Home Buying in Elkton>Question Details

Katrina, Real Estate Pro in Randallstown, MD

Is it possible to get a FHA 203k loan with a house that has some mold? Around 25-35k for RENO?

Asked by Katrina, Randallstown, MD Thu May 3, 2012

My husband and I really like this one house for sale, but he has a low credit score around 607 as of March. We didn't pay anything major off but paid everything on time since then. Anyways, we were told we'd qualify for a ARM 5 FHA loan only. We only would have the 3.5% to put down for a 100k or less home. So, this house, has mold, but cheap. Can we do a 203k FHA loan, maybe with 30k for the RENO? And what about the credit score... are we screwed? I have a 700 score, but I'm a stay at home mom with no income. Thoughts?

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As others have indicated this probably isn't the perfect time for you to be buying. Work on those credit scores and paying everything on time. And keep looking to see if you can find something that doesn't need mold remediation. If the property is that inexpensive and hasn't been snatched up by an investor there is probably a reason.
0 votes Thank Flag Link Fri May 4, 2012
The lenders will only look at your husband's credit score, your need to be employed for at least two consecutive years. His credit score will need to be a minimum of 640, along with other financial guidlines. I personally would stay away from a 5 year ARM. Those ARMS got a lot of people into trouble with their ARM adjusted.
0 votes Thank Flag Link Thu May 3, 2012
Hello,

You need a 640 middle FICO score in order to qualify for a FHA 203k Loan with most banks. The FHA 203k loan calculates the 3.5% down payment by taking the purchase price ($100,000) plus the repair escrow ($30,000) so total would be $130,000. You would need 3.5% of the $130,000 not the purchase price of $100,000.
I would suggest having someone look at your husband's credit that could tall him what he needs to do in order to improve his score to 640. Shouldn't be too hard to get from a 607 to a 640. If you would like me to review, give me a call at 410-412-3319 or you can send me an e-mail at jthomas@primeres.com

You can regsiter for the next Free Maryland Home Buyer Seminar on June 30, 2012 at http://www.MarylandHomeBuyerSeminars.com

John R. Thomas
Certified Mortgage Planner - NMLS 38783
Primary Residential Mortgage
410-412-3319 MD Office
302-703-0727 DE Office
0 votes Thank Flag Link Thu May 3, 2012
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