Finance
In New York, the 'Section 203(k)' FHA loan program is used for:
AFirst-time homebuyer assistance only
BPurchasing and rehabilitating (renovating) a property with a single loan✓ Correct
CCommercial property acquisitions
DRefinancing only
Explanation
FHA Section 203(k) allows borrowers to finance both the purchase and rehabilitation of a home with a single FHA-insured loan. It is particularly useful for buying fixer-uppers 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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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