àThe FHA 203(k) program can be a great loan product for homebuyers looking to purchase a home in serious need of complete renovation or homeowners wanting to modernize an outdated kitchen, bathroom or other repairs of a property before they move in.
àFHA 203(k) enables borrowers to either purchase or refinance their home while including rehabilitation costs in the same loan.
àThere are two types of 203k loans: a standard and a streamlined. Standard loan programs need to be completed in six months and Streamlined must be completed in three months.
àAll Standard 203k loans borrowers must hire an FHA approved HUD Consultant – Direct Mortgage Loans permits for one General Contractor only.
|
|
STANDARD |
STREAMLINED |
|
Structural Changes |
YES |
NO |
|
Min/Max Repair Amount |
No Min & 50% of total after improvements value |
No min & up to $35K in escrow |
|
Landscaping/Hardscaping |
YES |
YES |
|
HUD Consultant |
YES |
Not required |
|
Mortgage Payments Financed |
Up to 6 months |
Not allowed |
|
Draws |
5 Maximum |
2 (initial and final) |
|
Initial Dispersement |
NO |
YES (50% of estimate) |
|
Max Completion Time |
180 days (6 months) |
90 days (3 months) |
Some things to remember:
1. Perfect for HUD REOs, foreclosures, and short sales.
2. Ideal for improvements to out-dated homes, kitchens, bathrooms, etc.
3. Homes with structural deficiencies, needing additions or expansions.
4. Refinancing allows for improvement instead of moving.
5. Great for necessary major/structural repairs.
6. Minimum credit score of 600.
7. Must be primary residences, attached or detached.
8. FHA approved condo’s
9. REOs, short sales, & foreclosures are included.
Thank you for taking the time to read my blog post!
For more information please visit my website at www.featherstoneco.com
Interested in selling? OR Interested in buying?
Attend our next home buying seminar…register now!
