A Texas license holder is working with a buyer who wants to use an FHA 203(k) rehabilitation loan to purchase and renovate a property. Under FHA 203(k) guidelines and Texas law, which statement is correct?
Correct Answer
A) The FHA 203(k) loan finances both the purchase and renovation costs in a single loan, secured by a Texas deed of trust, and both spouses must sign if it is a homestead
FHA 203(k) loans combine the purchase price and renovation costs into a single mortgage, secured by a deed of trust in Texas. Texas homestead spousal consent requirements apply. The down payment is based on the total loan amount (purchase + renovation costs), typically at 3.5% minimum.
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Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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