FHA 203K program

Did you know that you can purchase a property and include up to $35,000 in rehabilitation costs in the loan through an FHA 203K program? This program is designed to give homebuyers and homeowners the opportunity to improve their homes including making them more energy efficient. The streamlined 203K program is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required. Some of the common repairs that you can utilize this program for are: repair/replacement of roofs, repair, replace or upgrade HVAC systems, remodeling kitchens, interior and exterior painting, weatherization and the purchase and installation of appliances.

The FHA 203K loan is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities.

The 203K program will allow you to repair, replace or add exterior decks, patios, or porches.

You can utilize the 203K program to make accessibility improvements for persons with disabilities.

Along with EEM (Energy Efficient Mortgage) you can remodel your home to make it more energy efficient. These upgrades include storm windows and doors, insulation and weather stripping.

Given the need for homeowners to make minor repairs without exhausting personal savings, and in consideration of the increasing cost of materials, the minimum repair cost of $5,000 has been eliminated and the ceiling is now raised to $35,000.

The streamlined(K) program is also available for mortgage refinance transactions including those where the property is owned free-and-clear.

On 203K loans that do not exceed $15,000 in repair costs, the lender is not required to perform or have others perform inspections of the completed work.

Don’t overlook a good property that only needs some tender love and care to make it in to everything you would desire a house to be. The 203K program gives homeowner’s and homebuyer’s the opportunity to take a good house and make it great.

Many lenders have successfully used the Section 203(k) program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. These lenders, along with state and local government agencies, have found ways to combine Section 203(k) with other financial resources, such as HUD’s HOME, HOPE, and Community Development Block Grant Programs, to assist borrowers. Several state housing finance agencies have designed programs, specifically for use with Section 203(k) and some lenders have also used the expertise of local housing agencies and nonprofit organizations to help manage the rehabilitation processing.

Whether it is that fantastic foreclosure deal, adding that new deck, getting rid of that shag carpet, saving the purchase deal that the bank turned down due to property condition or making that simple change that turns an ordinary home into your dream home; FHA 203K can help you.

Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made. In the current market many of the numerous foreclosures sit on the market in disrepair due to vandals, theft and neglect. To lenders of traditional loans those properties are considered poor collateral that they’d prefer not to lend on. However, for FHA 203K loans the loan is based on after repair value and includes an escrow account to complete the repairs needed to bring the house to a condition that lenders prefer. That means that the current condition of the property is not as important on 203K rehab loan as the condition of the property once the 203K renovation is complete. This provides an outlet to purchase dilapidated properties, many of which have spent extended periods on the market due to the lack of availability to traditional financing, and solves the problem that most lenders face when dealing with property in disrepair. What this means to the home buyer is generally a significant discount to “as-is” value and, quite often, a fantastic deal on a house.

The easiest and quickest version is the FHA 203K Streamline. This loan is for repairs under $35,000 that do not involve any kind of structural renovations. For Streamline FHA 203K’s you will have two draws. Generally, the lender will release 35-50% upfront and 50% when the work is completed. On most of these the lender will require a final inspection to make sure the work is complete, but on some of the simpler 203K rehabs you can provide receipts showing materials have been purchased and that will be sufficient.

www.203Kloan.net is where I received the last 3 paragraphs. Let me know if you need more.