April 27, 2018

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Articles in Category: FHA One-Time Close

FHA Home Loan Closing Costs You Should Anticipate

FHA Home Loan Closing Costs You Should Anticipate

FHA home loans have closing costs a borrower should plan to save and pay for. No matter if you need an FHA Home Equity Conversion Mortgage, a 203(k) rehab loan, or an FHA One Time Close construction loan, there will be closing costs to pay for. No borrower should plan for a home loan without anticipating the closing costs. You should budget and save for these expenses as early as possible-once you know you are interested in purchasing a home, you should prepare for these costs. HUD 4000.1 tells the lender that FHA loan rules permit closing costs; the lender “may charge and collect from Borrowers those customary and reasonable closing costs necessary to close the Mortgage. Charges may not exceed the actual costs.” This is not a complete or | more...

 
One Time Close Construction Loan Options: The VA OTC Loan

VA One-Time Close Construction Loan Options for Military Veterans Expanded

Some house hunters get fed up with looking for just the right home, while others start out their home loan journey knowing in advance they want a house built for them. What options to these borrowers have? There is an FHA home loan known as the FHA One-Time Close construction loan that lets borrowers apply for a single loan that covers both construction costs and the mortgage itself. The FHA version of this type of construction loan requires the borrower and lender to work together to establish a plan for the project including estimated completion times, interest rates, budgets, and more. Some borrowers aren’t interested in FHA home loans since they have other options; do qualifying military veterans have a VA loan version of the FHA One Time Close Mortgage? | more...

 
FHA One Time Close Construction Loans: An Option You Should Consider

FHA One Time Close Construction Loans: An Option You Should Consider

The FHA One Time Close construction loan is an option you should consider if you are interested in having a home built for you rather than purchasing an already-lived-in property. Construction loans are different than existing construction loans, and the FHA One Time Close (OTC) construction loan offers a single application, a single closing date, and more peace of mind for the borrower once the loan has been approved. FHA One Time Close Mortgages And FICO Score Requirements You will have higher credit requirements with an FHA One Time Close loan due to the higher risk for the lender. Your application may require a FICO score of 620 or higher at the minimum, depending on the lender. Here’s a sample breakdown of FICO score requirements from one hypothetical lender. Please | more...

 
FHA Loans For Houses, Condos, and Townhouses

FHA Home Loans For Houses, Condos, And Townhouses Part One

What should you know about FHA home loans for houses, condos, and townhouses? There are plenty of issues to keep in mind including down payment requirements, appraisal rules, and special options. FHA Loan Rules For Houses The FHA loan handbook, HUD 4000.1, addresses home loans for new houses depending on their classification as existing construction, new construction, or proposed/under construction. Borrowers who want to buy an existing construction home will be looking at property that has had at least one owner. Existing construction FHA loans require an appraisal and the borrower is required to make a minimum down payment of 3.5% of the adjusted value of the property unless the transaction requires more due to credit issues, identity-of-interest problems, etc. New construction loans (such as the FHA One Time Close | more...

 
FHA One Time Close Construction Loans: How They Work

What Are The Differences Between FHA Construction Loans And Other FHA Home Loans?

What are the basic differences between FHA One-Time Close construction loans and other types of FHA mortgages? Borrowers should understand the basic differences and how they will affect your transaction. FHA One-Time Construction Loans Have Different Appraisal Requirements When an FHA loan applicant wants to purchase a home that is considered “existing construction”, which has been built for at least a year or more with at least one owner, the appraisal process happens as a condition of loan approval to insure the property meets minimum FHA standards. When you apply for an FHA One-Time Close construction loan, also known as an FHA construction-to-permanent loan, an inspection is required to insure the property meets minimum standards. HUD 4000.1 explains what the inspection requirements are for New Construction properties broken down into | more...

 
FHA One-Time Close Construction Loan Rules For Maximum Mortgage, Down Payment

FHA One-Time Close Construction Loan Rules For Maximum Mortgage, Down Payment

FHA One-Time Close Construction Loan rules for maximum mortgage amounts and down payments are found in the FHA loan handbook, HUD 4000.1. The FHA One-Time Close mortgage, also known as a construction-to-permanent loan, lets borrowers apply for a loan to have a home built for them using only a single application, loan approval, and closing date. HUD 4000.1 describes it as follows: “A Construction to Permanent Mortgage combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close Construction Loan Maximum Loan Amount Rules Maximum mortgage amounts for FHA One Time Close loans are determined “by using the appropriate purchase Loan-to- Value | more...

 
FHA One-Time Close Construction Loans: Down Payments and Interest Rates

FHA One-Time Close Construction Loans: Down Payments and Interest Rates

FHA One-Time Close construction loans have different requirements for down payments and interest rate issues can be more complex; many borrowers are interested in this home loan but aren’t clear on the finer points. Today we examine how down payment issues and interest rate rules apply to the FHA One-Time Close construction loan. The FHA loan handbook, HUD 4000.1 describes the One-Time Close loan, also known as an FHA construction-to-permanent mortgage, as a loan that “…combines the features of a construction loan (a short-term interim loan for financing the cost of construction) and the traditional long- term permanent residential Mortgage with a single mortgage closing prior to the start of construction”. FHA One-Time Close Construction Loan Down Payment Rules HUD 4000.1 allows for some unique down payment sources that don’t | more...

 
FHA Home Loan Options: Build, Buy, Or Rehab

FHA Loan Options For New Construction Homes: FHA One-Time Close Mortgages And More

FHA loan options for buying new construction homes include the FHA One-Time Close Construction Mortgage, which allows a borrower to apply once and have a single closing date for a house built from the ground up. FHA One-Time Close mortgages differ from other construction loans because this type of construction loan eliminates the two-step construction loan application process where the borrower applies once for the costs of construction, and has a closing date for that loan, then applies a second time for the mortgage on the property itself. It’s definitely an advantage to have a single application and closing date. But what are the other options to compare this type of loan to? It’s good to know what you can get from multiple options-making an informed choice to build a | more...

 
FHA One-Time Close Requirements: Appraisals

FHA One-Time Close Requirements: Appraisals

FHA One-Time Close construction loans feature a single loan application and closing date for both the construction phase of the loan and the “permanent” portion of the loan. Like other FHA mortgages, an appraisal is required on the property to be secured by the mortgage. In general, FHA loan appraisal requirements include the following guidelines on the timing, as found in HUD 4000.1, the FHA loan handbook: “The effective date of the appraisal cannot be before the FHA case number assignment date unless the Mortgagee certifies that the appraisal was ordered for conventional lending or government-guaranteed loan purposes and was performed pursuant to FHA guidelines.” While this may not normally be an issue for construction loans given the timing of the appraisal, another portion of the same section of the | more...

 
FHA-to-FHA Refinance Loan Rules

What Is The Difference Between New Construction And Existing Construction?

What is the difference between new Construction and existing construction? For the purpose of an FHA home loan, the distinction can be important, even if it’s just on a procedural level. The FHA loan handbook (HUD 4000.1) makes important distinctions between new construction and existing construction loans. FHA Home Loans For Existing Construction Properties The FHA defines existing construction properties in a very specific way: “Existing Construction refers to a Property that has been 100 percent complete for over one year or has been completed for less than one year and was previously occupied.” The appraisal requirements for existing construction are not quite the same (in terms of timing, paperwork and required forms) but the issue that will most affect a typical borrower is in how the appraisal is to | more...