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Getting approved for California FHA 203k loans is not difficult at all. It is just a lot of paperwork versus a standard FHA loan. The average home price in the state of California is $689,873 versus the national average of $398,900.
What is a Rehab Loan? A rehab loan is also referred to as a renovation loan and allows homebuyers to finance both the purchase, or refinance, of a home through one single mortgage. Interest rates are some of the lowest theyve been for many years with higher demand than supply.
The FHA 203(k) loan program insures mortgages made by private lenders approved by the Federal Housing Administration (FHA) to cover the cost of buying the property and fixing it up. You can also refinance with a 203(k) loan to renovate your current home.
How much can I borrow with a 203(k) loan? Loan typeStandard 203(k) loanMinimum improvement cost$5,000Maximum improvement costLesser of Purchase price plus rehab costs, or 110% of the after-repair home value Jun 27, 2022
Credit score: Youll need a credit score of at least 500 to qualify for an FHA 203(k) loan, though some lenders may have a higher minimum. Down payment: The minimum down payment for a 203(k) loan is 3.5% if your credit score is 580 or higher. Youll have to put down 10% if your credit score is between 500 and 579.
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FHA 203(k) loans are also available to qualified borrowers for properties that have been damaged or even destroyed--FHA loan rules say Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.
Lenders require applicants to possess a credit score of at least 500. An FHA 203(k) loan requires a minimum down payment of 3.5% for those who possess a credit score of 580 or above, and 10% for those with a lower score. A 203(k) loan can only be used if the property is to be the borrowers primary residence.
Using an FHA 203k loan, you can borrow up to 110% of the propertys proposed future value, or the home price plus renovation costs, whichever is less. But keep in mind that your total loan amount cant be higher than your regions FHA loan limits, which is $2,095,200 in most parts of the country.

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