FHA Construction Loans
People looking for home construction loans buy a fixer-upper home and renovate it or build a new home from scratch. FHA home loans are among the best due to their relative leniency. This is because FHA construction loan requirements include low credit and down payments compared to conventional loans, making it easy for borrowers to get their desired loan amount.
FHA Construction Loans
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What is an FHA Construction Loan?
- A minimum middle-FICO score of 620 is required for all applicants. A higher FICO score may be required depending upon the type of property;
- A maximum Loan-to-Value (LTV) of 96.5% based on the total acquisition cost of the land and home;
- The property must be a single-family residence and owner-occupied. Second-home and investment properties are not allowed;
- The loan is made straight to the borrower;
- A twelve-month build time from the date of closing as well as funding;
- The borrower is going to receive a monthly statement for temporary financing based upon the amount of money dispersed thru the draw measure to the builder.
- The land owned by the borrower must be seasoned for 12 months to receive full appraised value. If the borrower held the lot for less than 12 months, the cost of acquisition would be used or the lesser of the appraised value vs. the cost of acquisition;
- A gifted land is allowed, certain restrictions will apply;
- Combining pool construction with home construction is allowed, certain restrictions will apply.
How To Get Construction Loan
FHA 203(K) Loan
There are generally two types of FHA 203k loans – the Streamlined 203k mortgage and the Standard 203k loan, respectively. A streamlined 203k loan also known as “Limited 203k” has a more straightforward and quick process and is reserved for homes that require cosmetic repairs like flooring. Homebuyers and homeowners can finance up to $35,000 into their mortgage to repair, improve, or upgrade their homes. The cost of the rehabilitation must be at least $5,000. The other type of 203k loan is the standard 203k loan or “Full 203k loan. This type of loan is meant for properties that require more extensive repairs or renovations such as foundation and plumbing repairs. The standard or full 203k is not capped at $35,000 and used if the home is uninhabitable for any reason at any time.
An FHA Loan Specialist Ready To Help You
Our FHA Loan Specialists are always available to help you and answer any questions. You may contact a dedicated FHA Loan Specialist through our website or by calling us directly. You may also chat with us to get a quick answer to your questions.
We Make The FHA Loan Process Quick & Easy
Lenders often times will steer their clients away from an FHA loan due to their inexperience with the program. FHA Loans are a great source of funding for our clients. We share our knowledge and experience with FHA loans, making it easier for borrowers.
FHA Approved Lender
The Federal Housing Administration requires lenders offering FHA loans to go through an extensive approval process. We are FHA-approved and designated as a “Full Eagle” FHA mortgage lender offering FHA-insured home loans in Texas.