HomeGain on Facebook HomeGain on Twitter HomeGain on LinkedIn HomeGain on YouTube

are there speciale/different loan limits for fha 203k?

taking into account the funds for the repairs plus the loan for the actual property. trying to decide between 203k and construction
By 21swizel7863142 from MD Nov 13th 2014
Powered by:

If you have sufficient downpayment and credit for a construction loan, that will typically be a less expensive option. Many of the fees between the loans are comparable, and they may be labeled differently, but it will come out to about the same. The real difference is with the FHA MIP. There is a one time fee equal to 1.75% of the loan amount. It is financed into the loan, but it is a cost. Also, monthly mortgage insurance is paid at a rate of 1.35%/year. A good credit buyer putting 10% down can do much better than that. However, if you don't have much money to put down or have credit challenges, the FHA 203k is a great option. Many buyers end up refinancing out of the 203k because they have built so much equity.

Nov 13th 2014

Searching Today's Rates...

If you are doing under $30000 in repairs and don't have the large down FHA 203k may be a great option. FHA is reducing the MIP to .85% from the high 1.75 on January 26th. Construction loans are conforming loans - typically need 20% down owner occupied with good credit. I do have construction loans also for investors but the terms are different. I even have a construction loan for an owner builder. Frankly if you are far away I would get a local partner to help you. Construction loans are NOT something I would suggest to apply online. The Borrower and builder typically have to qualify and there is more paperwork. Being able to go in person when you need to explain a draw is a benefit.

Jan 22nd 2015


HomeGain offers free real estate tools and services to compare real estate agents, research home prices, and view homes for sale, foreclosures, new homes, and rentals. HomeGain provides real estate information including articles on home buying, home selling, and mortgage rates. HomeGain's quarterly home values surveys are a hit with the top media sources, realtors, and home buyers and sellers. Did you know, HomeGain pioneered the original online home value estimates tool back in 1999?