203K LOAN ELIGIBILITY STANDARDS
The 203k loan is an FHA-backed home loan, and follows the eligibility standards of a standard FHA mortgage.
For example, borrowers are expected to document their annual income via federal tax returns and to show a debt-to-income ratio within program limits. Borrowers must also be U.S. citizens or legal residents of the United States.
And, while there is no specific credit score required in order to qualify for the 203k rehab loan, most mortgage lenders will enforce a minimum 580 FICO.
Like all FHA loans, the minimum downpayment requirement on a 203k rehab loan is 3.5 percent and FHA 203k homeowners can borrow up to their local FHA loan size limit, which reaches $625,500 in higher-cost areas including Los Angeles, California; New York City, New York; and, San Francisco.
Furthermore, 203k loans are available as fixed-rate or adjustable-rate loans; and loan sizes may exceed a home's after-improvement value by as much as 10%.
The 203k construction loan can be used in conjunction with other FHA programs including the Good Neighbor Next Door (GNND) program which allows $100 down on a home; the Back to Work program for borrowers with a recent bankruptcy, short sale or foreclosure; and the FHA's Energy Efficiency Mortgage program.
Article from: http://themortgagereports.com/