No, the FHA 203K loan could not be used in that situation. For an FHA 203K, there is no cap on the dolalr amount of repairs that can be made. There is a limitation on the property though. In order to be able to do an FHA 203K Renovation mortgage, HUD requires that a Certificate of Occupancy (CO) must have been issued at least 12 months prior. Homes not meeting this CO requirement would not be eligible for FHA financing.
If you find a lot that contains the foundation of a previously occupied home, then yes, an FHA 203K mortgage could be used to build a new house so long as a major portion of that existing foundation is used.
A true construction mortgage would be about your only option. We do offer another Renvoation loan program, but that one would require the home to at least be at the sheetrock stage.
Rodney Mason, NMLS #151088
Sr Loan Officer
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.
Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePathÂ® | HomePathÂ® Renovation | HomeStyleÂ® Renovation | VA | USDA | GA Dream | Jumbo Financing.