FHA 203k Loans: Popular In Arizona

FHA 203k Loans: Popular In Arizona

The FHA 203k mortgage program has become in demand with the recession in the housing market. When a property is owned by the financial institution, chances are that the property may be in need of a little work and the FHA 203k loan is a great option. Some of the frequently asked questions we see about the FHA 203k mortgage program include:

  • What is the Arizona FHA 203K mortgage?
  • How much do you write the contract for a FHA 203k sales contract?
  • Is it easier or harder to qualify for an FHA 203k loan vs. a regular FHA loan?

What is the Arizona FHA 203k mortgage?

The FHA 203k mortgage program in Arizona is a restoration loan that works much like a development loan. The one who is buying the home is able to pay for a home that is in need of repairs and is able to finance the repair work in the mortgage to correct items in the house. The FHA 203k consists of the purchase price of the home plus the construction costs for the work to be performed after close.

An Example Scenario:

$100,000 purchase price of home
$20,000 Repairs Needed (see a list of the most common FHA 203k repairs)
$120,000 Total Loan Amount

How much do you write the contract for a FHA 203k sales contract?

The offer is the purchase price of the dwelling only. You don’t need to include the cost of repairs anywhere in the sales contract or offer. In the above example, the purchase price on the sales contract or offer would be $100,000.

Is it easier or harder to qualify for an FHA 203k loan vs. a regular FHA loan?

The requirements to qualify are the same as a traditional FHA loan. What does it take to qualify for an FHA loan? Generally speaking, a credit score above 620, a good job and a down payment of 3.5%. Of course there are more details to being qualified, but those are the general highlights.

How do I go about finding the right contractor for the work?

It is advised that you work with a general contractor that can perform all needed repair work. Your loan officer can easily help recommend one – they should know at least one good contractor. It is also imperative that the contractor be practiced in FHA guidelines so that they can include any FHA required items in their contract.

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.