Combined, we make 44K a year, I have a 675 Experian credit score and husband is about 625, could we approve for an FHA 203b loan for new construction?

Asked by leopard.cara, 97016 Mon Dec 17, 2012

We have had a steady employment and housing for 4 years. I don't want to just ruin my credit by applying for a loan if its not possible. My husband wants to build himself (he's got experience) but every time I try and ask these start up questions, people just want to push me through the application process and I don't know if that is the smartest plan. I need to know, how long do we have to build it? Would the mortgage include the price of the lot? Do I need to have home plans before I can apply? Are there benefits for energy efficient plans? I am a first time applicant but my husband has owned a home before. Any help would be much appreciated, If there is a lender out there who, upon hearing our plan thinks it might be worth it to apply I would love to hear why. Thank you

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Priscilla Be…, Agent, Salem, OR
Mon Dec 17, 2012
I think a 203b loan is for new or existing. If you want to build, you need a construction-to-permanent-financing loan. You could call Washington Federal to see what they think about an owner-builder loan.

It looks like you might qualify for a total house payment around $1,000/month (unless you don't have ANY other scheduled monthly debt that shows up on a credit report). Total debt-to-income ratio for approval is 41-42%, typically. So, the house you buy or after-built price, depending on whether you are in a high property tax area, would be $125-150,000. That cost would include the lot, the city/county's systems development charges, plans, etc., and be a finished, move-in-ready home.

You might also want to contact Highline Homes, Adair Homes, or Reality Homes for package, stick-built homes.

There may be a 680 score limit on some lending programs, as well.

I also have a bank that has money available to help with loan down payment, closing costs, prepaids, etc.

Let me know if you need more information. Call me anytime 503-580-2941.
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Lana Lavenba…, Agent, Grants Pass, OR
Mon Dec 17, 2012
That question is best asked to a lender. I know that in some areas that would work ok for a renovation loan but a loan to build is different. They normally require you own the lot and have the improvements such as well, septic, power etc all in or if within the city that you have water/sewer etc all in. They will also require not just house plans but costs for everything in writing. Last I checked they allow 6 mos to complete a home build. If you go beyond that time frame - some banks might allow for an extension-others will just cancel the loan and call it all due and payable.
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