Finance
A New Mexico buyer uses a 203(k) rehabilitation loan. This is a program offered by:
AUSDA Rural Development
BVeterans Affairs
CFHA (Federal Housing Administration)✓ Correct
DFannie Mae
Explanation
The FHA 203(k) rehabilitation loan combines the purchase price and renovation costs into a single mortgage, helping buyers finance the purchase and rehabilitation of older or distressed properties.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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