Buyers searching for a home anywhere in Texas, often have a specific list of wants and needs for their future home. It isn’t always easy to find everything on your list in a home that is on the market and compromises need to be made. One alternative is purchasing a home that meets most of your needs and renovating the home to add the remaining features. This options allows a buyer to turn essentially any home into the home of their dreams. The FHA 203k loan makes these types of projects easier than ever. Vince Gutierrez Mortgage offer great rates and terms on FHA 203k loans throughout Spring and all of Texas.
With a FHA 203k loan, a borrower can combine both the purchase of a home as well as the costs of repairs or renovations into a single mortgage. FHA 203k loans are backed by the Federal Housing Administration which allows borrowers to qualify with low down payments and less than ideal credit. Renovation and remodeling projects tend to be less intimidating when the purchase of a home and the cost of updates can be rolled into a single mortgage. Less money is required up front with low down payment options and buyers save on closing costs when only one loan is needed.
There are two types of FHA 203k home loans available anywhere in Texas depending on the size of the project.
FHA Standard 203k – Complex renovations that involve structural work, remodeling, or construction that prevents the buyer from occupying the home during renovations will require a standard FHA 203k loan. A minimum of $5,000 in renovation costs are required for the standard 203k.
FHA Streamlined 203k –Smaller projects that will not exceed a total of $35,000 will utilize the Streamlined FHA 203k. This option is used for smaller updates or additions that might include adding new appliances, new roofing, energy conservation improvements, and making other non-structural repairs.
FHA 203k loans are often favored over similar programs due to their relaxed credit and low down payment requirements. In most cases, a credit score of 580 and a down payment of only 3.5 percent can allow a borrower to qualify. Down payments can even be gifted by family members.
Spring FHA 203k Loan Requirements
- Credit Score – 580 minimum.
- Income Requirements – A debt-to-income ratio of 43 percent or less is standard. Up to 50 percent can be approved in special cases.
- Down Payment – Minimum of 3.5 percent of the purchase price.
- Up-front Mortgage Insurance Premium (MIP) of 1.75% of the purchase price.
- Recurring MIP based on factors such as loan amount, LTV ratio, length of the mortgage.
FHA loan amounts are limited based on the county where the home being purchased is located. In the case of the FHA 203k loan, this is the combination of the home price and estimated repairs.
If you are like many buyers searching for a home anywhere in Texas, you may be struggling to find everything you need in a home. By taking advantage of an FHA 203k loan, Vince Gutierrez Mortgage can help you turn any home into your dream home. Contact us today for more information on Spring FHA 203k loans or to begin the pre-qualification process!