Frequently Asked Questions

 How do I know how much house I can afford?


How is an index and margin used in an ARM?

There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. Mortgage One Solutions can help you evaluate your choices and help you make the most appropriate decision.

What does my mortgage payment include?
Principal: Repayment on the amount borrowed
Interest: Payment to the lender for the amount borrowed

How much cash will I need to purchase a home?

We only require the most recent two months of bank statements. 
HUD 4155.1 Chapter One Section B states, “At loan closing, all documents in the mortgage loan application may be up to 120 days old, or 180 days old for new construction.
As a general rule any requested documents would need to be no older than four months–but that doesn’t mean the information contained in those documents can’t be older than that.

What is the FHA?

The U.S. Federal Housing Administration (FHA) was established in 1934 to improve housing conditions and ownership opportunities for Americans. Since that time, the FHA loan programs have been used to finance more than 40 million homes.

During the 1940’s, the FHA played a major role in housing our military as well as returning veterans and their families. In 1965, the FHA was set up under the management of Housing and Urban Development (HUD) and went on to deliver programs leading to the construction of millions of apartments to meet the needs of the elderly, handicapped and lower income Americans.

Today, FHA insured loans increase in popularity as more and more Americans become aware of the benefits of this powerful U.S. government backed program.

What is an FHA loan?
The FHA does not actually provide mortgage funds, but instead provides lenders with insurance that protects them against losses in the event of homeowner mortgage default. This reduces the lenders’ risk, allowing them to offer loans to buyers with less than perfect credit and with lower down payments. Lenders must follow specific guidelines established by FHA to assure qualification for insurance.

How is the FHA funded?
The FHA is funded entirely by proceeds from mortgage insurance included in the mortgage payments. As a result, the FHA is the only government agency that is entirely self-funded – operating at no cost to the American taxpayers! Additionally, the home construction and community development driven by FHA programs stimulate the economy through job creation, tax revenues and more.

What are the benefits of an FHA loan?
The FHA identifies the following benefits:

  • Low cost -- FHA-insured loans have competitive interest rates because the federal government insures the loans for lenders.
  • Smaller down payment -- FHA-insured loans have a low 3.5% down payment and the money can come from a family member, employer or charitable organization as a gift.
  • Easier qualification -- Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.
  • Less than perfect credit -- You don't have to have perfect credit to get an FHA-insured mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA-insured loan than a conventional loan.
  • More protection to keep your home -- The FHA has been helping people since 1934. Should you encounter hard times after buying your home, the FHA has many options to keep you in your home and avoid foreclosure.

    What are FHA loan limits?
    The FHA sets limits on the maximum amount of loan funds available to a borrower relative to housing costs in a given area. In areas of the country with lower home values, limits are currently set at a maximum of $271,000 while in other areas, these limits go as high as $729,750. Even if your credit worthiness and income would allow you to afford a larger mortgage, your lender will not allow you to exceed the regional limits established for an FHA loan. To determine the current limits for your area, visit https://entp.hud.gov/idapp/html/hicostlook.cfm.

    What is an FHA 203k Loan?




    What are the types of FHA 203k loans? 


    Your REbuildUSA 203k Specialist™ and your FHA approved lender will help you determine which loan is the best choice to meet your needs.

    What improvements are eligible under the Streamlined 203k?

    • Repair/Replacement of roofs, gutters and downspouts
    • Repair/Replacement/upgrade of existing HVAC systems
    • Repair/Replacement/upgrade of plumbing and electrical systems
    • Repair/Replacement of flooring 
    • Painting, both exterior and interior
    • Accessibility improvements for persons with disabilities
    • Repair/replace/add exterior decks, patios, porches
    • Basement finishing and remodeling, which does not involve structural repairs
    • Basement waterproofing
    • Window and door replacements and exterior wall re-siding
    • Septic system and/or well repair or replacement

      What items are ineligible for the Streamlined 203k?

      • New construction (including room additions);
      • Repair of structural damage;
      • Repairs requiring detailed drawings or architectural exhibits;
      • Landscaping or similar site amenity improvements;

       Mortgagors may not use the Streamlined 203k program to finance any required repairs arising from the appraisal that do not appear on the list of Streamlined 203k eligible work Items or that would:

      • Require plans or architectural exhibits;
      • Require a plan reviewer; 
      • Require more than six months to complete;

        Can the 203k program be used on only single-family homes?

        How is the home appraised?

        Can a 203k be used to purchase a HUD-owned property?
        A 203k loan can be used to purchase a HUD-owned property that is determined by HUD to be eligible for a 203k. If other funds are used for the purchase, a 203k loan can be made up to six months following the purchase, allowing cash back to the owner.

        Is the 203k program allowed for use by investors?

        Can an Energy Efficient Mortgage (EEM) be used in conjunction with the 203k?

        How are loan funds disbursed for the purchase and renovation?

        Is a borrower allowed to do the rehabilitation work?

        What if there are extra funds after renovation?

        Is there a time limit for the renovation?

        What if the home is not habitable during renovation?
        The Standard 203k loan does allow for up to six mortgage payments to be included in the renovation funds to cover the period when the home is uninhabitable during renovation. A Streamline 203k, however, cannot be used if the home will not be habitable at any time during the renovation.