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An
important tool for community and neighborhood
revitalization, the FHA 203(k) loan offers flexible
qualifying and low down payments:
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FHA standard
guidelines |
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FHA down payment
(3%) |
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Flexible credit
qualifying |
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Assumable loans
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Finance up to 6
months of mortgage payments
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Purchase or
Refinance and Improve all in one loan
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No up front
mortgage insurance |
The 203(k) loan
program offers borrowers the resources to rehabilitate a
home that may be in need of repair, either the home that
they currently live in, or that special fixer-upper
opportunity. One single loan is used to pay for the
purchase (or refinance) and the cost of renovating the
home.
Made
available to certain lenders by the U.S. Department of
Housing and Urban Development (HUD), the FHA 203(k)
program has already provided many buyers with the funds
necessary to buy their first home, or greatly improve a
current home. The FHA 203(k) loan is available to
borrowers of all income levels, to homeowners who plan
to occupy the house, and for homes with one to four
units.
203K Eligible
Borrowers:
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Owner Occupants
- Purchase - Refinance |
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Non- Profits
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Investors NOT
allowed |
Types of 203K
Loans:
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30 or 15 year
fixed rates |
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One year ARMS
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Assumable to a
qualified buyer, with no money down
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Eligible
Properties:
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Single family
dwellings |
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Condominium
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Townhouse
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Mixed Use
(Storefront) |
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1-4 Unit
buildings- you can increase or decrease the
number of units with this loan.
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Structural
Alteration and Reconstruction:
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Changes for
improved functions and modernization
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Elimination of
health/safety hazards |
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Changes for
aesthetic appeal |
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Plumbing,
heating air conditioning, and electrical
upgrades |
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Well and/or
septic repairs |
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Roofing, gutters
and downspouts |
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Flooring, tiling
and carpeting |
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Energy
conservation improvements
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Major landscape
work and site improvement
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Access for the
disabled |
Home Inspection:
The cost of your construction is estimated by an FHA
Approved 203(k) consultant (estimator). The cost
consultant assists you in determining the scope of
repairs and the costs budgeted for the renovation job.
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Perform a home
inspection to create preliminary costs estimates
based upon FHA minimum property standards plus
the scope of work as defined by the home
owner/buyer. |
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Once project has
been determined, the cost consultant prepares a
"work-write up" and 3 contractor bid packages
are issued to the home owner/buyer.
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Appraisal:
The appraiser will be given a copy of your "work-write
up" to estimate an after improved value
for your new or current home. We loan against that
improved value thus allowing you to finance the cost of
repairs.
Other Eligible
Costs:
(THESE COSTS MAY
BE FINANCED INTO THE MORTGAGE LOAN)
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Contingency
reserve (10-15%) |
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Up to 6 months
PITI mortgage payments |
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Permit costs
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Consultant fees
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Inspection and
title update fees |
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Architectural &
Engineering fees (if needed)
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Here are a few
suggestions to get you started:
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Get pre-approved
using our online application
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Locate a home
and submit a contract |
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Once the
contract is accepted, contact us for the names
of FHA approved consultants to get you started
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