The short answer to the question, “What does the FHA have to do with Renovation Loans?” is, “everything”. If the Federal Housing Administration or FHA was a tree, the 203k Loan would be one of its branches. Simply put, the FHA is a mortgage insurer. The administration was created amidst the high number of foreclosures and defaults during the Great Depression. They served to encourage banks through incentives to give home loans to low-medium income families, first time homebuyers or those with a low credit score. The result was a stimulated economy and more American homeowners. Today we see the FHA loan products acting in the same way; many first-time homebuyers find themselves interested in the FHA loan because of the low down payment requirement as well as the reasons just mentioned.
This administration was the creator of the 203k Loan. The idea behind the creation of this product was to give first time homebuyers that ability to purchase and repair a damaged home. You see, to qualify for a standard FHA mortgage, the property must meet minimum property standards prior to closing on the loan; however, with the FHA 203k, the minimum property standards do not need to be met at closing. This loan program has certainly benefited more than first time homebuyers throughout its existence, which began in the 1960’s. The benefits of the FHA 203k Loan extend past the individuals purchasing the home; this loan program can also contribute to neighborhood revitalization. The permissive qualifications for the loan product provide more individuals an opportunity to qualify and the very essence of the loan encourages them to repair a home, benefiting the community that surrounds them.
While there is a focus on first time homebuyers or individuals who may not qualify for other home loans, the FHA 203k extends its reach to many home buyers/owners with a variety of backgrounds. This loan can be used to simply change out your kitchen cabinets, through a refinance. Or it could be used to add on a second living area. Or if you are shopping for a home but can’t find one you like, you can use the 203k Loan to purchase a home and update it to your tastes! Our 203k Loan specialists would love to speak with you about the amazing things this loan program can do for you and your family, call us at 1-888-914-2276 or visit us at www.smcapproved.com
Conventional Loans Aren’t Just for Our Parents; A message to millennials from a millennial Generation gaps were first brought to light in the 1960’s. These generation gaps can make it difficult for even those in the same family to understand each other. Take for example, millennials waiting to start families, whereas their parents were married, […]
Mortgage interest rates have been at historic lows, causing many to look into a refinance of their mortgage, and given the recent market conditions we cannot be certain how long this trend will continue. If you would like more information on why we have seen shifting interest rates, check out this related blog post. There […]
Private Mortgage Insurance (PMI) lowers the risk to the lender, should you default on your mortgage payments. Please note that PMI does not benefit you, the borrower, but instead protects the lender with whom you are getting the mortgage. PMI is often required with loans that carry a lower down payment. In fact, because of […]
October is Fire Prevention Month. According to NFPA (National Fire Prevention Association), the winter months see an increase in fires along with deaths and injuries that are results of the fires. These fires can begin anywhere in the home, in the kitchen, in the furnace room or even in the bathroom. However, there are steps […]
Owning a home is something to celebrate! You worked hard to afford it, had patience throughout the buying process and now you have a place to make your own. However, owning a home also means that emergencies may happen, and you should know how to handle them when they arise. Here are a few […]