FHA 203(k) Loan
Your dream home may not look like it at first, but the FHA 203(k) loan may be the answer.
Today's home buyers want move-in ready homes, but they are also drawn to the bargain pricing of the many distressed properties on the market. Many buyers say they don't want a home that needs a lot of work.
Are you repeatedly considering listings you've found for charming older homes but have avoided because of needed repairs? The FHA 203(k) enables borrowers to either Purchase or Refinance their home while including rehabilitation costs in the same transaction.
Renovation funds get bundled into your mortgage under one loan, so you only make one monthly payment. FHA minimum 3.5% down makes purchase and remodel affordable for qualified properties.
• Automated underwriting (to 580 credit score.)
• Max renovation amount calculated by repairs / renovation + price less down payment (subject to appraisal.)
Standard FHA 203(k)
• Total renovation costs can exceed $35,000 ($5,000 minimum in HUD repairs with no limit)
• Improvements to outdated homes, kitchens, bathrooms and structural deficiencies
• Additions and expansions: IMPROVE instead of move!
• All-in-one loan used for minor non-structural repairs • Allows for improvements or upgrades of up to $35,000 in repair escrow
• There is no minimum requirement for repair costs.
Limited FHA 203(k)
• All-in-one loan used for minor non-structural repairs
• Allows for improvements or upgrades of up to $35,000 in repair escrow
• There is no minimum requirement for repair costs
• 1-2 Unit Primary Residences
• Planned Unit Developments(PUD) and FHA approved condos
• HUD Code Manufactured on permanent foundation (qualifying)
• 15 year fully amortized
• 30 year fully amortized
What type of homes may benefit?
• Distressed Properties Those that were in foreclosure or short sales that may have been neglected and in need of repairs.
• Fixer Uppers Homes that are In need of more than Just a few minor fixes These homes may need big renovations or structural repairs such as a new roof. etc.
• Older Homes Homes that have been around a while that need some updating are good candidates for renovation loans
• Owners of older homes can use these loans to make the home more livable by adding more space. replacing outdated carpeting. installing energy efficient doors and windows etc.
• Homes for Disabled/Elderly Owners can install a wheelchair ramp. grab bars. lower counter tops or a wheelchair accessible shower.