FHA construction loan can be your way into owning your very own home. The Federal Housing Administration (FHA) backs all FHA construction loans and this makes it easier for us to own homes. Before the COVID-19 pandemic, the minimum credit score requirement is pegged at 580 and the acceptable down payment is 10% but in the light of the current situation, lenders have changed their minimum requirements so to get an updated one best to consult your loan officer. FHA construction to permanent loan Industry experts usually call this as a construction-to-perm-loans. This kind of FHA loan is an all-in loan as you can charge everything you need from buying your land to building your house and including the fees that your lenders may charge you into just one loan. How do FHA construction loans work? The first thing that you need to do is to select the land where you want to build your home. If you are planning to take out an FHA construction loan, remember that properties near gas or oil well, lands that are susceptible to flooding, and properties near airports will not be approved. The next thing you need to do is to get a preapproval. If you have reached a credit score of at least 580, again, talk to a loan officer for the updated COVID-19 rate, and if your debt-to-income ratio is no more than 43% then you will have better chances of getting a preapproval. Some of the things that you need to qualify would be a 3.5% down payment for a HUD-approved project and if it is not HUD-approved then a minimum of 10% down payment would be needed. Make sure that you are well within the FHA loan limits. You would need to choose a dependable and licensed FHA construction loan builder as they will need to submit documents pertinent to your housing loan. Let us know how we can help you make things easier on your application.
- Post published:September 18, 2020
- Post category:Construction Loan