February 19, 2018

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Articles in Category: FHA One-Time Close

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...

 
Things you should know about FHA home loans

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...

 
FHA Construction To Permanent Loan 2018

FHA Construction To Permanent Loan 2018

FHA construction To Permanent loans in 2018 are a great option for those who want to buy a home but aren’t interested in purchasing existing construction properties. If having a home built for you sounds better than buying one that already exists, the FHA Construction-To-Permanent loan, also known as an FHA One-Time-Close loan, might be right for you. FHA Construction To Permanent Loan Requirements The basic credit qualifying guidelines for FHA One-Time Close mortgages may vary more among participating FHA lenders. You may find a minimum FICO score requirement of 620 or higher depending on the lender, and in some cases you may learn that a lender has a minimum FICO score benchmark of 660 or better and that two FICO scores may be required. Credit requirements can be higher | more...

 
How Do You Get A One-Time Close FHA Construction Loan?

How Do You Get A One-Time Close FHA Construction Loan?

How do you get an FHA construction loan? If you want to have a new home built from the ground up (as opposed to buying an “existing construction” home that already exists), an FHA new construction loan is possible. The FHA One-Time Close construction loan makes it much easier with a single application and closing for the entire project. Other types of construction loans feature TWO closing dates and a more complex process. FHA One-Time Close mortgages simplify the construction loan by wrapping the entire loan process up with a single application and loan approval. Not all FHA lenders offer construction loans, so you’ll need to shop around to find the right lender for your needs. There are two basic types of FHA construction loans-a “traditional” construction loan, and an | more...

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

FHA One-Time Close Construction Loan Rules: Utilities

FHA loan rules for One-Time Close construction loans include a set of requirements the finished property, which must meet both state/local building code and FHA loan minimum property standards. Those FHA standards include a set of requirements for access, utilities, and water quality which must be met as a condition of loan approval. It’s surprising to some FHA loan applicants that certain features of a new construction home are A) regulated and/or B) allow things like septic tanks or wells. But not all properties are the same, and some construction issues are present in some housing markets that aren’t a consideration elsewhere. Well water is a great example. When a resident of a large metropolitan areas thinks of a new construction home, it’s likely that issues surrounding wells and well | more...

 
What Are FHA Rehab Loans?

FHA Construction Loan 2017

There is still time to consider an FHA construction loan in 2017. Those who are more interested in having a brand-new home built especially for them rather than purchasing an existing construction home with an FHA mortgage will be pleasantly surprised at the options available to them. FHA construction loans are different than other types of FHA mortgages and can be a bit more complex, but thanks to the FHA One-Time Close construction loan this process isn’t as complicated as other types of construction loans. Why? A Single Application and Closing Date For FHA One-Time Close Construction Loans The FHA One-Time Close construction loan is referred to in the FHA loan handbook, HUD 4000.1, as a “construction-to-permanent” mortgage. Some construction loans require the borrower to qualify twice; once to pay | more...