FHA 203 (k) rehab loans – Home Improvement Loan
What kind of repairs or improvements can I do?
FHA 203K Rehab Basics
The FHA 203K program provides for a single-close loan that enables a qualified borrower to purchase a home that may need repairs or to refinance an existing home for the purpose of remodeling. The streamlined FHA 203K program allows the borrower to finance a maximum of $35,000 to make improvements. Both programs generate the necessary funds for renovation by financing the as completed value of the home, rather than the present value.
Features of the FHA 203K loan are:
- Primary residences that are 1- to 4- unit properties
- Purchases and rate and term refinancing
- Fixed rate mortgages with a 30 year term
- You have up to 6months to finish the rehab work
- One loan- no need for both a construction loan and permanent financing with the FHA 203k you can do it all in one!
FHA 203K loans come in two varieties- the full 203K loan and the streamlined version. It depends on what type of repair or home improvement you are trying to do when trying to decide which version on the loan is right for you.
The FHA 203K loan is designed for borrowers who:
- Want an alternative to a close end second mortgage or a home equity line of credit (which usually comes with a variable rate!)
- Borrowers who can benefit from flexible qualifying requirements
- Are looking for a cost effective way to repair or improve their current home
- Want to know there loan is backed by the government and FHA
- Plan to purchase a home that needs repairs (this is great for buying foreclosures!)