| What is a 203(b) loan? |
| This is the most commonly used FHA
program. It offers a low down payment, flexible qualifying guidelines,
limited lender's fees, and a maximum loan amount. |
| What is a 203(k) loan? |
This is a loan that enables the
homebuyer to finance both the purchase and rehabilitation of a home
through a single mortgage. A portion of the loan is used to pay off the
seller's existing mortgage and the remainder is placed in an escrow
account and released as rehabilitation is completed. Basic guidelines for
203(k) loans are as follows:
- The home must be at least one year old.
- The cost of rehabilitation must be at least $5,000, but the total
property value-including the cost of repairs-must fall within the FHA
maximum mortgage limit.
- The 203(k) loan must follow many of the 203(b) eligibility
requirements.
- Talk to your lender about specific improvement, energy efficiency,
and structural guidelines.
|
| What is an energy efficient
mortgage (EEM)? |
The Energy Efficient Mortgage allows a
homebuyer to save future money on utility bills. This is done by financing
the cost of adding energy-efficiency features to a new or existing home as
part of an
FHA-insured home purchase. The EEM can be used with both 203(b) and 203(k)
loans. Basic guidelines for EEMs are as follows:
The cost of improvements must be determined by a Home Energy Rating System
or by an energy consultant. This cost must be less than the anticipated
savings from the improvements. One- and two-unit new or existing homes are
eligible; condos are not. The improvements financed may be 5% of property
value or $4,000, whichever is greater. The total must fall within the FHA
loan limit. |
| What is the FHA bridal registry
program? |
| Just as you might register at a
department store for wedding gifts, the Bridal Registry program allows
couples to register with a lender and open up an interest-bearing account.
Family and friends can deposit wedding gifts of cash into this account.
These gifts can then be applied toward a down payment on a home. Ask your
lender for details. |
| What is a title I loan? |
| Given by a lender and insured by the
FHA, a Title I loan is used to make non-luxury renovations and repairs to
a home. It offers a manageable interest rate and repayment schedule. Loans
are limited to between $5,000 and $20,000. If the loan amount is under
$7,500, no lien is required against your home. Ask your lender for
details. |
| What other loan products or
programs does the FHA offer? |
| The FHA also insures loans for the
purchase or rehabilitation of manufactured housing, condominiums, and
cooperatives. It also has special programs for urban areas, disaster
victims, and members of the armed forces. Insurance for ARMs is also
available from the FHA. |
| How can I obtain an FHA-insured
loan? |
| Contact any lender such as a
participating mortgage company, bank, savings and loan association, or
thrift. |
