General Information about the FHA Home Builders Loan

If you are nearing the construction phase on your house, an FHA home loan could be to your advantage. With the FHA, you can get several benefits that you cannot get through a normal loan program. If you are in the market for a good construction loan, it is to your advantage to consider all of the available options in front of you. Therefore, you owe it to yourself to check out what the FHA has to offer. Here is some general information about the FHA home builders loan and what it can do for you.

FHA Loans

The FHA home builders loan fits into the criteria of all of the other loans that the FHA offers. The FHA is a department of the U.S. Department of Housing and Urban Development or HUD. The FHA will not actually be offering you the loan directly. You will still be working with a traditional lender, however, the FHA will insure the loan. This makes it easier for the banks to write loans when they are insured. It takes part of the risk away from the lender if you default and places it on the FHA. This increases approval rates and helps people with questionable credit get approved. 

Loan Uses

The FHA home builders loan can be used for the construction financing for a new home. You can also use it to remodel an existing home extensively, or for any other major remodeling projects.

Qualifications

In order to get the FHA home builders loan, you will have to meet the qualifications set forth by the lender. They will want you to show them that you have some means to repay the loan. Therefore, you will have to have a steady form of income that is determined to be sufficient to handle the debt. They will also check your credit and determine if it is good enough to lend to. Your credit score does not have to be as high as it does through traditional lenders, but you still have to have at least a decent credit rating. You will have to apply at a certified FHA lender and meet their individual lending standards. Each lender has a little bit different standards but most of them are similar when using an FHA loan program.

Benefits

The benefits of using an FHA loan program can be substantial. For one thing, you might be approved where other loan programs did not approve you. This means that you will be able to build the house that you have always wanted to build. 

Another major benefit of using an FHA loan is that the down payment is usually quite a bit less than with a traditional lender. You will be able to get the loan without coming up with a huge amount of money out-of-pocket. This enables many people to get loans that would not otherwise be able to do so. The interest rates on FHA loans are usually around the best in the industry as well. 

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