Remodel

Remodel Loans - FHA 203k

What projects and properties qualify for 203k loan?

Well during the past year and a half the lending landscape has changed profoundly. Guidelines have been rewritten, loan programs completely canceled, “SO!” here we are. You can’t even get an equity line today! I’ve seen quite a few loan programs in my time in the lending industry. FHA has been one of the mainstays in my portfolio for the past 8 years, I’ve done hundreds. FHA has a great new renovation loan that helps many people buy and refinance. You can actually buy a house that needs repairs and have the money financed into your loan. The refinance option for the loan has some great features also. So lets take a look at a few examples of what it covers…and doesn’t…

Kitchen Remodel

First let’s look at what doesn’t qualify:

· No million dollar homes

· No investment homes

· No mobile homes

· No commercial properties

· No brand new houses

Ok so what does qualify?

Homes that have a loan value under $303,750

Refinance of an owner occupied property – the kitchen is outdated and to be honest it’s plain nasty! Remodeler (you) comes in and gives a detailed quote and the owner agrees and signs off. They can’t take out a home equity line, what choices do they have? Either they pay for it out of their bank account or the 203k loan allows borrowers to finance up to 110% of the home value in their new loan.

Foreclosures – Buyers can even elect to put in new wood flooring, and upgrade the HVAC system, paint the house, and install new windows and doors. If the repairs are very extensive the borrower can even escrow up to 6 months of mortgage payments into the loan.

Fixer Uppers – homes that need substantial repairs or renovation to comply with FHA standards, in the past these repairs would have been required to be complete before purchase. Now with a 203k loan it can be included in the mortgage amount.

Duplexes – where the borrower lives or will live in portion of the home.

Homes with plumbing or electrical problems - Reconditioning or replacement of plumbing (including connecting to public water and/or sewer system), heating, air conditioning and electrical systems, Installation of new plumbing fixtures is acceptable, including interior whirlpool bathtubs.

Homes that need major landscape work, decks, patios, porches or fencing

Improvements for accessibility to a disabled person (e.g., remodeling kitchens and baths for wheelchair access, lowering kitchen cabinets, installing wider doors and exterior ramps, etc.). Related fixtures such as new cooking ranges, refrigerators, and other appurtenances.