This article covers FHA 203(k) loans in Texas.
Texans looking to buy and rehab homes, or simply to renovate their own homes, may find the FHA 203(k) loans in Texas to be of great help. The purpose of this type of loan is to support people in their effort to revitalize their neighborhoods.
FHA 203(k) loans are for homebuyers who are interested in homes that need repairs or upgrades. It is a combined acquisition and construction loan with a 3.5% down payment. The proceeds can be used for both the purchase and rehab loan amount.
FHA 203(k) loans are also for people who want to refinance their current homes and pay for repairs. They can refinance their existing mortgage and get a bigger mortgage that includes the construction costs.
How to Qualify for FHA 203(k) Loans in Texas
Loan limits were increased to $336,760 for FHA 203(k) loans in Texas due to rising house prices. This is the second year in a row the U.S. Department of Housing and Urban Development (HUD) called for increases.
Types of 203(k) loans
There are two kinds of 203(k) loans:
- FHA 203(k) Streamline: This loan covers acquisition cost plus a maximum of $35,000 for construction.
- FHA 203(k) loan: There is no limit on the construction budget if the total loan amount does not exceed FHA loan limits for your area. This loan is often used for room additions and structural changes to the existing home.
Homes that are fairly new and at least one year old can qualify for the 203(k) loan program. One to four units qualify as well as FHA-approved condominium units. Teardowns qualify for the 203(k) loan program if on the original foundation. Total teardowns can be done if the new home is built on the existing foundation.
What Kinds of Repairs Can I Make?
FHA 203(k) loans are not for millionaires to build mansions. Luxury items like swimming pools do not qualify. Here are some repairs and upgrades that do:
- Plumbing and electrical
- Roofing and siding
- Energy conservation
- Kitchen and Bathroom
- New appliances
- Decks, driveways, and patios
- Room additions or second-story additions
- Attic and basement
- Site grading
Do You Qualify for an FHA 203(k) Loan?
It is not difficult to get an FHA 203(k) loan with Gustan Cho Associates. Gustan Cho Associates is a national mortgage company, and we are experts in originating FHA 203(k) loans in Texas. On monthly basis we take care of clients in Houston, Austin and other big cities in Texas.
Applicants need to go through the regular mortgage approval process, but you only need a minimum credit score of 580. We handle the entire process, and our mortgage underwriters review and analyze the following:
- Credit history
- Credit scores
- Contractors’ bids
Borrowers need to get a scope of work and have a general contractor who has no relationship with the mortgagee. Mortgage rates for FHA 203(k) loans in Texas are slightly higher than traditional FHA purchase or refinance loans, and there are more costs and fees involved.
You can contact Gustan Cho Associates at 800-900-8569 or text us for a faster response. You can also email us at firstname.lastname@example.org. We are experts in FHA 203(k) loans in Texas and are available 7 days a week, evenings, weekends, and holidays.