How to Use a Streamline-K Loan for Buying Fixers

In distressing news this week, the Bush administration says a 73-year American tradition -- the FHA loan program -- is in jeopardy and is expected to fall into the red for 2008. FHA insures loans; it doesn't fund them. Two factors are pulling the FHA mortgage insurance fund under water: the increase of mortgage defaults and the decrease of mortgage applications.

The Bush administration's solution seems to be that FHA should charge borrowers higher premiums, ignoring the fact that your parent's parents, your parents and possibly even YOU bought your first home through the FHA loan program. It was established to provide a low-cost loan program for first-time home buyers who may not have established a long credit history. Many borrowers today rely on this program to get into their first home.

We can only hope that Congress will pass an FHA reform bill this year, even though such a bill was rejected last year.

If not, this might be the last year that home buyers can obtain a Streamline-K loan. For now, FHA will let home buyers borrow up to $35,000 for repairs when buying a fixer through this simple and easy-to-get loan program.

Ready to Read More Articles? Click below:

• Basics of an FHA Loan
  
• Buyer's Closing Costs
  
• Should You Get an Impound Account?

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