Remodeling your home is a great way to potentially increase its value and get the home you have always wanted. From updating the kitchen, finishing the basement, and opening up the living room, remodels Up Next: Home Repair: Hire A Professional Or DIY? When it comes to financing your home remodel, you may find yourself […]
Understanding Federally-Related Mortgages in KC
During your mortgage shopping experience, you may hear your loan officer mention certain requirements for federally-related mortgages in KC. For instance, loan officers are required to produce an HUD-1 statement for federally-related mortgages but not necessarily for other home loans.
While the exact definition of a federally-related mortgage may sound convoluted and confuse anyone outside the mortgage industry, the basic qualifications for federally-related mortgages in KC can be outlined relatively simply. All federally-related mortgages must be permanently financed, include a residential property, and be regulated by a government agency.
Mortgages in KC can be divided into two categories: temporary financed and permanent financed. If your debt will be paid in less than a year, it is considered “temporary financing,” and is exempt from some of the requirements of a federally-related mortgage. However, if your mortgage pay-off period exceeds 12 months, it is considered a “permanently financed mortgage” and may be eligible for federally-related mortgage policies.
Much like mortgages in KC, Kansas City property can also be divided into two categories: commercial and residential. Commercial property is developed primarily for business and mortgages for commercial property are typically not federally-related. However, certain types of residential property, or property developed for living purposes, may be subject to federally-related mortgage requirements.
Improved Residential Property
One type of residential property that is eligible for a federally-related mortgage in KC is an improved property. Generally, any building constructed on your land is considered an improvement. However, for a residential property to be considered officially “improved” by the federal government, it must have certain utilities and services such as:
- Other capabilities
These utilities add value to the property, therefore “improving” it.
Construction of 1-4 Family structures
You may also be able to use federally-related mortgage in KC for the construction of a new home or 1-4 family structures.
Mortgages Regulated by a Government Agency
If your mortgage is regulated by a government agency, it is most likely a federally-related mortgage. The most common government agencies are:
- Federal Housing Administration (FHA)
- Veterans Administration (VA)
- Federal National Mortgage Association (FNMA)
- Federal Home Mortgage Corporation (FHLMC)
However, even if your mortgage is not directly related to one of these institutions, your lender may still be backed by a government agency. Always talk to your loan officer if you are unsure about your home loan’s status.