FHA Streamline 203k Renovation Loan
You find a great deal on a foreclosure but the carpeting is trashed, the owner stripped out the kitchen cabinets and copper pipes, and it looks like the windows have been blown out by a drive-by shooting...now what? The 203k program will allow you to purchase new carpets, windows, plumbing, and cabinets and roll the costs into the new mortgage. The loan amount will be based on the value after making the improvements to the home. The minimum amount of repairs is $5,000 and maximum is $30,000. Most first time home buyers don't have the cash or don't want to use or have access to credit cards to fix up the property and the 203k Streamline Rehab loan can turn a handyman special into your dream home. Below are pics of "Before" and "After" a Rehab:
I wish I knew about the 203k FHA loan when I bought my first house. My wife and I bought a charming Victorian which was 115 years old and it needed new siding, roofing, and windows and the cost was $25,000. Have you seen the movie the "Money Pit"? We had to use credit cards and all our savings to pay for the repairs because we did not know about the 203k rehabilitation loan. The Renovation loan is great for first time home buyers who want to buy a nice starter home and don't want to use their savings and credit cards to fix it up.
Some Advantages of FHA 203k Renovation Loan are:
- Must have minimum $5,000 repairs and remodeling costs and the maximum renovations are $30,000.
- Loans can go up to 110% of the after-improved appraised value!
- There is no 203(k) consultant involved. Repairs are usually based on contractor bids.
- Seller can pay up to 6% of the purchase price in closing costs
Use your Streamline program to add any of these repairs to the loan:
- Remodel-update bathroom and kitchen
- Repair-replace floors
- Upgrade roof, gutters, and downspouts
- Fix existing HVAC systems
- Update plumbing and electrical systems
- Paint-interior and exterior
- Weatherization-insulation, weather stripping, etc.
- Replacement Windows and Doors
- Upgrade appliances which may include ranges, refrigerators, washers/dryers, dishwashers, and microwaves.
- Rehab-replace decks, patios, and porches
- Basement finishing, remodeling, waterproofing which does not require structural repairs.
- Improve accessibility for disabled persons
- Structural repairs and improvements are not eligible.