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FHA Homes Loan Program Gaining Popularity in Illinois

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By : John Cutts    99 or more times read
An FHA homes loan program is reportedly getting a lot of attention from regular homebuyers in Illinois. The Federal Housing Administration's (FHA) initiative used to be associated more with housing agencies and nonprofit organizations. However, difficulties in the credit market have brought the program to the attention of individual buyers.

According to local realtors, the 203(k) program assists homebuyers who want to purchase distressed homes in Chicago and in other areas of the state by requiring a down payment of only 3.5%. The program helps those buyers who wish to purchase foreclosed or distressed houses that other lenders will be unlikely to finance. Under the loan program, buyers are also provided with funds to finance repairs needed for the property they are going to purchase.

Homebuyers who have purchased houses with the help of the agency's loan program stated that the initiative not only helped them acquire a new home, but it also contributes to lessening the number of distressed homes in Illinois that are bringing down the values of nearby properties. However, local realtors warned that a lot of paperwork is required before a homebuyer can get approval from the agency.

They revealed that the lender, contractor and realtor involved in the purchase of FHA homes should be familiar with the program, particularly because the federal agency requires specific details to be included in the bidding documents. FHA also requires repair work to be completed within a six-month period, which is beneficial to homebuyers, but can be a problem for a contractor that does not have strength to finish work within that time limit.

Another concern is that there are only a limited number of contractors allowed to work on distressed properties for sale that are being financed by the 203(k) program. In addition, lenders offering the loans are also not that many. This, realtors stated, had discouraged most homebuyers from seeking the program's help to finance a home purchase.

However, with financing becoming increasingly difficult to acquire, more homebuyers are turning to the FHA homes lending program. According to realtors, for those who cannot find a traditional lender, this initiative often provides them with the assistance they require to be able to purchase their own house.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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