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Can you get an FHA construction loan? What are the requirements? Who does them?

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September 05 2009 - Logansport
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@deckerdental

Additionally, since you own the home next to the lot, even if you did have a foundation that could accomodate a 203k loan, the fact you own a house next door would exclude you from gettin ga 203k loan.  You'd have to use a HomeStyle renovation loan to do the rehab on your investment property.  This product can be used for a 1-4 unit property or condo.
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May 21 2012
Yes, as stated earlier, the 203k requires the property be completed (and this is current as of when I write this) and have received it's Certificate of Occupancy for at least a year.  New construction FHA is eligible for FHA end-financing and still is today.

As for the conversion question, if the foundation was built sufficiently strong to accomodate a home being on top of it then it'd be acceptable but realistically, this is going to be a no-go...  What contractor builds a garage with this much concrete?  If the foundation is deep enough, it may be possible to dig some of the upper portions out to lay reinforced concrete but that's very iffy.

This is a difficult one.
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May 21 2012
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I own a lot that has a old 4 car garage on it, next to the lot my house sits on.  Can you use the 203k program to convert a structure like that to a home using the 203k program?

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December 28 2011
Important to note:  203k Loans can only be used on existing properties, not true new construction.  Specifically, the home must have been built and CO'd for at least 12 months before a 203k loan can be used with it.  If a borrower wants to build a home from scratch, they must obtain a construction loan + an FHA end loan (if they want to incorporate FHA financing) and cannot use 203k renovation financing.

Hope that helps clarify things, Cheers!
Joe
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November 18 2009
Yes,
Our bank is one of the very few that offers a true construction loan with a regular FHA 203b end loan, with just one loan application.  We fund both the construction loan and FHA end loan in-house at our bank.  We offer up to 96.5% LTV, and credit scores down to a 620+ middle score.  If you'd like to learn more or apply now, please feel free to contact me at my website [self-promotional post, removed by moderator]

Thanks!
Joe
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October 20 2009
Bengelchen,

This construction-permanent loan no longer is offered for FHA endorsement. In regards to reference of the Energy Efficient Mortgage within the context of the Section 203(b) Standard FHA mortgage program, new construction is simply HUD's way of defining a home that has been completed within the last 12 months and has never been occupied.

Unfortunately, you are seeking out a true construction loan. In this present housing market, construction loan financing has disappeared especially since Colonial National went belly up. Even if this program was still available you still have another hurdle.

If you are in the state of Indiana maximum FHA insured loan you could get would be from $271,050 up to $410,000 depending on the county of the residence. This is shy of the dollar amount that you reference.

Best advice is to speak with a local bank who is famaliar with your local market. One popular option for smaller banks is to collateralize the new loan with a personal CD/IRA account that you would establish with the bank. Once the home is complete, you could pursue finance options as a refinance.
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September 16 2009
FHA does not have a new constructin loan program.  A 203K allows you to finance rehabilitation costs.
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September 05 2009
I think this may fit your needs http://www.hud.gov/offices/hsg/sfh/eem/energy-r.cfm ..... Best wishes, Rudi
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September 05 2009
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Actually were thinking about building  a Green home, we have 60,000- total construction cost including land might end up being between 500.000 to 600.000. 
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September 05 2009
You may be thinking of a FHA 203k rehab loan, which allows you to build in the rehabilitation costs of a home.  You can buy a home that needs work done or refinance.
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September 05 2009
 
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