203k Rehab Mortgage

FHA 203k Rehab Loan in Mississippi Lending Requirements

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover and discuss qualifying for an FHA 203k rehab loan in Mississippi Lending Requirements. Housing prices in Mississippi have been rising year after year since 2012. Many homeowners in Mississippi own homes in dire repair due to not having flood insurance. Many homes in the state of Mississippi got damaged due to floods and hurricanes in the past 10 years. Now homeowners in Mississippi can qualify for HUD’s FHA 203k loan in Mississippi to do repairs. Mississippi home buyers can also purchase fixer-uppers and customize them with our 203k Loan Program at Gustan Cho Associates. In this article, we will discuss and cover using an FHA 203k loan in Mississippi to purchase fixer-uppers.

Using FHA 203k Loan in Mississippi To Purchase Fixer-Uppers

Using an FHA 203k loan in Mississippi is one of the most popular mortgage loan programs for homebuyers in Mississippi. The United States Department Of Housing and Urban Development, or HUD, is the parent of the Federal Housing Administration, or FHA. FHA has 203k mortgages. This loan program is an acquisition and rehab mortgage loan all combined in one loan and one closing.

Case Scenario in Using an FHA Loan in Mississippi

Here is a loan scenario illustrating using an FHA 203k Loan in Mississippi. For example, here is a case scenario:

  • Say a home buyer wants to purchase a foreclosure
  • The property is currently not habitable
  • Sellers want $100,000
  • It takes $100,000 to get it rehabbed and habitable
  • So, the home buyer will need a total of $200,000 to have the acquisition and construction for this home purchase project

Most lenders will not lend on a property that is not in good condition and habitable.

Cases Where Home Buyers Can Benefit Using FHA 203k Loans

This is when a home buyer can utilize the FHA 203k loan in Mississippi to purchase the home. Have the acquisition and rehabilitation funding for the repairs all in one mortgage loan with very little money down payment. Many home buyers, especially first-time home buyers, do not have the cash to do the rehab and construction funding.

Comparing Second Mortgages Versus FHA 203k Loan in Mississippi

Comparing Second Mortgages Versus FHA 203k Loan in Mississippi

Second mortgages are very difficult to secure. Unless there is a lot of equity in the home being rehabbed. The FHA 203k loan in Mississippi is the answer for many homebuyers who have very little cash to put down on a home purchase. The rehab funding is out of the question to make their custom dream home come true. The FHA 203k loan in Mississippi may be the answer for a home buyer who wants to purchase a fixer-upper. Turn that fixer-upper into their dream homemaking into a reality. 203k Rehab Mortgage has been specifically created and launched for homebuyers who want to get financing for the cost of home renovations into an acquisition and construction loan. This can be done with a very low down payment and making it affordable.

How Do I Qualify For FHA 203k Loan in Mississippi?

All borrowers need to qualify for FHA Loan Requirements. Need to meet 203k Rehab Mortgage FHA Lending Guidelines.  FHA 203k loan in Mississippi is an FHA loan. There are two parts to the FHA 203k Rehab Mortgage Qualification Requirements:

  • The borrower needs to meet all FHA Mortgage Lending Guidelines
  • FHA 203k Rehab Loans are considered higher risk files
  • Most lenders do have lender overlays
  • Having higher mortgage rates due to being considered a higher risk
  • Do not allow for Manual Underwriting
  • Lenders normally have overlays
  • Most Lenders will require a 640 FICO

The Team at Gustan Cho Associates can qualify borrowers for FHA 203k Loans with lower credit scores.

How Does The FHA 203k Loan in Mississippi Work?

The way FHA 203k loan in Mississippi work is as follows:

  • 203k Rehab Mortgage Loan Programs will require the borrower to put a 3.5% down payment on the acquisition and construction based on the after improved value of the property
  • Homeowners refinancing their homes with a 203k Rehab Mortgage can go up to 110% of the after improved value of the property based on the after improved value on the appraisal
  • Funding for the 203k Rehab Mortgage consists of the home purchase price, improvements needed to be made on the home

Two types of FHA 203k loan in Mississippi:

  • Streamline which limits the construction budget to $35,000
  • Standard Full Standard FHA 203k Rehab Mortgage Loan Program which there is no limit on the construction budget
  • This holds true as long as the property appraises out with the after value appraisal
  • FHA Loan does not go over the maximum FHA Loan Limit cap

Benefits of FHA 203k Loan in Mississippi

There are many benefits to utilizing the 203k Rehab Mortgage Program. Opportunity to purchase a fixer-upper where buyers could not have been able to and customize their fixer-upper into a dream custom home. The ability not just to remodel but also to do room addition and add square footage to home purchases where will add major value to their home. Basement remodeling, attic remodeling, and room additions are allowed with 203k Rehab Mortgage Loan Programs. Renovations on fixer-upper home purchases can be quite expensive. HUD 203k Loans will give buyers the opportunity to choose the contractor of their choice and choose their own materials and decor for the rehab of their home. Almost as good as having your home built. If you are interested in getting more information on Rehab Mortgage Loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. We are available 7 days a week, on evenings, weekends, and holidays. You can also email us at gcho@gustancho.com.

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