To understand what a FHA 203k loan is we must first understand what exactly a FHA home loan is. The FHA -- Federal Housing Authority -- offers government guaranteed loans to home buyers which gives the banks the confidence to lend money to people they may not normally grant a mortgage to.
This is not to say that the you are borrowing money from the government
nor is it to say that by applying for a FHA home loan you will
automatically be approved, but it is to say that you are more likely to
approved for a FHA home loan than a conventional loan if you have
average or below average credit, including a bankruptcy, and less than
20% for a down payment, currently the down payment requirement is 3.5%
-- which is considerably lower.
Now that we understand the basics of a FHA home loan, it is time to
introduce the fact that in addition to the standard FHA loan offered,
there are many other FHA loan programs that home buyers may wish to take
advantage of including the traditional 30 year fixed rate mortgage,
standard 15 and 20 year mortgages and even any manner of adjustable rate
mortgages as well, you can even get qualified for refinancing or taking
out the home equity via a home equity loan through FHA programs as
It seems, though, that one of the most popular FHA loan programs that
are offered is the FHA 203k loan. These loans carry the standard
features of traditional FHA loans -- flexible credit, assumable loans,
and low down payment to name a few -- but goes a step further by making
it easy to rehabilitate a home all in one loan packaged together.
Using an FHA 203k loan can help people who need to renovate their
current homes by securing financing to do so or home buyers can use
these loans to purchase and rehab a preexisting home elsewhere.
This can benefit everyone involved from the community by making
surrounding areas nicer for all citizens, to the home owners themselves
by allowing them to purchase what could be their dream home and
providing the funds to make their dream a reality. All of that and under
one loan package, in today's unstable housing market, taking advantage
of FHA programs is definitely the way to go.
With the glut of foreclosures on the market including HUD homes for sale
which some of them requires repairs, the FHA 203K Loan may be the
answer to purchasing your dream home at a bargain price!
Article Source: http://EzineArticles.com/2467856