FHA Home Improvement Loans

Rehab Loan Options. 203kex6

Low-interest FHA home improvement loans can help borrowers make a house a home and increase resale value. The Federal Housing Administration, or FHA, guarantees loans for first-time or low-income buyers who cannot meet stringent prime lending qualifications. The Federal Housing Administration does not actually loan money, but it satisfies claims filed by FHA-approved lenders who loan money to high-risk borrowers in the event of default or foreclosure. And because of the relative low risk involved in financing Federal Housing Administration borrowers, lenders can be pretty liberal with relaxed terms. Consumers that would normally have to pay high interest rates to hard money and sub-prime lenders because of a low credit score or insufficient down payment, can usually qualify for FHA-backed financing. FHA loans were first legislated in the 1930s during the Depression Era to relieve lenders of the crushing financial burden caused by defaults and foreclosures spawned by the stock market crash of '29. The Federal Housing Administration not only gave lenders an incentive to lend to families with less than perfect credit at little risk; but it also provided a means of helping low-income families realize the Great American Dream of home ownership. Decades later, FHA home improvement loans were added to help rebuild properties and communities. As the saying goes, "History repeats itself;" and in 2007, once again the Federal Housing Administration modified lending programs to help homeowners who became victims of the sub-prime lender/housing market slump.

Easily acquired, FHA home improvement financing is not contingent upon credit checks. Some specialized programs, such as neighborhood revitalization, allow teachers, firemen, and civil servants to purchase homes in substandard areas for as little as $100 down! Other borrowers may be required to pay a 3 to 3.5% down payment, a far cry from the average 8% to 25% upfront sums required by conventional and hard money lenders. Extending federally-insured loans to help low-income families not only boosts the economy, but is also Biblically sound. "If there be among you a poor man of one of thy brethren within any of thy gates in thy land which the Lord thy God giveth thee, thou shalt not harden thine heart, nor shut thine hand from thy poor brother: But thou shalt open thine hand wide unto him, and shalt surely lend him sufficient for his need, in that which he wanteth" (Deuteronomy 15:7-8).

Fewer FHA Loans Going Bad - Encouraging news

2011-03-24 10:55:36 by EricAZ

The serious delinquency rate of mortgages insured by the Federal Housing Administration went down from 8.9 percent a year ago to 8.29 percent the first quarter of this year.
Some mortgage experts have worried about more FHA home loans becoming delinquent after FHA loan originations exploded in recent years, in a way replacing the subprime loans offered during the run up in housing prices. However, the latest delinquency figures indicate the FHA is through its worst period and problem is under control.
As subprime loans disappeared and lenders tightened their mortgage requirements following the financial crisis, FHA loans, which are insured by the agency but made through private FHA-approved lenders, have become the only option for many borrowers with imperfect credit,...

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Out with the old, in with the new  — Housing Wire
This financing option is an FHA 203(k) “Home Improvement” loan. In my experience, most of the borrowers we speak to do not fully understand how they can benefit from these types of loans.

Amendments to FHA Title I property improvement and manufactured home loans: Final rule (Special management bulletin)
Book (United States League of Savings Institutions)

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  • Avatar koolkat Any way to refinance an FHA mortgage and FHA home improvement loan into 1 when underwater?
    Dec 14, 2012 by koolkat | Posted in Renting & Real Estate

    I have an FHA mortgage and FHA home improvement loan. An appraisal that was done prior to some property improvements came in $7 under the payoff of the first mortgage. I have never made a late payment and my credit score was 720 last I checked. My debt to income ratio is also good. Appraiser said poor home sales over the previous 12 months negatively affected my homes value. I would like to refinance both loans into one at a lower interest rate. I m not in a bind financially and I don t plan on trying to sell my property. My current interest rates are 5.5% on the first mortgage and 7% on …

    • This may fall under the government s HARP (Home Affordable Refinance Program) guidelines. It is not the government but it allows lenders to refinance a home that us underwater by whatever amount to the current rates . The 2 sources below have info on it. Some people have complaint that is takes 90 days. I would apply at 2 or 3 places to make sure you get it done.