FHA Loan - Conflicting Information

[Ori Holzman]

Hey good evening :) 

I've been receiving conflicting info on the FHA fees, or maybe I'm just confused. Is there an upfront cost as well as well as a monthly premium? How are each of them calculated?

I am currently looking into a house hack opportunity in Connecticut. The loan would probably be about $200,000. What would be the breakdown in cost? (In reality, the purchase price is about $150,000 with another $50,000 in construction. I understand construction loans have a whole different set of rules, but I'm trying to keep it simple, to better understand the FHA fees.) 

Thanks for your time! 

[Christopher Phillips]

Originally posted by @Ori Holzman:

Hey good evening :) 

I've been receiving conflicting info on the FHA fees, or maybe I'm just confused. Is there an upfront cost as well as well as a monthly premium? How are each of them calculated?

I am currently looking into a house hack opportunity in Connecticut. The loan would probably be about $200,000. What would be the breakdown in cost? (In reality, the purchase price is about $150,000 with another $50,000 in construction. I understand construction loans have a whole different set of rules, but I'm trying to keep it simple, to better understand the FHA fees.) 

Thanks for your time! 

FHA loan like any loan has a down payment based on the % of the total borrowed. There are closing fees based on lender related fees, 6 months property tax and 12 months home owner's insurance for escrow. With FHA, there are upfront and monthly mortgage insurance payments.

A construction loan is when you're building a new home from scratch. Sounds like what you want is a rehab loan, which would be an FHA 203K loan that includes the purchase and the rehab funds combined.

Part of a 203K includes consultant fees to help with the project and a contingency for budget overruns.