What Are FHA Rehab Loans?There are several types of FHA loans that can be acquired by a new home buyer. One such loan is call an FHA 203k loan. These FHA rehab loans are for people who want to buy a home that needs to be fixed up. Most of the time, the buyer will have to purchase a house without a secured permanent mortgage, then bring the home up to code with more of their money, and then finally securing a mortgage to pay off the money they spent on fixing up the home. That is where the FHA rehab loans will benefit the buyer. The FHA rehab loans allow the buyer to get one loan from a lender. The loan money would consist of monies to purchase the home along with monies to fix up the house. The loan does not become a secured loan until the rehabilitation process is done but it is still all the same loan. The eligible properties for the FHA rehab loans are single family dwellings, condominiums, townhouses, mixed use dwellings such as homes that are attached to mini stores, one to four unit buildings and you can increase or decrease the number of units with the FHA rehab loans as well. The types of FHA rehab loans are 30 to 15 year fixed rate FHA rehab loans and one year ARMS which are adjustable rate mortgages. The eligible borrowers for the FHA rehab loans are owner occupants for purchase or refinance and non-profit organizations. Investors are not allowed to qualify for FHA rehab loans because they are making a profit and reselling the dwelling. The FHA rehab loans can be used to purchase a dwelling and the land that the dwelling sit on in order to rehabilitate it, to purchase a dwelling from another site and place it on the mortgaged property in order to rehabilitate it, and to refinance an existing debt and to rehabilitate the dwelling. The FHA rehab loans can be used for condominiums which a lot of people probably never knew but there are conditions that come with the FHA rehab loans. The FHA rehab loan can only be for the owner/occupant or non-profit qualified borrowers only, the rehabilitation is only for the interior of the units, only five units per condominium can be rehabilitated at one time, and each condominium can only have four units. The FHA rehab loans can also be used for home improvements which usually has a $5000.00 minimum requirement. The improvements under this FHA rehab loans standards are structural alterations, improved functions such as remodeled bathrooms, elimination of possible health hazards, replacement of old plumbing, and installation of well or septic tank along with several other improvements that qualify for the FHA rehab loans. |