Qualifying for an FHA Construction Loan

If you are looking for a construction loan, you should keep in mind that the government has programs to help buyers with less than perfect credit histories. There are even programs like the FHA loan program that help people to buy and repair existing structures. PaydayLoansCashAdvance.com has gathered the following information regarding the FHA Construction Loans to assist you.

The Federal Housing Administration

The Federal Housing Administration or FHA is the government run program that helps people to buy homes. They work with people who have poor to medium credit, people who have declared bankruptcies, and people who have experienced foreclosures. They also work with people who need help making a down payment. They have numerous programs that help people buy homes or restructure their loans as well as programs that help people who want to fix-up existing homes.

FHA Construction Loan

An FHA loan cannot be used by someone who wants to build a new home. Instead, an FHA construction must be used by people who want to fix-up an existing home. These loans are often combined with other rehabilitation loans and grants, and their purpose is to breathe new life into old and rundown neighborhoods.

When a consumer wants to buy a house that needs a lot of repairs, it can be hard to get financing. Most mortgage lenders will only give these buyers a mortgage if they have already been approved for a construction loan for the repairs. In order to get this financing, many consumers have to turn to private lenders with high interest rates. In contrast, an FHA construction loan allows the buyer to take out a single loan that allows them to purchase the property and do repairs. This saves the buyer money, and it helps them to get a home.

How to Qualify for a Construction Loan

FHA loans have been specially created for people with less than perfect credit histories. However, you still need to meet some guidelines in order to get approved. If you have a bankruptcy on your credit report, it needs to be at least two years old. It is also important that you have had good credit for at least two years since declaring bankruptcy. If you have a foreclosure on your record, it must be at least three years old, and you must have maintained a positive credit history for the three years after the foreclosure.

The FHA works with consumers who have lower credit scores. This means that they may be willing to give you a construction loan when you may not normally qualify for one. To work with the FHA, you need to have a credit score that is at least 500. Each construction loan requires a small down payment, and the amount of the down payment depends on your credit score. If your score falls between 500 and 579, they request a ten percent down payment. If your score is higher than 580, they will only ask for a 3.5 percent down payment. There may be local programs that can help you cover the down payment.

In addition to look at your credit history, the FHA will also want to look at your current financial situation. They will want to know about your income and your debts. In most cases, they will not give you a loan if your monthly debt payments are more than 43 percent of your monthly income.

After you have qualified for a construction loan, you will need to ensure that your property qualifies as well. To determine if your property will qualify for an FHA construction loan, you may want to visit the HUD (Housing and Urban Development) website. There, you will find information about whether or not your home qualifies.

How to Apply for a Construction Loan

Applying for a construction loan is similar to get starteding for a regular mortgage. You will need to show proof of your income and your financial obligations just like you would when getting started for a regular mortgage. However, when getting started for a construction loan, you will need even more details. You will need to assess the property and determine how many repairs need to be done. Then, you will need to have an estimate for repairs will cost, and you will need to put together a proposal for the lender.

FHA loans are not actually given out by the government. Instead, they are given out by FHA approved lenders. Your FHA counselor can help you find an approved lender, or you may be able to find one by looking at their website. After you submit your form, the property will need to be appraised and the lender may even send someone to assess the repairs. The process is not that complicated, and your lender will guide you through most of the steps.

Construction loans can actually be used for more than just rehabilitation work. Once you qualify for your construction loan, you can use the money to rehabilitate your property, or you can move an existing structure to the land that you have purchased. Your lender may be able to discuss more ways that you can make your construction loan work for you.

The operator of this website is not a lender.
This site will share the form information provided by the consumer with one or more lenders.
This site can connect you with a cash advance lender based on your form and lender requirements.
Not all customers will be connected with a lender, and not all forms will be approved by a lender.
PaydayLoansCashAdvance cannot guarantee the amount of funds that may be extended if a lender approves the form.
*Not all lenders can provide up to $1,000. Consumer loan amounts vary bases on creditworthiness.
Lenders tend to provide upper range loan amounts to returning customers. Cash transfer time may vary between lenders.
Funds are not available until the next business day. Cash advances are not available in all states.
Lenders may undertake credit checks or otherwise verify the consumer’s social security number or other information.
If and when lenders preform credit checks they are ran via specialized credit bureaus.
Late payments of loans may result in additional fees or collection activities, or both.
Non-payment of credit could result in collection activities.
Each Lender has their own terms and conditions, please review their policies for further information.
Every Lender has its own renewal policy, which may differ from Lender to Lender. Please review your Lender's renewal policy.

Please refer to our Privacy Policy for important information on the use of cookies.
By continuing to use this website, you agree to the Notices and Disclosures and the Privacy Policy.

Copyright © 2014 PaydayLoansCashAdvance.com. All rights reserved.
3172 North Rainbow Boulevard #1212 Las Vegas NV 89108