2017 FHA 203k Loan Requirements In Illinois
2017 FHA 203k Loan Requirements Update For Chicago And The State Of Illinois
2017 FHA 203k Loan Requirements in Illinois require that the home buyer have minimum credit scores and debt to income ratio requirements in order to qualify for Rehab Loans. 203k Mortgages are an excellent mortgage program offered by FHA where a home buyer can purchase a fixer upper or a foreclosed home that is in need of repairs. 2017 FHA 203k Loan Requirements require that the home buyer have at least a 580 FICO credit score and needs to meet all of FHA Guidelines just like any other types of FHA Loans. 2017 FHA 203k Loan Requirements mandate a minimum 3.5% down payment on a FHA home purchase. Many FHA Rehab Mortgage Lenders have mortgage lender overlays on Rehab mortgage loans. 203k Loans are considered higher risk mortgage loans by mortgage lenders and due to this layered risk, many mortgage lenders will have mortgage lender overlays. Again, due to the layered risk on 203k Home Loans, mortgage interest rates on 203k’s are higher than standard FHA Loans on single family homes.
What Are Rehab Loans?
203k Rehab Loans enables a home buyer the ability to purchase a fixer upper that needs work done to the home and offers the borrower the acquisition loan as well as the remodeling budget all in one mortgage loan and one closing. 203k Loan borrowers need to meet standard FHA lending guidelines which the minimum credit score requirements are 580 FICO credit scores and minimum debt to income ratio requirements.
Debt To Income Ratio
FHA Guidelines On Debt To Income Ratios require a debt to income ratio cap of up to 56.9% DTI for FHA mortgage loan borrowers who have a credit score of at least 620 FICO or higher. The maximum debt to income ratio cap gets reduced to 43% DTI for FHA mortgage loan borrowers who have credit scores of 620 FICO or under.
However, 203k Rehab Loans are considered riskier mortgage loans and most mortgage lenders have mortgage lender overlays on 203k where they can cap the debt to income ratio caps at 45% DTI to 50% DTI.
What Are 203k Home Loans?
There are two different types of 203k Home Loans. The 203k Rehab Streamline Loan is an acquisition and construction loan with a maximum construction budget of $35,000. The 203k Streamline Loan are for home buyers and homeowners needing to rehab their current home. With the 203k Rehab Streamline, the loan will payoff the homeowner’s current mortgage loan balance gets refinanced with the FHA 203k Streamline Loan where it pays off the old mortgage balance and a new mortgage loan is created with a maximum $35,000 rehab construction loan held in escrow.
You can do any type of rehab with a Streamline Rehab Loan except for structural:
- Types of work allowed with a Streamline Loan are kitchen remodeling
- Bathroom remodeling
- Basement remodeling
- Attic remodeling
- New floors
- New painting
- New mill work
- New windows
- New siding
- New roofing
- New HVAC
- New appliances
- Other types of remodeling that you do not need to move structural walls or foundation
- Room additions are not allowed with a Streamline 203k Loan
Standard FHA 203k Home Loans
There is no construction budget with the full standard 203k and structural changes and room additions are allowed. You can do everything from kitchen and bathroom remodeling, basement remodeling, attic remodeling, new HVAC, new appliances, new windows, new roof, new siding, as well as structural changes and room additions with a full FHA 203k Loan.
If you need a Illinois FHA 203k Mortgage Lender in Chicago or other parts of other country with no FHA lender overlays, please contact us at 262-878-1965 or email us at email@example.com. We are available 7 days a week, evenings, weekends, and holidays. You can also text Gustan Cho on his cell at 262-716-8151 for faster response.