FHA Loans

 

203(b) Mortgage Insurance

What is the purpose of this program?

To provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD.

What are the eligibility requirements?

• The borrower must meet standard FHA credit qualifications.
• The borrower is eligible for approximately 96.5% financing. The borrower is able to finance the upfront mortgage insurance premium into the mortgage. The borrower will also be responsible for paying an annual premium.
• Eligible properties are one-to-four unit structures.
• FHA requires a 3.5% downpayment.
• The seller can contribute up to 6% of the sales price towards the buyer’s closing costs
• FHA requires Mortgage Insurance Premium (MIP) for all loans
• As of October 4, 2010, the up front premium is 1% and it can be financed.
• Borrowers with a credit score of 580 are eligible for maximum financing
• Borrowers with a credit score between 500-579 are limited to 90% LTV (loan to value), meaning a 10% downpayment is required
• Borrowers with a credit score below 500 are not eligible for FHA insured mortgage financing. You are a renter!

203k Rehabilitation Mortgage Insurance

FHA’s Streamline 203(k) Mortgage

The “Streamline”(K) Limited Repair Program permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

FHA’s 203(k) Mortgage

The Section 203(k) program is HUD’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities.