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Owning a House with Mortgage Loan

Buy a House with FHA’s 221d4 Loan

Owning a House with Mortgage LoanWould you like to own a house on with a long mortgage term? Federal Housing Administration 221(d)(4) or an FHA 221d4 loan makes this possible for qualified borrowers. According to, one of the purposes why this loan was established was to make capital more accessible to moderate-income families. This capital will then be used for the construction of rental or cooperative housing. For those who are qualified, getting approved for this loan opens a whole new world of opportunities.

Long Mortgage Term

According to the US Department of Housing and Urban Development, this loan program allows up to a 40-year mortgage fixed rate term. The financing will be handled by the Government National Mortgage Association MBS or Mortgage Backed Securities. Since the loan term is long, you can expect your monthly amortization to be quite affordable.

Other Benefits

Aside from a long mortgage term, you can even have 80 or 90 percent of the property’s cost estimate financed. They will also grant you a fixed interest rate while your property is constructed. You also get to enjoy non-recourse financing from day one of the loan term. There is only one closing, where the construction loan can be converted to permanent financing. This minimizes interest rate risk and also eliminates the need for multiple fees. You can also convert about 10 percent of the total floor area and turn it into an area for commercial activities.

The Requirements

The terms of this loan program are very beneficial, especially to low-income families. Unfortunately, like many other housing programs of the government, you must be prepared to face the paperwork and waiting period. The paperwork is time consuming and sometimes, you have to be prepared to wait for at least one year for your application to be approved. In this situation, you would be better off working with an FHA 221d4 loan consultant to ensure that you are still on the right track. Having an expert was an advantage for some because their approval time was cut short by two months. Though it may not be much, at least you get to be approved in a much shorter time. If you believe you are qualified to apply for this program, then check the Housing and Urban Development website. Check out their application process and prepare all the necessary documents. It will also be to your benefit to get in touch with a loan consultant to help you out every step of the way.
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