Quantcast

The FHA refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly, sometimes without an appraisal.

FHA Rates Near 50 Year Low!

Now is the time to drop the interest rate on your 30-year mortgage or refinance into a 15-year home loan.

FHA Rates for September 22, 2021
Are You Watching Your Credit Score?

NOTICE: Some FHA mortgage lenders are substantially raising FICO score requirements during the Coronavirus crisis, even though FHA minimums remain unchanged.


- Improving Your Credit Score Has Never Been More Important -

Get started one
Get started two
Get started three
Get started four
FHA.com is a privately owned website, is not a government agency, and does not make loans.

Choose a Loan Type

FHA.com is a privately owned website, is not a government agency, and does not make loans.

FHA 203(k) Rehabilitation Loans

Sometimes It Pays to Refinance

When we picture buying a home, it's easy to assume that the house is new and in great condition. However, that's not always the case. Many buyers decide to purchase a home that is significantly older, and not in the best condition. There could be a number of reasons for this kind of buy; the buyer is looking for a fixer-upper, the list price is affordable, etc.

Securing a mortgage for such a property wasn't always easy; the entire process could be very costly, with improvement loans that had high interest rates, short repayment terms, and balloon payments. With the FHA 203(k) Rehabilitation Loan, that's no longer the case. This mortgage product enables borrowers to finance the purchase or refinance of a home, along with its renovation or "rehabilitation" of their existing home. A Rehab Loan benefits borrowers, as well as lenders, since it insures a single, long term loan--whether its a fixed-rate or ARM-- that covers the purchase/refinance and renovation of a home.

The FHA's 203(k) program is also a good option in cases of federally declared natural disasters that cause property damage or destruction. Borrowers can use a rehab loan in such situations, to finance the necessary renovations.

Advantages of a Rehab Refinance

There are a number of advantages to refinancing with the FHA 203(k) Rehabilitation Loan. With the FHA Rehab Loan, you have the option to refinance your property and create your own home equity with repairs and upgrades. This 203(k) allows you to buy an older house at a low price (and great interest rates). You are then able to renovate your home according to your own needs and style, while simultaneously increasing equity with the new improvements.

Additionally, the FHA 203(k) loan is a convenient way to purchase or refinance your home, without having a high credit score, making a large down payment, or having high interest rates. As with all FHA mortgage products, your home loan is insured, which allows for more leniency than a conventional loan. While section 203(k) insured loans save borrowers time and money, they also benefit the lender by allowing them to have the loan insured, even though the property has not yet been renovated, and the condition and value of the house may not yet offer adequate security.

Eligible Rehabilitation Activities

There are limitations and restrictions on the amount, types, and costs of rehabilitation covered under the FHA 203(k) Rehabilitation Loan, which range from relatively minor expenses, to virtual reconstruction of the property. For example, the cost of renovation must be at least $5,000. Whereas on the high end, a property that has been demolished or will be razed as part of rehabilitation is eligible under 203(k), provided that the existing foundation remains in place.

According to the US Department of Housing and Urban Development, the types of rehabilitation that borrowers may make using Section 203(k) financing include:

  • Structural alterations and reconstruction
  • Modernization and improvements to the home's function
  • Elimination of health and safety hazards
  • Changes that improve appearance and eliminate obsolescence
  • Reconditioning or replacing plumbing; installing a well and/or septic system
  • Adding or replacing roofing, gutters, and downspouts
  • Adding or replacing floors and/or floor treatments
  • Major landscape work and site improvements
  • Enhancing accessibility for a disabled person
  • Making energy conservation improvements

HUD also requires that properties financed under this program meet certain basic energy efficiency and structural standards.


FHA Refinance Options for Homeowners

SEE YOUR CREDIT SCORES   From All 3 Bureaus  

Do you know what's on your credit report?

Learn what your score means.


GET STARTED

FHA Loan Articles and Mortgage News

FHA and HUD Assistance for Borrowers in Disaster Areas

September 15, 2021 - If you have purchased a home with an FHA mortgage and need help with your mortgage in the wake of a natural disaster, there are several important steps you should take to get relief. Contact your mortgage servicer to ask for assistance with your mortgage while you recover.

Uses for FHA Cash-Out Refinancing

September 13, 2021 - FHA Cash-Out loans can be used for refinancing non-FHA mortgages as well as existing FHA loans. The proceeds from this cash-out refinance can be used for any purpose including paying off credit card debt, making home improvements, and even paying for luxury items like cars or boats. 

FHA Loan Approval: What's in Your Credit Report?

September 11, 2021 - What does your loan officer need to do in order to determine whether to approve or deny your mortgage loan? It's not just your credit score, although that plays a very important part in the process. Your free credit reports contain much more information than just FICO score numbers.

First-Time Home Buyer Mistakes to Avoid

September 8, 2021 - Are you thinking about becoming a first-time home buyer? Owning a home means taking some big steps, and there are mistakes to avoid as you enter into the process of planning, saving up for your down payment and other expenses, and applying for a loan to purchase a new home.

Credit Agency Advice for Your Home Loan

September 2, 2021 - Are you about being a truly ready borrower? If you are considering a home loan application is is a great idea to start working on credit and related home loan issues early--long before talking to a broker or mortgage lender.