Connecticut FHA 203K Loan
Looking into buying your first home? Found the perfect house but, it needs some work? Looking to put only 3.5% down?
Then a Connecticut FHA 203k loan might be what you are looking for. This loan product has all the same qualifications as a typical FHA loan with addition to a buffer amount to make the necessary renovations to purchase the home and have it fall under the FHA guidelines. In addition, you will need a licensed general contractor to provide a bid for all repairs and to carry out the work post close. If you are a general contractor, you are not allowed to be the one providing the bid or work. It must be an outside contractor.
Here are a few key things you need to qualify for this loan:
- 620-640 minimum credit score
- Debt to Income must be 45% or under
- Must be occupying the property as your primary residence
- Must qualify for the total loan amount with repairs (i.e. Purchase Price is $150,000.00 and repairs are $25,000.00; you must qualify for the total of $175,000.00)
A few other things to keep in mind:
- If the repairs are over $30,000.00 a HUD Consultant is required (we can give you recommendations if it comes to that)
- Closing Costs are different than Down Payment: closing costs are a separate payment made to create escrow accounts, pay for attorney fees, appraisal fees and other miscellaneous items paid at closing. We generally quote about 4% of the total loan amount.
- If you don’t know any contractors, don’t worry, we can always recommend one or you can do some homework of your own on https://www.homeadvisor.com/
- To even get the ball rolling it is very important to have a contractor prior to submission, as the bid is need for submission and appraisal
The pre-approval process for a Connecticut FHA 203K Loan is easy. We will work with you every step of the way throughout the process. Please feel free to call or email me today with any questions.