Vermont FHA Loan
If you are thinking of buying property in Vermont, then you will need Vermont FHA mortgage. According to a census data accumulated for the year 2000, there were 294,382 housing units in Vermont in 2000 as compared to 271,214 in 1990, which is an increase of 8.5%. Out of these there were 98,720 located in the urban area and 195,662 located in the rural area. The homeownership rate in Vermont is about 70.6% as of today and the vacancy rate including seasonal lodging stands at about 18.3.5%. The average household size in Vermont is 2.44 people and most of the houses, apartments and condos were built after 1967.
A Vermont FHA loan might just be the kind of loan you need. Your down payment will be as low as 3.5% of the home purchase price and most of your closing costs and fees are included in the Vermont FHA loan. This loan is available on 1-4 unit properties. The eligibility criteria for a Vermont FHA mortgage are:
- As a borrower you must meet the standard FHA credit qualifications.
- As a borrower, you will be eligible for approximately 97% financing. As a borrower, you will also be responsible for paying the annual premium.
Vermont FHA has a loan that will allow you to buy a home, fix it, and include all other costs within just one loan. If you own a home that needs to be re-modeled or repaired, then you can refinance what you owe and add the cost of repairs in just one loan.
FHA in Vermont provides funds for Handyman-Specials as well as Fixer-Uppers. If you are buying a house that needs repair then in all probability the bank won't lend you any money to buy the house until the repairs are complete and the repairs can't take place till you actually buy the home. So it is like a catch-22 situation.
The FHA's 203(k) program can be a lot of help if you are thinking of purchasing a home that may need repairs. A 203(k) plan is available with a Vermont mortgage lender and it will allow you to purchase or refinance a property and include all the costs in the loan with the cost of repairs and improvements. The FHA insured 203(k) loan is provided through an approved mortgage company in Vermont and is available to all home buyers who fulfill the FHA eligibility criteria. The down payment required for an owner-occupant or a nonprofit organization is approximately 3.5% for the acquisition and repair costs of a property.
To be able to get a 203(k) loan, you will have to follow these steps:
- As a potential home buyer, you can locate a fixer-upper and execute a sales contract after doing the feasibility analysis of the property. This can be done with a real estate professional. The contract needs to state clearly that you as a buyer is looking for a 203(k) loan
- The contract is contingent on loan approval based on additional required repairs by the FHA or the lender.
- As a home buyer, you can then select a Vermont FHA approved 203(k) lender who will then arrange for a detailed proposal, which will outline the entire scope of work that needs to be done and include a detailed cost estimate for each repair in the project.
- Based on the above, FHA in Vermont will carry out an appraisal to determine the value of the property post renovation.
- If you as a borrower pass the lender's credit-worthiness test, then the loan will be closed for the amount that you have applied for or that covers the cost of purchase or refinance of the property. This will also include the cost of remodeling and closing costs. The amount of the Vermont FHA home loan will also include a contingency reserve of 10% to 20% out of the total remodeling costs and this can be used to cover any extra work, which has not been included in the original proposal.
- At the closing, the seller of the property will be paid off and the remaining funds will be put in an escrow account so that it can be used for the necessary repairs and improvements during the rehabilitation period.