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FHA Home Improvement Loans: Home Equity And FHA Loan Requirements
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Published: March 20, 2007
It's a well known fact that every once in awhile everyone gets the urge to spruce up the house a bit. Sometimes this can mean new drapes or carpet, but other times it can mean remodeling the whole backyard or even adding a pool. For the more extreme improvements, FHA Home Improvement Loans are available.
FHA home improvement loans adhere to almost the same requirements as any other FHA loan. To obtain FHA home improvement loans for a home, FHA requires the property in question to be a single family real estate home, multi family home, a condo less than four stories, or a public urban development. Other FHA qualifying requirements for FHA home improvement loans include: two years of steady employment, income for the past two years to be the same or increasing, good credit report, bankruptcy must be at least two years old, foreclosure should be at least three years old, and the new mortgage payment should be about 30% of the gross income.
FHA will allow up to $25,000 for a loan for a single family home without any equity in the home. Therefore, in theory, FHA home improvement loans can exceed the value of the house. A maximum amount of $12,000 for a multi family structure is allowed and the loan may not exceed $60,000. The FHA home improvement loans can remain for as long as 20 years in both single family homes and multifamily properties. These FHA home improvement loans may only be used for light or moderate rehabilitation of a property. The only people that can be eligible for any kind of FHA home improvement loans are the property owner, the person who is leasing the property, or someone who is purchasing the property.
Another option when financing a home improvement is to take out home equity loans. The amount of money received for home equity loans depends on where an individual lives, if an individual is purchasing or refinancing the home, credit history, how much the house was purchased for, and the amount of monthly payments on the house.
For example, let's say someone paid $60,000 for a home, and the home is now worth $80,000 due to improvements. The equity of the home would be $20,000, which can be taken out as home equity loans. Because home equity loans depend on a case to case basis, there is no minimum or maximum available from FHA. Upon qualification, FHA offers a fixed interest rate for home equity loans. FHA loan requirements for home equity loans are the exact same as the requirements for any general FHA loan.
FHA home improvement loans and FHA home equity loans can be used to spruce up a house. FHA home improvement loans give homeowners the freedom to fix the roof or add a pool. The great thing about FHA home improvement loans is that they contain low interest rates, however; it's important for homeowners to stay up to date with loan payments to ensure that the interest rates remain low.
Sources:
FHA Home Loans.com.2007. 13 Mar 2007. http://www.fha-home-loans.com.
FHA Loan Guidelines. FHA.com. 2007. 13 Mar 2007. http://www.fha.com.
FHA Home Improvement Loan – FHA Title 1. FHA Home Loans. 2007. 13 Mar. 2007. http://www.fha-home-loans.com/home_improvement_fha _loans.htm.
FHA Refinance Loan. FHA.com. 1997-2007. 13 Mar. 2007. http://fha.com/home_equity.cfm.
FHA home improvement loans adhere to almost the same requirements as any other FHA loan. To obtain FHA home improvement loans for a home, FHA requires the property in question to be a single family real estate home, multi family home, a condo less than four stories, or a public urban development. Other FHA qualifying requirements for FHA home improvement loans include: two years of steady employment, income for the past two years to be the same or increasing, good credit report, bankruptcy must be at least two years old, foreclosure should be at least three years old, and the new mortgage payment should be about 30% of the gross income.
FHA will allow up to $25,000 for a loan for a single family home without any equity in the home. Therefore, in theory, FHA home improvement loans can exceed the value of the house. A maximum amount of $12,000 for a multi family structure is allowed and the loan may not exceed $60,000. The FHA home improvement loans can remain for as long as 20 years in both single family homes and multifamily properties. These FHA home improvement loans may only be used for light or moderate rehabilitation of a property. The only people that can be eligible for any kind of FHA home improvement loans are the property owner, the person who is leasing the property, or someone who is purchasing the property.
Another option when financing a home improvement is to take out home equity loans. The amount of money received for home equity loans depends on where an individual lives, if an individual is purchasing or refinancing the home, credit history, how much the house was purchased for, and the amount of monthly payments on the house.
For example, let's say someone paid $60,000 for a home, and the home is now worth $80,000 due to improvements. The equity of the home would be $20,000, which can be taken out as home equity loans. Because home equity loans depend on a case to case basis, there is no minimum or maximum available from FHA. Upon qualification, FHA offers a fixed interest rate for home equity loans. FHA loan requirements for home equity loans are the exact same as the requirements for any general FHA loan.
FHA home improvement loans and FHA home equity loans can be used to spruce up a house. FHA home improvement loans give homeowners the freedom to fix the roof or add a pool. The great thing about FHA home improvement loans is that they contain low interest rates, however; it's important for homeowners to stay up to date with loan payments to ensure that the interest rates remain low.
Sources:
FHA Home Loans.com.2007. 13 Mar 2007. http://www.fha-home-loans.com.
FHA Loan Guidelines. FHA.com. 2007. 13 Mar 2007. http://www.fha.com.
FHA Home Improvement Loan – FHA Title 1. FHA Home Loans. 2007. 13 Mar. 2007. http://www.fha-home-loans.com/home_improvement_fha _loans.htm.
FHA Refinance Loan. FHA.com. 1997-2007. 13 Mar. 2007. http://fha.com/home_equity.cfm.
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