May 24, 2018

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Articles in Category: Special FHA Programs

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

Is U.S. Citizenship Required For An FHA One-Time Close Construction Loan?

Is United States citizenship required for an FHA One Time Close construction loan? This issue does not affect all potential FHA borrowers, but it’s a very important one to address, especially given controversy in the news over a variety of societal concerns. Before we get to the specifics of whether or not citizenship is required for an FHA One Time Close mortgage or ANY type of FHA home loan, refinance loan, or FHA reverse mortgage, it must be noted that FHA home loans are approved on the basis of a borrower’s ability to financially qualify and afford the mortgage. The borrower must be able to legally commit to binding agreements including the loan contract itself, and be of sufficient legal age in the state the transaction is to be carried | more...

 
FHA Loans, Wells, And One Time Close Construction Loans

FHA Loans, Wells, And One Time Close Construction Loans

Borrowers who apply for FHA loans may not be clear on whether or not a property served by a well instead of being connected to the local utility is eligible for an FHA mortgage. Is the presence of a well a problem for FHA loan approval? And what about FHA loan standards for FHA One Time Close construction loans? HUD 4000.1 contains guidelines for these issues including the acceptability of a property served by a well instead of a water utility. Borrowers will be relieved to know that FHA mortgage rules do not automatically rule out a property just because a well is present, but that well must meet both FHA minimum requirements and any applicable health code or other local ordinances. For One Time Close construction loans, FHA loan | more...

 
Maximum Loan Amounts For FHA One Time Close Construction Loans

Maximum Loan Amounts For FHA One Time Close Construction Loans

What is the maximum loan amount you can borrow with an FHA One Time Close construction loan? The actual dollar amount is not fixed, it depends on variables including the FHA loan limits in a given housing market and whether or not the borrower is buying land in conjunction with the project. Calculating the Maximum Loan Amount For An FHA One Time Close Loan The FHA loan rules for One Time Close loans, also known as construction-to-permanent mortgages, are found in HUD 4000.1 and include a breakdown for lenders on how to calculate the maximum mortgage loan. The loan limit takes into account the borrower’s down payment and the Loan-To-Value ratio (LTV). HUD 4000.1, page 445 instructs the lender: “The maximum mortgage amount is calculated using the appropriate purchase Loan-to- | more...

 
FHA One Time Close Construction Loans: What's Required At Closing Time

FHA One Time Close Construction Loans: What’s Required At Closing Time

In addition to the usual requirements to close, FHA One Time Close construction loans  (FHA OTC) have some additional FHA documentation requirements borrowers should anticipate. One Time Close construction loans are more complex than existing construction loans for a few obvious reasons-when a borrower has a home built from the ground with an OTC loan, builders must be paid, there are escrow requirements and procedures which must be followed, and there are unique requirements for this type of loan. Do you know what additional documentation may be required to close the deal? According to page 446 of HUD 4000.1, the FHA loan handbook, the additional documents to close include (but are not limited to) a construction rider, a disclosure agreement related to final inspections, a fully executed contract between the | more...

 
FHA Construction Loans And Other Government-Backed Mortgages

FHA Construction Loans And Other Government-Backed Mortgages

House hunters looking for government-backed mortgages (as opposed to conventional mortgages which may have higher down payment requirements and other features) have a variety of options to choose from. Are you in the market for an FHA construction loan such as the FHA One Time Close construction mortgage? Do you need to build instead of buy? FHA One Time Close Construction Loans Borrowers who choose the FHA One Time Close mortgage are applying for a single mortgage loan covering both the construction phase and the mortgage itself. These loans are for those who want to build a home from the ground up, and there are additional requirements for these loans regarding escrow, inspections, and when mortgage payments are scheduled to being. One Time Close (OTC) loans from participating FHA lenders | more...

 
VA One Time Close Construction Loan Tips

VA One Time Close Construction Loan Tips

There are plenty of VA One Time Close construction loan tips you should know about-probably as many as for FHA One Time Close loans or the USDA equivalent. Did you know that the size of your project could affect your ability to get a no-money-down VA home loan? Or that you should discuss the amount of time your VA OTC loan might take with the seller of the land if you are purchasing land and building the home? Know these issues before you apply for best results when you are ready to commit to your VA construction loan. VA One Time Close Construction Loans Require A Contractor VA loan rules for construction loans require the borrower to hire an outside contractor rather than trying to do the work personally. The | more...

 
One Time Close Mortgages: Choices To Consider

One Time Close Mortgages: Choices To Consider

There are many options to consider when planning a One Time Close (OTC) construction loan. Borrowers who want a home built for them from the ground up can choose between FHA One Time Close, USDA One Time Close, and VA One Time Close construction loans. These three programs have some basic differences. VA OTC mortgages allow qualified borrowers to apply with no money down. USDA construction loans may also permit the borrower to apply without the expectation of a down payment, but these construction loans are only for rural areas with populations of up to 35,000 according to a 2017 USDA fact sheet about the program. One Time Close Construction Loans: Occupancy Required Choices between the VA, USDA, and FHA construction loan program basically involve the type of borrower you | more...

 
VA One-Time Close Loans Compared To FHA One Time Close

VA One-Time Close Loans Compared To FHA One Time Close

How do VA One Time Close construction loans compare to their FHA One Time Close (OTC) counterparts? If you don’t know which program you qualify for, now is a good time to learn the differences and similarities. FHA And VA One Time Close Construction Loans Requirements Some things will apply to both FHA and VA One Time Close construction loans. For both types of loan, all borrowers must financially qualify, they must have minimum FICO scores as determined by both the VA/FHA and the lender, and the property must be constructed in the United States or its’ protectorates. VA One Time Close and FHA One Time Close loan rules both require occupancy; you may only have a home built from scratch using a VA construction loan if you intend to | more...

 
FHA One Time Close Construction Loans: Location Matters

FHA One Time Close Construction Loans: Location Matters

Location matters when you are applying for an FHA One Time Close construction loan. These mortgages are for borrowers who don’t want to purchase an existing property but want a home built for them from the ground up, but FHA One Time Close construction loans, (FHA OTC) do have some restrictions on where a home can be constructed. These restrictions aren’t as difficult to understand as you might think; FHA loan officers are required to insure the home as an economic and functional life that will last the duration of the mortgage. Part of that due diligence is making sure the home is capable of withstanding environmental conditions and/or not being put directly in harm’s way due to know problems. That’s one reason why the FHA loan rules for home | more...

 
Can I Do My Own Contracting Work With An FHA One Time Close Construction Loan?

Can I Do My Own Contracting Work With An FHA One Time Close Construction Loan?

When applying for an FHA One Time Close construction loan to have a house built from the ground up, some borrowers want to know if the FHA construction loan program will permit the borrower to act as her own contractor. FHA loan rules found in HUD 4000.1 would seem to make this question fairly easy to answer, but look beyond this quote from the FHA home loan rulebook-this isn’t the only rule that governs the FHA construction loan process: “The Borrower must have contracted with a builder to construct the improvements. The builder must be a licensed general contractor. The Borrower may act as the general contractor, only if the Borrower is also a licensed general contractor.” That is what is found in HUD 4000.1, page 445 under the FHA | more...