What repairs are eligible to be completed with a FHA 203K Loan?

What repairs are eligible to be completed with a FHA 203K Loan?

If you are either looking to purchase a home or possible rehab your existing home, it is important to know the repairs you can do with an FHA 203k loan. It is not breaking news to hear that the market is flooded with homes that need work. The difficulty that potential home buyers are having is looking past the existing state of the property. Knowing the eligible repairs before you go out to see the homes will help you visualize the home in its future state. Also there are a lot of existing home owners who lost equity in their home over the past few years and by knowing the repairs that be be financed in with an FHA 203K loan will help them re-gain their lost equity.

FHA 203K Streamline Eligible repairs ( $35,000 in total repair cost )

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement/upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring
  • Minor renovation, such as kitchens & baths, which do not involve structural repairs
  • Painting, both exterior and interior
  • Weatherization, including storms windows and doors, insulation, weather stripping, etc…
  • Purchase and installation of appliances, including free-standing ranges, refrigerators and microwave ovens
  • Septic system and/or well repair or replacement
  • Accessibility improvements for persons with disabilities
  • Lead-based paint stabilization or abatement of lead-based paint hazards
  • Repair/replace/add exterior decks,patios, porches
  • Basement finishing and renovation that does not involve structural repairs
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding

Here are some examples of Ineligible Improvements with FHA 203K

  • Renovation involving structural changes, like moving a loan-bearing wall, or new construction, like adding rooms
  • Landscaping or fencing
  • Work that will not start within 30 days of loan closing or will cause the borrower to be displaced from the home for more than 30 days or renovations that will take more than 6 months to complete
  • Luxury items like swimming pools, hot tubs, tennis courts, etc.

The second type of FHA 203K is referred to as the FHA 203K Standard. ( $35,000 and above ) Below is a list if of improvements that borrowers are able to complete:

  • All of the improvements listed in the eligible improvements for a streamlines 203(k)
  • Structural alterations and reconstruction, like room additions, repair of termite damage, major remodeling of kitchens and bathrooms, finishing an attic or basement, adding a second story to a home, etc
  • Major landscaping and site improvement including correction of grading and drainage problems, tree removal and repair of sidewalks and driveway, if they are safety hazard to the property

 

 

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