Is This Your FHA Loan?
August 2, 2023
There are a few things more important than picking the right FHA home loan for your needs, but this issue should be at the top of your list in the planning and saving states for the loan. Why?
Because whether you need an FHA, VA, or conventional mortgage, there’s no one-size-fits-all loan. You might want to buy a mobile home, a condo unit, or you might want to build a house from the ground up on your own land.
Each of those purposes will feature unique requirements. For example, mobile homes and manufactured housing can’t be built earlier than June 15, 1976. There is no similar restriction on existing construction homes that are not manufactured housing.
A construction loan may require you to provide your own down payment in full. This is not necessarily true of existing construction loans.
Here are some examples of FHA mortgages you can choose from and the unique purposes each was designed to address. We can’t include them all here for space reasons, but some of the most important are listed below.
FHA 203(b) Purchase Loan
The mortgage everyone thinks of when buying a house with an FHA mortgage. The FHA 203(b) loan is your program if you want existing construction. These FHA loans can be used to buy a typical suburban home.
FHA 203(k) Rehabilitation Mortgages
If you want to buy a home that cannot pass an FHA appraisal, the rehab loan may be your FHA loan. You can choose between a limited version of this rehab loan for smaller projects and a larger version that permits work on load-bearing walls and other major construction.
FHA Reverse Mortgages
This is a way to refinance your home without getting saddled with a monthly mortgage payment. Reverse mortgages are for seniors aged 62 or older who own the home outright or are close to doing so.
The loan becomes due in full when the borrower dies or stops using the home as their primary residence. Reverse mortgages require housing counseling as a condition of loan approval.
FHA Cash-Out Refinancing
The FHA cash-out refinance option that allows you to pull equity from your home in cash. This type of refinancing requires you to have made on-time payments for your home loan in the last 12 months and the longer you have owned your property before applying for cash-out refinance funds, the better off you may be when it comes to the amount of cash you get from the transaction.
FHA Manufactured Home Loans
These mortgages are for you if you are looking at mobile homes, modular housing, manufactured homes, or similar variants. In typical cases, you must have the home delivered directly to the permanent site and placed atop an approved foundation if it is not on one already.
These properties must be taxable as real estate even if they are not classed as such in the state you are in. Mobile home loans can’t be used to buy property that doesn’t meet the criteria, such as RVs or houseboats.
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RELATED VIDEOS:
Disclosures Give Transparency to Borrowers
Understanding the Purpose of Your Mortgage Down Payment
Putting Money Into Your Escrow Account
Because whether you need an FHA, VA, or conventional mortgage, there’s no one-size-fits-all loan. You might want to buy a mobile home, a condo unit, or you might want to build a house from the ground up on your own land.
Each of those purposes will feature unique requirements. For example, mobile homes and manufactured housing can’t be built earlier than June 15, 1976. There is no similar restriction on existing construction homes that are not manufactured housing.
A construction loan may require you to provide your own down payment in full. This is not necessarily true of existing construction loans.
Here are some examples of FHA mortgages you can choose from and the unique purposes each was designed to address. We can’t include them all here for space reasons, but some of the most important are listed below.
FHA 203(b) Purchase Loan
The mortgage everyone thinks of when buying a house with an FHA mortgage. The FHA 203(b) loan is your program if you want existing construction. These FHA loans can be used to buy a typical suburban home.
FHA 203(k) Rehabilitation Mortgages
If you want to buy a home that cannot pass an FHA appraisal, the rehab loan may be your FHA loan. You can choose between a limited version of this rehab loan for smaller projects and a larger version that permits work on load-bearing walls and other major construction.
FHA Reverse Mortgages
This is a way to refinance your home without getting saddled with a monthly mortgage payment. Reverse mortgages are for seniors aged 62 or older who own the home outright or are close to doing so.
The loan becomes due in full when the borrower dies or stops using the home as their primary residence. Reverse mortgages require housing counseling as a condition of loan approval.
FHA Cash-Out Refinancing
The FHA cash-out refinance option that allows you to pull equity from your home in cash. This type of refinancing requires you to have made on-time payments for your home loan in the last 12 months and the longer you have owned your property before applying for cash-out refinance funds, the better off you may be when it comes to the amount of cash you get from the transaction.
FHA Manufactured Home Loans
These mortgages are for you if you are looking at mobile homes, modular housing, manufactured homes, or similar variants. In typical cases, you must have the home delivered directly to the permanent site and placed atop an approved foundation if it is not on one already.
These properties must be taxable as real estate even if they are not classed as such in the state you are in. Mobile home loans can’t be used to buy property that doesn’t meet the criteria, such as RVs or houseboats.
------------------------------
RELATED VIDEOS:
Disclosures Give Transparency to Borrowers
Understanding the Purpose of Your Mortgage Down Payment
Putting Money Into Your Escrow Account
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