Can I Qualify for FHA 203k Loan After Bankruptcy?
The Federal Housing Administration has an acquisition and construction mortgage loan program for owner occupied home buyers. The acquisition and construction mortgage loan is called FHA 203k Rehab Loans. Home buyers who have creative ideas of remodeling their homes or are interested in buying a fixer upper or foreclosure properties can now have the option to do so with a FHA 203k Rehab Loan. Most construction loans require that the property owner have skin in the game where majority of rehab lenders will require a 20% down payment. This is not the case with a FHA 203k Loan. FHA only requires FHA 203k mortgage loan borrowers to have a 3.5% down payment on the after improved value of the property. For example, if you were to purchase a home for $100,000 and the home needs $100,000 in home improvements where the total acquisition and construction costs are $200,000 and the after improved value of the completed project is $200,000, then you are required a 3.5% down payment, or $7,000, as the total funds required plus your closing costs. I get many calls from home buyers who are interested in seeing if they qualify for a FHA 203k Loan After Bankruptcy. The answer is yes. Home buyers can qualify for a FHA 203k Loan After Bankruptcy.
About FHA 203k Rehab Loans
There are two types of FHA 203k Rehab Loans. The first and most popular is the FHA 203k Streamline Rehab Loans which limits the construction budget to $35,000. The FHA 203k Streamline Rehab Loan program limits the homeowner on the type of work that they can do. Homeowners cannot do structural changes to the existing home or do a room addition or any other structural repairs. They can do kitchen remodeling, basement remodeling, attic remodeling, bathroom remodeling, new flooring, new windows, new millwork, paint, new siding, new gutters, new plumbing, new electric, new heating and air conditioning systems, and new appliances.
The second type of FHA 203k Rehab Loan is the full standard FHA 203k Loan program where there is no construction limit. A full standard FHA 203k Loan mortgage borrower can borrower as much as they can to do rehab on their property as long as the rehab will support the after repair value appraisal once the job has been completed. Besides being able to do everything you can do on a FHA 203k Streamline Loan, you can also do structural repairs and room additions with a Full FHA 203k Rehab Loan. You can even do a complete gut rehab construction project with a full standard FHA 203k Loan.
Requirements In Qualifying For FHA 203k Loan After Bankruptcy
Home buyers seeking a fixer upper mortgage loan can now purchase a home of their dreams with a FHA 203k Loan. Qualifying for FHA 203k Loan After Bankruptcy is no issue as long as you have waited out the two year mandatory waiting period after your bankruptcy discharge date. To qualify for FHA 203k Loan After Bankruptcy, you need a minimum of a 580 FICO credit score and must meet FHA lending guidelines. FHA 203k Mortgage Lenders do expect you to have re-established credit after your bankruptcy and no late payments or derogatory credit after your bankruptcy discharge. Whether it is a FHA 203k Streamline Rehab Loan or Full Standard FHA 203k Loan, please contact me at 262-716-8151 if you are interested in pursuing a FHA 203k Loan After Bankruptcy.