FHA Construction Loan – Apply and Get Approved Today
What is an FHA Construction Loan?
An FHA construction loan enables homeowners to construct homes with funds that are released in phases. The entire process involves regular inspections undertaken periodically before money is disbursed to borrower through an escrow account. And prior to release of remaining loan amount, there will be a final inspection of the house being constructed for ensuring that it is compliant with FHA housing standards. To qualify, applicants must have a credit score of over 680.
How FHA Construction Loan Works?
With FHA construction loan, eligible homeowners can purchase land and build homes. But there could be a cap on loan amounts disbursed. Typically, home buyers can buy land and construct a new house for loan amounts ranging from $ 271,000 to $750,000. Borrowers may be required to pay 3.5% down payment of the project estimate.
Closing costs and interest payments, while house is under construction, can be rolled into the loan amount. Besides, if probable applicant already owns a piece of land that has appreciated in value, FHA will give special credit for equity built up in the land. In such cases, lenders may not ask you to pay any down payment. To learn more, contact us online today!