for the general public (qualifying veterans, currently serving troops, and certain surviving spouses of military members who died | more...

 
The FHA Loan That Helps You Build On Your Own Lot

The FHA Loan That Helps You Build On Your Own Lot

The FHA One-Time Close construction loan FHA One-Time Close Loan is a mortgage that lets the borrower design and build a home on the borrower’s own land. If you would rather build a home rather than look at real estate listings for an existing construction house, the One-Time Close loan is for you. There is an FHA version of the One-Time Close construction mortgage that requires a low 3.5% down payment. There is also a version of this construction loan offered by the VA to qualifying veterans and currently serving military members. The VA One-time Close construction loan has a 0% down / zero-down option. No money down is required for a VA construction loan up to the VA loan limit. See the end of this article for more information | more...

 
FHA disaster relief changes

FHA Disaster Relief Changes

In August of 2019, the FHA and HUD issued press releases and Mortgagee Letters describing changes to the FHA loss mitigation guidelines for those recovering from natural disasters in federally-declared natural disaster areas. The FHA states that the new rules affect homeowners who live or work in a “Presidentially-Declared Major Disaster Areas (PDMDAs) of Hurricanes Harvey, Irma and Maria or certain California Wildfires, Flooding, Mudflows, and Debris Flows” according to the HUD official site. Certain temporary measures the FHA and HUD passed in recent times to help improve disaster recovery in these areas are now made permanent. There are some features that have been added that streamline the application process for FHA loan relief, forbearance, and other measures. According to the HUD official site, lenders can use a recent bank | more...