FHA 203k loans are federal government-insured mortgage that offers the borrower to grant a loan for two reasons: home purchase and home renovation. 203(k) loan is considered for rehabilitation or to repair a home for a low-to-moderate-income buyer which will become the mortgagor’s primary residence. It allows getting a home in both fixed-rate mortgage or adjustable-rate mortgage. The borrowed amount consists of the purchase price of the home and renovation cost including labor and material.
The Lowdown on 203K Loans...
How do FHA 203k loans work?
Two types of FHA 203k loan, the limited (streamline) and the standard. Both loans have refinanced options for the current homeowners. Each 203k loan has a different about how much can be borrowed for renovations, and what can be done with that money.
- 203(k) limited loan: Major structural repairs are not eligible. For renovations, it provides up to $35,000.
- 203(k) standard loan: Major structural repairs are eligible. And renovations must need to cost at least $5000, To oversee the renovation process in 203(k) standard loan, you must hire a HUD consultant.
Luxurious renovations are not covered under the FHA 203k loans in Texas.
Why 203k loans?
The main advantage of FHA 203k loans is that you can purchase a home and get funds to fix it up. With the help of these loans, you could renovate your dream home. It offers a 3.5% low downpayment and has easier requirements for credit scores with decent interest rates.
Do I Qualify?
It is vital to understand what you will need to qualify for 203k loans. Your purpose needs to meet the guidelines of these loans.
- At least a 500 credit score is required
- Low down payment
- The loan amount depends on the area you live
How do I apply for FHA 203(k) loans?
If you want to apply for FHA 203(k) loans, first you need to find an FHA-approved lender and provide them with your details and documents of income, debt, and credit score. By considering your credit score, choose the 203k loan lender in San Antonio as some lends loans with low credit score and some in high if you are first-time buyers.
We are here to make it easier for you and guide you starting from a FREE 203K Loan Qualifier, where you can check for your qualification. We will guide you and provide all the details for choosing the right loan programs.