Posted on: 06th Jul, 2010 09:33 am
I own some land that I plan on building my first home on. I have 634 experian and equifax credit score and a 642 transunion. The land has been appraised at around $15,000 and I have about $3000 for a downpayment. Do you all think I will be able to get a loan for 30,000 to 35,000 to build a home. I will hopefully be able to use the land as some collateral and the $3000 down. I know FHA is pretty strict right now and I am a little worried about getting the loan. Any info would be quite helpful!
FHA does not offer ground-up construction loans, they do offer rehab loans for homes that have been completed for at least 1 year. The construction loan you'd need to qualify for would be a conventional one, and usually they require at least 10-20% down payment on the total cost of the project (cost of land + cost of building the home). Further they normally require pretty good credit, the ones I've seen advertised need at least 660-680 credit scores, and with less than 20% down need 720 scores. You may find a local community bank who is insuring their own loans that will be OK with lower scores, but I suspect even 635 scores could be too low.