The FHA 203k streamline loan is an option for those looking to renovate or repair their house. This type of home loan covers the cost of renovations or repairs up to $35,000, including simple cosmetic changes that don’t require major alterations. Any kind of structural change, however, is not allowed under this type of loan.
How The FHA 203k Streamline Loan Process Works
How the FHA 203k streamline loan actually works?
A 203K rehab loan allows you to finance the cost of your house along with minor repairs under a single mortgage. In short, it does not require you to have a different home loan program to meet the needs of renovation or basic improvements. The FHA insures that an FHA-approved lender will handle the loan.
Steps involved in the FHA 203K streamline loan program.
- Find a 203K mortgage lender from the list of approved lenders.
- Seek pre-approval to check if you’re qualified for the loan program.
- Gather the documents required for processing the loan.
- Find the desired property that fits your financial specifications.
- Consult with a loan officer to verify the alterations needed for the house.
- Evaluate, if acceptable, the purchase contract offer.
- Find a local contractor for an estimate of your house’s alteration costs.
- Forward your contractor’s bid to your lender.
- Determine the appraised value of the house after the alterations are complete.
- After the appraisal is complete, the lender may produce a conditional commitment to determine the cost of insurance.
- Upon closing the mortgage loan, your lender will place the amount needed for alterations in an escrow account.
If you’re looking for field mortgage loans and mortgage insurance, Drew Mortgage Associates is a leading name in the industry. Drew Mortgage is an FHA approved lender, that can guide you through the loan process and pick the loan program that meets your financial needs.