Securing a home loan secured by the Federal Housing Administration (FHA) for new construction is similar to obtaining a conventional loan; However, the process includes some unique requirements. In addition to a minimum down payment, the required mortgage insurance and the maximum amount of the mortgage, the FHA construction loans guidelines must be strictly adhered to. The following information will help you find an experienced loan officer and complete the necessary documents to secure your FHA financing.
The new construction guidelines must be followed to the letter.
Find an approved lender.
To obtain an FHA mortgage of any type, you must contact a lender approved by the Department of Housing and Urban Development (HUD) to provide FHA loans. Tell your real estate agent that you want to apply for an FHA mortgage. She will direct you to an approved lender. Check that the mortgage company is specialized in FHA financing.
Get a deposit.
To qualify for a new FHA loan for construction, you need a down payment of at least 10% of the purchase price. These funds can come from your current account, savings, family gifts or a cash-in-lieu program. As soon as you get funds, deposit them into your checking account or savings account. FHA subscribers generally require a written record, such as gift letters and cash-in support documents. Provide your loan officer with a copy of your deposit documents when you meet to complete your application.
Know your loan limits.
Although FHA home loans are relatively easy to obtain, the amount you can borrow is limited. Loan maximums vary from county to county.
Gather all your personal documents.
Pay stubs, bank statements, statements of debt, copies of your W-2 for the last 2 years or tax declarations if you are self-employed and your purchase contract.
Meet with your loan
Meet with your loan officer and complete a mortgage application with the FHA, which includes some additional material compared to a typical home loan application. You may also be required to pay a processing fee that covers the cost of your credit report and home assessment. FHA valuations are typically in the range of $ 350 to $ 500, depending on the type of property you build and the appraiser’s fees.
Schedule an assessment.
Make sure your lender uses an FHA approved appraiser. Because your home is not yet complete, your lender must provide your appraiser with the appropriate documentation to ensure the proper inspection is done to justify the sale price, including the builder’s master plan and license applications. to build. An FHA Subscriber may also wish to see a map of the parcel of land, its wiring diagram and a detailed description of the materials that your contractor will use to build your home.
Close your house.
Once your evaluation is complete, the subscription process will resume. Assuming you meet all the conditions, a reconciliation will be issued and a closing date will be set by your Realtor. Before closing, the FHA may require a final inspection of your home to ensure that it is ready for occupancy. Upon closing, you will be asked to sign and sign an FHA closure package. The funds from your lender will then be transferred to the title company, your builder (the seller) will receive his funds, you will receive the keys to your newly built home and your mortgage will be prepared for registration. Your first payment will be due in 1 or 2 months, depending on the day of the month you close.