Articles Tagged With: FHA 203b Mortgage

Build on your own lot. Construction loan basics

July 30, 2026

Build A House On Your Own Land With An FHA Mortgage

Some house hunters eventually stop looking at existing homes and start thinking about building one from the ground up. Others know from the beginning of their homeownership search that they want to build rather than buy. FHA loan rules include guidelines for lenders who want to help these borrowers get financing. The section of the rulebook covering this option is titled “Building on Own Land,” and it tells lenders how to proceed with this type of loan, including maximum loan amounts, who can act as the general contractor, and other requirements borrowers should know about before they start planning. Are you interested in having a house built for you on land you already own, rather than choosing from existing construction? Building on your own land may be the right move, | more...

July 15, 2026

FHA Loans: New Construction Vs. Existing Construction?

By Bruce Reichstein

What is the real difference between new construction and existing construction on an FHA loan? The distinction affects which appraisal rules apply, what paperwork a lender needs, and how much protection a borrower gets before closing. FHA loan guidelines draw a clear line between the two categories, and knowing where a property falls can help buyers set the right expectations from the start. Existing Construction A property counts as existing construction once it has been fully finished for over a year, or finished for less than a year but already lived in at some point. The appraisal process for existing homes differs somewhat in timing, paperwork, and required forms, but the detail that matters most to a typical borrower is what the appraisal is not meant to do. An FHA | more...

April 1, 2026

FHA Loan Options Are Available to Homebuyers?

By Bruce Reichstein

FHA loans remain one of the most popular mortgage options for homebuyers because they offer flexible qualification requirements and low down payment options. Many borrowers know about FHA purchase loans, but fewer realize that the Federal Housing Administration insures several different mortgage programs designed for a variety of financial situations. Whether you’re buying your first home, refinancing an existing mortgage, renovating a property, or accessing home equity, there may be an FHA loan option that meets your needs. Why Do Borrowers Choose FHA Loans? Many borrowers choose FHA financing because qualification requirements are often more flexible than those associated with some conventional loan programs. FHA loans also permit a down payment as low as 3.5% for borrowers who meet program requirements. Another advantage is that FHA allows borrowers to use | more...

FHA Construction Loan Rule Changes In 2021

December 30, 2025

VA One-Time Close Construction Loans For Veterans in 2026

By Bruce Reichstein

What Is a VA One-Time Close Construction Loan? A VA One-Time Close (OTC) construction loan is a mortgage that finances both the construction of a home and the permanent VA loan in a single closing. Eligible veterans and active-duty service members can build a home with zero down payment, no monthly mortgage insurance, and one set of closing costs. Can Veterans Build a Home with a VA Loan? Yes. Veterans and active-duty military members can use a VA One-Time Close construction loan to build a new home instead of buying an existing one, as long as they meet VA eligibility and lender requirements and use a VA-approved builder. VA One-Time Close vs FHA One-Time Close VA One-Time Close / 0% down payment with full entitlement / No monthly mortgage insurance | more...

July 17, 2025

Buy Your First Home With An FHA Mortgage

By Joe Wallace

Do you want to purchase your first home? Borrowers looking for a starter home often turn to the FHA loan program because of its low 3.5% down payment requirement for borrowers with qualifying FICO scores. And thanks to protections for the borrower such as no penalty for early payoff of the loan and the ability to refinance the FHA mortgage into a new FHA loan that can result in a lower mortgage rate or monthly payment when using an FHA Streamline Refinance loan. Qualify For An FHA Mortgage What do you need to qualify for an FHA loan? For best results, at least two years in the job market and FICO scores that are in the 600s or better. FHA loan rules say you can technically qualify for an FHA | more...

June 17, 2025

FHA Loan Rules: How Inducement To Purchase Rules Affect Your Loan

By Joe Wallace

Do you know how FHA loan rules for inducement to purchase can affect your FHA loan transaction? We often discuss the basics about FHA home loan requirements, and especially in the area of seller rights and responsibilities, but there are other issues associated with inducements to purchase you should know about aside from the obvious issues. What kind of requirements? Many know that sellers may contribute up to six percent of the sale price of the home toward the borrower’s closing costs. But the FHA’s six percent rule (no interested party contributions above six percent of the sale price of the home without a corresponding reduction in the home loan amount) is just one factor. There are other inducements to purchase that can also result in a reduction of the | more...

April 30, 2025

What To Know About FHA Home Loan Down Payments

By Bruce Reichstein

Most home buyers will make some form of down payment, except those using VA mortgages with no money down for qualifying servicemembers, veterans, and surviving spouses. Did you know it’s best to start saving for your down payment at least a year ahead of time? There are also no-money-down USDA loans, which are need-based and have income caps. By comparison, FHA mortgages, with their low 3.5% down payment requirements, are attractive to many house hunters who want to save more money upfront on the mortgage. Do You Really Have To Put 20% Down? Some borrowers may hear stories of borrowers being required to pay 20% down. This would be true in cases where the home buyer wants to avoid mortgage insurance on a conventional mortgage. And while that is not | more...

March 27, 2025

Why You Should Monitor Your Credit As A First-Time Home Buyer

By Joe Wallace

Are you a first-time home buyer interested in buying or building a home? New borrowers should monitor their credit for signs of identity theft, erroneous information, and outdated credit data; doing so improves your chances at home loan approval by ruling out issues that may be related to credit report problems that are not your fault. In 2025, monitoring these issues is more critical than ever. Some future homeowners already pay strict attention to their credit, but not everyone does. And they should–credit monitoring should play a crucial part of your preparation stages before applying for an FHA mortgage. The principles we discuss here can protect you when applying for any big loan, including cash-out refinancing. Regular Monitoring Eliminates Surprises Later Regular updates about your credit report reduce the chances | more...

February 28, 2025

What Kind Of House Can I Buy With An FHA Mortgage?

By Joe Wallace

What kinds of homes can be purchased with an FHA mortgage loan? You can build a home from scratch using an FHA Construction mortgage, but may people want to buy existing property and what kinds. Eligible Property Types For FHA Mortgages FHA loan rules in HUD 4000.1 state clearly that certain kinds of property are permitted and certain kinds are not. These rules on eligible property types that can be purchased with an FHA mortgage loan are found in HUD 4000.1, and include the following guidance you should know: FHA programs “differ from one another primarily in terms of what types of Properties and financing are eligible. Except as otherwise stated in this SF Handbook, FHAs Single Family programs are limited to one- to four-family Properties that are owner-occupied Principal | more...

January 14, 2025

What Can Kill An FHA Home Loan?

By Bruce Reichstein

Those who want a home loan have to prepare for the new loan application in several ways–financially, through saving up for the down payment and closing costs, and with credit prep. That can mean working on your record of on-time payments, lowering your overall debt amounts, and avoiding new credit in the meantime. When applying for any large line of credit, there are some things that can stop your loan dead in its tracks. If you want a home loan and are worried about being approved for a home loan, add these issues to your mental not-to-do checklist and make sure you know how to avoid them. Avoid New Debt Your lender pulls your credit when you apply for your home loan–most people know that. But not as many know | more...