Finance Your Home Renovation with an FHA 203k Mortgage Loan

Finance Your Home Renovation with an FHA 203k Mortgage Loan

Feb 15, 2018 (0) comment

Do you want to purchase a home that requires repair, but you don’t have the money? An FHA 203k loan is the right loan for you! An FHA 203k loan is a rehab loan that provides funds not only for purchasing a house, but also for remodeling. It’s the best mortgage loan if you’re planning to buy a house that needs some repairs. If the previous homeowner didn’t keep the house in good condition or the renters didn’t maintain the house, a FHA 203k loan can help. You know that this house is perfect for you, but requires some repairs. An FHA 203k loan will help rehabilitate your home and you can make the house a perfect home for you.

What is a FHA 203k loan?

The Federal Housing Administration (FHA) offers a home renovation loan known as FHA 203k loan. This loan requires a minimum down payment and a low credit score to purchase and repair the house. A Streamline FHA 203k loan is used for cosmetic improvements or upgrades, while a standard FHA 203k loan is designed for more extensive and expensive repairs.

Repairs That Qualify:

Standard 203k loans are provided for remodeling, structural repairs, a new garage, or landscape. Streamlined 203k loans are provided for energy conservation improvement, new roofing, new appliances, or non-structural repairs such as painting.

An FHA 203k loan also covers the following:

  • Patios
  • Decks
  • Flooring
  • Bathroom and kitchen remodeling
  • Plumbing
  • New siding
  • Second story addition

This program does not cover for luxury improvements like building a swimming pool or outdoor tennis courts.

Eligibility:

An FHA 203k loan is not for investors. They are for owner-occupants.

Eligibility Criteria: 

  • One to four family dwellings
  • Existing construction should be completed for at least one year
  • Tear down for a home should include existing foundation
  • Condos are eligible, but the home cannot be a co-op.

Applying For an FHA 203k Loan

The 203k loan application requires the following:

 – Creating a detailed proposal explaining the scope of work to be done. This will include a detailed cost estimate on repairs and improvement.

 – An appraisal

 There are additional mortgage loan application requirements such as proof of income, proof of assets, and credit report.

If you’re confused about which mortgage loan to consider for purchasing your dream home, Drew Mortgage Associates can help! Drew Mortgage Associates, Inc. is a mortgage company in Boston that can help you provide mortgage loans at lower rates. Our home loan officers are highly trained professionals that will help you identify the mortgage loan program that best suits your financial condition. What are you waiting for? Call Drew Mortgage today!

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