Arizona FHA 203k Loan

Arizona FHA 203k Loan

The Arizona FHA 203k streamline loan program has become popular with the downturn in the housing market. When a property is owned by the bank, chances are that the property may be in need of a little work and the FHA 2o3k streamline program is a great option. Some of the frequently asked questions we see about the Arizona FHA 203k streamline program include:

What is the Arizona FHA 203k loan?

The Arizona FHA Streamline 203K is a rehabilitation loan that works much like a construction loan.  The buyer of the home is able to purchase a home that is in need of repairs and is able to finance the repair work in the mortgage to fix items in the house.  The Arizona FHA 203k loan consists of the purchase price of the home plus the construction costs for the work to be performed after close.

Example:

Arizona FHA 203k loan: How much do I write the sales contract for?
The offer is the purchase price of the home only.  Do not 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.

How much money can I use for repairs with the Arizona FHA 203k loan?
The minimum that FHA will allow you to spend is $5,000 and the maximum allowed under the Arizona FHA 203k streamline program is $35,000.

Does the house need to be FHA qualified?
Not until after the work is completed.  The FHA 203k streamline loan is designed to help properties that are not currently qualified, actually become qualified with the needed repairs.

Is this loan harder to qualify for than a traditional FHA loan?
No.  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 qualifying, but those are the general highlights.

How do I go about contracting the work?
It is recommended that you work with a general contractor that can perform all construction tasks.  We can easily help recommend one – we know a few great ones. It is also important that the contractor be experienced in FHA guidelines so that they can include any FHA required items in their contract.

FHA 203k Mortgage Rates

The easiest way to qualify for the FHA 203k program is to shop multiple lenders. Get started here by shopping multiple lenders who are showing their rates updated daily. Shop and save now!