Houston Mortgage First-Time Homebuyer - FAQ Part 8 by houstonmortgagetexas

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Houston Mortgage First-Time Homebuyer - Frequently Asked Questions (FAQ) - Part 8 - FHA loans can provide homebuyers and homeowners with more options than conventional loans. For those who do not meet the eligibility requirements for a conventional loan, pursuing an FHA loan may be a very wise decision. To learn more about the types of FHA loans and other FHA options that are available, you might want to review these answers to some of the most Frequently Asked Questions (FAQs) about FHA loans.

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									                                     Call Today: (800) 704-5432 or (281) 305-9375
                                     Click Here to Apply For Your Houston Mortgage

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Houston Mortgage First-Time Homebuyer: Frequently Asked Questions (FAQ) Series


Part 8: Exploring FHA Loans and Other Options

FHA loans can provide homebuyers and homeowners
with more options than conventional loans. For
those who do not meet the eligibility requirements
for a conventional loan, pursuing an FHA loan may
be a very wise decision. To learn more about the
types of FHA loans and other FHA options that are
available, you might want to review these answers to
some of the most Frequently Asked Questions
(FAQs) about FHA loans.


Does the FHA offer loans on homes that
need renovations?

Yes. The 203(k) FHA loan allows the homebuyer to finance the cost of the purchase of the home as well as
the cost of rehabilitation. When taking out this type of FHA loan, a portion of the loan goes toward paying
the mortgage and the rest is placed into an escrow account. The funds are then released as the rehabilitation
is completed. To qualify for a 203(k) loan, the transaction must meet the following guidelines:

•	     The	home	must	be	a	minimum	of	one	year	old

•	     The	rehabilitation	costs	must	at	least	$5,000,	but	the	total	value	of	the	property	and	its	repairs	must		
       still fall within the FHA maximum mortgage limit

•	     The	loan	must	follow	the	standard	203(b)	FHA	loan	requirements	

Talk to your lender to learn more about the 203(k) loan and the types of renovations that are covered.


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                                     Call Today: (800) 704-5432 or (281) 305-9375
                                     Click Here to Apply For Your Houston Mortgage

                                                                                             H O U S T O N F H A & U S D A M O RT G A G E C O N V E N T I O N A L M O RT G A G E
                                     W W W. H O U S TO N M O R T G A G E T E X A S . C O M   M O RT G A G E H O U S T O N VA M O RT G A G E 1 S T- T I M E H O M E B U Y E R S




Houston Mortgage First-Time Homebuyer: Frequently Asked Questions (FAQ) Series


Does the FHA program loans to help add energy-efficient features to a home?

Yes. Whether taking out a 203(b) or 203(k) loan, you may also take out an Energy Efficient Mortgage. With
an Energy Efficient Mortgage, or EEM, you can finance the cost of adding energy-efficient features to a
new home or to an existing home. Guidelines for an EEM include:

•	     The	cost	of	the	improvements	must	be	determined	by	an	energy	consultant	or	by	a	Home	Energy		 	
       Rating System.

•	     The	anticipated	savings	must	be	more	than	the	cost	of	making	the	improvements

•	     Only	one-	and	two-unit	new	and	existing	homes	are	eligible,	while	condos	are	not

•	     The	cost	of	the	improvements	being	financed	may	be	no	more	than	5	percent	of	the	property	value			
	      or	$4,000,	whichever	is	greater.

•	     The	total	cost	must	fall	within	the	FHA	loan	limit


Does the FHA offer a loan for renovations only?

Yes. The Title I loan is available for homeowners who wish to make repairs or non-luxury renovations to
their homes. The Title I loan program offers a manageable interest rate and repayment schedule. Loans
amounts	through	the	Title	I	program	are	limited	to	between	$5,000	and	$20,000,	with	no	lien	required	if	the	
loan	is	less	than	$7,500.




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                                     Call Today: (800) 704-5432 or (281) 305-9375
                                     Click Here to Apply For Your Houston Mortgage

                                                                                             H O U S T O N F H A & U S D A M O RT G A G E C O N V E N T I O N A L M O RT G A G E
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Houston Mortgage First-Time Homebuyer: Frequently Asked Questions (FAQ) Series


Does the FHA offer any other types of loans?

Yes. The FHA also insurance loans for the purchase or rehabilitation of all of the following:

•	     Condos

•	     Cooperatives

In addition, it offers special programs for disaster victims, urban areas and members of the armed forces.
Insurance for Adjustable Rate Mortgages is also available from the FHA.


What types of closing costs are associated with FHA-insured loans?

FHA closing costs are similar to the costs associated with a conventional loan. You must pay a single,
upfront	mortgage	insurance	premium	that	is	equal	to	1.75	percent	of	the	mortgage.	You	will	then	be	respon-
sible	for	the	annual	premium,	which	is	paid	on	a	monthly	basis,	if	you	have	a	mortgage	that	is	over	15	years	
or	if	you	have	a	15-year	mortgage	loan	with	a	loan-to-value	that	is	greater	than	90	percent.	Although	you	
cannot roll your closing costs into your FHA loan, you may be able to apply the amount you pay toward sat-
isfying your down payment requirement.

Are FHA loans assumable?

Yes.	If	you	are	purchasing	a	home	with	an	existing	FHA-insured	loan,	you	can	assume	the	loan.	Or,	if	you	
are the seller, you can allow the buyer to assume your FHA-insured loan. Assuming an FHA loan can offer
many benefits. For example, the process is more streamlined and less expensive when compared to obtain-
ing a new loan because the process mostly consists of conducting a credit check and demonstrating that you
have sufficient income to pay off the loan. Furthermore, assuming an FHA loan typically results in a lower
interest rate.


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                                                                                                                                                      PAGE
                                     Call Today: (800) 704-5432 or (281) 305-9375
                                     Click Here to Apply For Your Houston Mortgage

                                                                                             H O U S T O N F H A & U S D A M O RT G A G E C O N V E N T I O N A L M O RT G A G E
                                     W W W. H O U S TO N M O R T G A G E T E X A S . C O M   M O RT G A G E H O U S T O N VA M O RT G A G E 1 S T- T I M E H O M E B U Y E R S




Houston Mortgage First-Time Homebuyer: Frequently Asked Questions (FAQ) Series


What should I do if I cannot make payments on my FHA loan?

If you are having trouble making payments on your FHA loan, you should call or write your lender as soon
as possible. By clearly explaining the situation and providing the lender with your current financial informa-
tion, you may be able to develop an alternative payment plan. HUD offers a number of loss mitigation pro-
grams that may be able to help. Some of these include:

•	     Special	Forbearance	–	the	lender	creates	a	revised	repayment	plan,	which	may	include	a	temporary		
       reduction or suspension of your payments

•	     Mortgage	Modification	–	allows	you	to	refinance	your	debt	and/or	extend	the	terms	of	your	
       mortgage loan; you may be able to qualify for this program if you have recovered from financial
       programs, but your net income is less than what it was before

•	     Partial	Claim	–	the	lender	helps	you	obtain	an	interest-free	loan	from	HUD	in	order	to	bring	your		 	
       current mortgage up to current status

•	     Pre-Foreclosure	Sale	–	makes	it	possible	for	you	to	sell	your	property	and	pay	off	your	loan	in	order		
       to avoid foreclosure

•	     Deed-In	Lieu	of	Foreclosure	–	allows	you	to	voluntarily	give	your	property	back	to	the	lender;	while		
       this option will not save your house, it will help you avoid the extra time, cost and effort associated
       with the foreclosure process

To qualify for these special programs, you must continue to live in the home that you have purchased with
an FHA-insured loan.




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                                                                                                                                                      PAGE
                                  Call Today: (800) 704-5432 or (281) 305-9375
                                  Click Here to Apply For Your Houston Mortgage

                                                                                          H O U S T O N F H A & U S D A M O RT G A G E C O N V E N T I O N A L M O RT G A G E
                                  W W W. H O U S TO N M O R T G A G E T E X A S . C O M   M O RT G A G E H O U S T O N VA M O RT G A G E 1 S T- T I M E H O M E B U Y E R S




Houston Mortgage First-Time Homebuyer: Frequently Asked Questions (FAQ) Series


How can I learn more about obtaining an FHA-insured loan?

For more information regarding FHA Loan Programs and eligibility requirements for FHA Loan Programs,
contact an FHA-approved lender today or visit the HUD website at http://www.hud.gov.




                    Call	today:	(800)	704-5432	or	(281)	305-9375	or	visit	us	online:	
                               http://www.HoustonMortgageTexas.com




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