What Is an FHA Construction Loan, and Who Can Qualify?
An FHA loan only requires a 3.5% down payment, 43% debt-to-income ratio, and 580 credit score. Actually, you can apply for an FHA loan with a credit score as low as 500. But if your credit score is between 500 and 580, then you'll need at least 10% for a down payment.
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What would disqualify a house from an FHA loan?
If a home is too close to a high-pressure gas pipeline, high voltage electrical wires, mining or drilling operations or other hazards, it may not be possible for your lender to approve the loan.
What Defects Will the FHA Overlook?
Damaged or cracked windows, doors, counter tops and other features that are still operable and functioning.
Missing handrails.
Poor workmanship.
Worn floor finishes.
Deficient paint surfaces in homes completed after 1978 (homes built earlier may pose lead hazards)
How hard is it for a house to pass FHA inspection?
To pass an FHA inspection, however, your foundation must be free of significant cracks as well as ongoing water damage or evidence thereof. If you have a crawl space under your home, it must have proper ventilation and be free and clear of trash and debris. FHA inspectors look up as well as down.
How long does FHA appraisal take?
In most cases, the appraisal can be completed within a matter of days. But this will depend on the appraiser's workload, efficiency, and other factors. The property visit itself usually only takes a few hours. But the appraiser has some other research to do as well, such as reviewing comparable sales.
Is it better to have a conventional loan or FHA?
A conventional loan is often better if you have good or excellent credit because your mortgage rate and PMI costs will go down. But an FHA loan can be perfect if your credit score is in the high-500s or low-600s. For lower-credit borrowers, FHA is often the cheaper option.
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Can I get rid of PMI on an FHA loan?
Getting rid of PMI is fairly straightforward: Once you accrue 20 percent equity in your home, either by making payments to reach that level or by increasing your home's value, you can request to have PMI removed.
When did FHA PMI become permanent?
The good change is that FHA lowered its mortgage insurance premiums in January 2015. On the negative side, they've made PMI essentially permanent over the life of most mortgages that they insure.