However, making the dream of living in Volusia county a reality doesn't come easy-- you will have to part with about $340,000 to purchase a home.
Fortunately, the Federal Housing Administration (FHA) has a loan program that can help some eligible borrowers in Volusia County, Florida, to purchase a home and finance needed home repairs or renovations. The FHA 203k loan program can be used for single-family or multi-family homes.
What is the FHA 203K Loan?
The FHA 203k loan is a government-backed mortgage loan that allows homebuyers to finance the purchase and rehabilitation of property all in one loan. This is an attractive option for homebuyers because it offers them the opportunity to purchase a property that needs repairs or upgrades at a discounted price.
This loan program can be a good option for borrowers who may not otherwise qualify for a traditional mortgage because of having a lower credit score or a limited income. It can also be a good option for borrowers who want to finance needed home repairs or renovations at the time of purchase.
This loan is available in Volusia County, Florida, and can be an excellent option for purchasing a fixer-upper. If you're looking to finance the purchase of a home that needs repairs or to refinance your current home and make improvements, the FHA 203k loan could be the perfect loan for you.
The 203k loan can be used for a single or multi-family home. There are also specific guidelines and requirements that borrowers must meet to qualify. For instance, the home must be your primary residence, and you must meet the credit score requirements and have a down payment ready. Let's explore this in more detail...
FHA 203k Loan Requirements in Volusia County, Florida
Lenders will want to ensure that you fully understand all the eligibility requirements under this loan before you decide to apply. Here are essential eligibility requirements to keep in mind:
Credit Score Requirements
To qualify for the FHA 203k loan, you must have a minimum credit score of 580. This is a lower credit score requirement than conventional loans of at least 720. However, some lenders may require a credit score of 620 or 640, especially if you need a multi-family home.
In addition, you must be willing and able to provide a mortgage payment at least 30 days from when your loan application is approved. For instance, if your loan application is approved on January 15th, you must be able to provide a mortgage payment by February 14th. You must also prove that you can make your monthly payments by providing the lender with income verification.
Down Payment Requirements
If you plan on purchasing or refinancing your home with the FHA 203k loan, you will need to provide a down payment. The FHA 203k loan may be a good option if your down payment is less than 20%. However, you must have enough money saved to pay at least 3.5% of the purchase price of your home.
Not only will this provide an incentive for you to save money you can use towards purchasing or refinancing your home, but it will also ensure that you have the funds to make your monthly payments. You can also use other funding sources should you not be able to finance with a down payment. This may include a gift from a family or non-profit organization.
Debt to Income Requirements
When you apply for the 203k loan, the lender will use an income-to-debt ratio to determine your debt-to-income ratio. Your debt-to-income ratio determines your ability to make monthly payments on a home loan.
The income you provide on your mortgage application will be compared to the amount of debt you have, including car loans and credit card payments. This is done to determine your ability to make monthly mortgage payments.
The higher the income-to-debt ratio, the better; as such, you should provide a lender with an estimate of your gross monthly income compared to the amount of debt you have to ensure that your loan application will be approved. You will also want to factor in all necessary home repairs or renovations into this calculation and do not exceed what you can afford.
The FHA a203k loan must not be used for investment purposes. You must intend to live in the property as your primary residence.
You cannot purchase the home as an investment property to rent it out. In other words, you cannot buy a home using an FHA 203k loan and rent it out to a tenant to make money off of it.
The FHA 203k loan can be used to purchase a home with a loan up to$420,680. The property must also meet FHA lending requirements. In addition, the work you want to do on your home must not exceed the cost of the home.
If you purchase a $300,000 home and have an appraisal stating that your repairs or renovations will cost $25,000, your 203K loan will be approved after meeting the 3.5% deposit requirement.
The FHA 203K program allows you to use at least 10% of your gross monthly income towards your mortgage. Your mortgage payment amount for housing and other expenses depends on your location and lender requirements.
You must meet the minimum income requirement of $118,950 to prove that you will be in a position to repay.
You must be a US citizen or a permanent resident to qualify for the FHA 203k loan. Your citizenship status will be verified at the time of application.
If you are purchasing a multi-family home, at least one of the owners must be an eligible alien with an EAD (employment authorization document).
Types of FHA 203(k) Loans
There are two types of FHA 203(k) loans available. These include:
Standard 203k rehab loan
Typically, a 203(k) rehab loan covers extensive structural repairs that exceed $35,000. However, renovations must not cost more than $5,000, and a consultant from HUD must be hired to oversee the renovation process and the entire project. To comply with government code, you must follow select guidelines and rules.
The standard 203K rehab loan is used to purchase and fix up a property in which you will live. The extended 203K rehab loan can be used for commercial, mixed-use, or multi-unit properties.
Streamlined 203k rehab loans
The streamlined loan is designed to provide a quicker turnaround time and a streamlined application process for borrowers who are purchasing or refinancing their homes to do renovations.
How the FHA 203 (k) Loan Works
The FHA 203(k) loan combines your mortgage payments with your rehabilitation costs. The money needed for these repairs is not a traditional fixed- or adjustable-rate mortgage.
Instead, you make a down payment of at least 3.5% of the purchase price of your home, as well as pay monthly mortgage payments starting on or before 30 days after closing.
Here is the step-by-step guide to using the FHA 203(k) loan:
Find a lender - Partner with a lender that has experience working with FHA 203(k) loans. You can find a list of approved lenders on HUD's website.
Apply for your home loan - Make an appointment with a lender and submit your application. You will need to complete a loan application form.
Find a property - Visit properties that are up for sale and compare them to your home improvement plans. In addition, you must purchase a property within your budget and meets regulations for HUD.
Find an FHA 203k consultant - Locate a HUD-approved consultant who will help you with your project. They will be able to help calculate the cost of your repairs and complete the required reports for the FHA 203(k) loan.
Perform home inspections - Hire a professional inspector to inspect the property you intend to purchase. The inspector will provide you with a complete report of any problems that need to be addressed before closing.
Get the home appraised - The value of your home will be determined by an appraiser, who will also help you determine the total cost of all renovations.
Approve the mortgage - Show lenders your appraisal and inspection report and other necessary documents for approval.
- Finally, your loan will be granted, and the work of renovations by contractors can begin.
Are FHA 203(k) Loans Worth it?
The FHA 203(k) loan is a relatively new program established in 1977. Most people using the 203(k) loan have been surprised at how simple the application process is.
As with any loan, the 203(k) program has advantages and disadvantages. On the one hand, you might get more than what you expect and be able to purchase your dream home.
However, on the other hand, you might have to pay more than the mortgage statement indicates. You must completely understand how the loan works and decide if it will be worth it in the end.
Pros of a 203k Loan
Cons of a 203k Loan
203(k) Eligible Projects
FHA 203(k) loans are available to help with a wide range of renovations. These include the following:
- Improve a home's attractiveness or functionality.
- Rehab sewer and plumbing systems.
- Eliminate safety and other health hazards.
- Install or repair the gutters, downspouts, and roof.
- Improve key landscaping aspects.
- Replace or install the flooring.
- Improving home energy efficiency.
- Ensure easy accessibility for disabled persons.
How do I get an FHA 203(k) Loan?
The FHA 203(k) program can be confusing, with many steps and documents involved. However, it's vital that you remain focused and dedicated to making the process as simple as possible.
The first step is to find an FHA-approved lender. You must provide your Social Security number and other documents to verify your credit score, income, and debts. You must review your credit reports to ensure that all information is correct.
If you and the lender agree that your income and debt are sufficient, you can proceed with the application process. Consider your needs and profile; some lenders are a better match as they provide an exceptional experience for borrowers with lower credit scores.
While FHA 203k loans have lower closing costs, you may be required to pay higher appraisal and origination fees than conventional loans.
Top 5 Desserts in Volusia County, Florida
Volusia County is home to some of the best desserts in Florida. From fresh seafood to iconic key lime pie, there's something for everyone to enjoy.
When it comes to dessert, there are countless options to choose from; here are the top five dessert choices in Volusia County:
Chocolate chip cookies
When it comes to cookies, there's nothing quite like a classic chocolate chip cookie. The perfect combination of dough, sugar, and chocolate chips is always a top choice when looking for a sweet snack.
A staple in most bakeries, chocolate chip cookies is a must-have item when coming to Volusia County. With its crisp edges and soft, chewy center, the chocolate chip cookies found in these parts are so popular that they have spawned an entire festival to celebrate the cookie.
Key lime pie
Since the 1700s, Volusia County has been known for its iconic key lime pie. Made famous by the many restaurants in the area, this creamy pie is a staple on most menus. The incredible flavor of this filling makes it a great dessert choice.
The thin crust and delicate custard are sure to please even the most discerning individuals. Key lime pie is also high in vitamin C, which has long been known for its antioxidant properties.
The whoopie pie is a new favorite in the dessert world. This cookie sandwich is crammed with a creamy filling and made famous by the many bakeries around Volusia County. These treats are sure to please with their soft, airy centers and delicious icing.
There's nothing quite like a fresh apple pie from Volusia County. The perfect combination of tart and sweet apples is a staple on most restaurant menus. In addition to being a tasty treat, the fresh aroma of these pies is sure to please.
In addition to fantastic desserts, Volusia County is also home to some of the best seafood in Florida. Here are the top five seafood choices in Volusia County:
Oysters are an excellent choice for anyone looking for a hearty meal. With a perfect balance of sweet and salty with a smooth texture that's decadent and creamy, oysters are guaranteed to please even the pickiest seafood connoisseurs.
Grouper - a blend of sweet and spicy, grouper is one of Florida's more popular fish. Grouper is a highly sought-after fish with just the right amount of spice to balance its sweet citrus flavor.
Salmon is another popular seafood option in Volusia County. Flakey and flaky with a delicious sauce that blends sweet and savory flavors, salmon is a go-to dinner choice for most people.
Shrimp is also popular seafood. While it may not be as popular as other options, people seem to like the sweet flavor of the shrimp and its smooth texture. If you're looking for an unusual option, shrimp is an excellent choice for most people looking for a new way to get their protein.
- Swordfish is a popular option for most people when it comes to fish choices because of its tender texture and mild flavor. A great addition to almost any meal, swordfish is one of the more popular ways to get your daily servings of protein.
Apply for an FHA 203k in Volusia County, Florida and Enjoy the Perks of Living Here!
The FHA 203k loan can be a beneficial option for those looking to purchase a fixer-upper or refinance their current home and make improvements to it. It could be used as a second mortgage to help fund renovations or repairs on your home at the time of purchase.
There are many benefits to living in Volusia County. There's something for everyone in the area with beautiful beaches, wonderful golf courses, and incredible shopping. Whether you need an affordable way to remodel or refinance your home, an FHA 203(k) loan is an excellent option.