FHA/203K LOANS

An FHA 203k loan is a renovation loan for an existing 1 to 4 family home that the borrower intends to occupy as their primary residence.

Advantages of a 203k loan:

• All construction costs including plans and permits are included
• The borrower only needs a 3.5% down payment
• Interest rates are competitive
• The loan is guaranteed through the FHA
• 203k loans are the only commonly available resource for construction loans

Advantages of 203b or regular FHA loans:

• 3.5% down payment
• All funds in the transaction can be gift
• County or Municipal grants for down payment and closing costs accepted
• Marginal credit accepted
• Higher debt to income ratios accepted

SunQuest Funding has extensive experience with FHA loans.  We are one of the top providers of 203k loans in New Jersey.  Our management team has over 40 years of combined experience handling FHA financing. You can depend on the professional, experienced staff at SunQuest Funding for a positive experience during a stressful transaction.

What is an FHA mortgage?

The FHA (Federal Housing Authority) was created by the Federal Government under the national housing act of 1934 to improve housing standards and conditions and to provide affordable housing financing for qualified borrowers. Today, through their FHA mortgage loan and FHA 203k loan programs, millions of people are enjoying home ownership. The FHA insures 100% of an FHA mortgage, thereby eliminating the lender's risk. In New Jersey, FHA mortgage stipulations are the same as across the country. The borrower pays an upfront insurance premium that is approximately 1.5% of the FHA mortgage or 203k loan amount. It is possible for this premium to be financed directly in the loan amount. The borrower also pays a monthly premium of .5% of the FHA mortgage loan amount divided by 12 months. FHA mortgages and FHA 203k loans require down payments of 3%.

In New Jersey, FHA mortgage options are a very popular route for the first time homebuyer to take, but it is not a program that is developed or reserved specifically for first time homebuyers. Today, the FHA also plays a critical role in financing for minority borrowers, borrowers who have troubled credit history and borrowers who have little money to put down on a home. Also, buyers are not limited to purchasing only their first home under FHA mortgages or 203k loans. A buyer can buy a third or fourth home with an FHA mortgage or an FHA 203k plan. The only stipulation is that you may only have one FHA loan at a time.

Borrowers are required to show proof of sufficient income to demonstrate the ability to pay the FHA mortgage loan. In an attempt to make the buying process available to more people, the FHA has relaxed guidelines that include: bankruptcies that were discharged at least 2 years ago, the use of alternative credit (utilities, cable TV, auto or medical insurance premiums, child care, school tuition, consumer store accounts) in lieu of traditional credit, and higher debt to income ratios. Also, interest rates for FHA mortgages and 203k current loan rates are extremely competitive with conventional rates.

Still looking for more information on New Jersey FHA mortgage or FHA 203k. Contact us and we'll be happy to discuss any questions you may have.

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