FHA Disaster - 203h Loan

The section 203h mortgage loan provides FHA insurance to qualified disaster victims who have lost their homes and are in the process of rebuilding or buying another.

Individuals are eligible for this program if their homes are located in an area that was designated by the President as a disaster area and if their homes were destroyed or damaged to such an extent that reconstruction or replacement is necessary.

Section 203h loan features:

1. The borrower is eligible for 100 percent financing as no down payment is required. Closing cost expenses must be paid by the borrower in the way of cash, premium pricing through the lender (a higher interest rate equals bigger profits for the lender, allowing them to pay all or part of your closing cost) or seller concessions up to 6 percent.

2. May only be used for the purchase or reconstruction of a one-family home that will be the principal residence of the homeowner.

3. Many closing costs can be financed into your FHA mortgage loan. With most conventional mortgages, the borrower must pay, at the time of closing, costs equivalent to 2-3 percent of the price of the mortgage loan.

By allowing the borrower to finance many of these charges, the borrowers upfront costs are reduced significantly when buying a home at Andalas Tourism.

4. FHA rules put limits on some of the fees charged by your lenders. For example, the mortgage origination fee charged by the lender may not exceed 1% of the amount of the mortgage and the tax service fee is not allowed.