FHA 203k Renovation (Rehab) Loan is a relatively unknown program to many home buyers. Even though it has been around for a while, not too many people have even heard of it. There is a very simple reason - only about 1% of all FHA lenders are qualified to write the full 203k mortgages. Since it partially is a true construction loan, not too many lenders have been wanting to deal with it.
FHA 203k Renovation Loan provides excellent opportunities to anybody looking to buy fixer-uppers. Currently our market is still flooded with REO properties as well as short sale homes and large percentage of those homes require some type of repairs or upgrades. Additionally the 203k loan can be used towards improving a regular resale home – from simple cosmetics to new double paned windows, roof or AC unit. The list of eligible repairs and improvements allowed in FHA 203k is quite extensive – there is not too much that cannot be done. I have added the complete list of items below.
So what is the FHA 203k Renovation Loan? It is an FHA loan with construction component added to it. This loan allows a buyer to purchase a home with 3.5 percent down and roll needed repairs, improvements as well as upgrades into the total mortgage. Instead of using your liquid cash or personal credit cards with high interest rates to fix the property - rather just roll it all into your mortgage at much lower rate.
How does it works? Anybody who would qualify for regular FHA loan, would also qualify for FHA 203k. The loan limit is $292,500 and can be used only for owner-occupied houses. The buyer is required to live in the property for a period of 1 year. Whereas the period starts at closing.
One of the positive side effects of FHA 203k is that finished properties often experience instant equity due to raised value (of course the subject property had to be bought under market value). .
Energy conservation improvements tend to save tremendously due to lowered electricity bill or home insurance reduction. Same goes for replacing the roof (if it needs to be fixed) – the lowered home insurance premiums often justify new roof installation on the spot.
Few reasons why:
Potential instant equity due to low purchase price and raised value after renovation
Energy conservation and savings on your electricity bill
A new roof lowers the insurance premium significantly
Finish your house the way it suits you and your family. MMahar
FHA 203k Renovation (Rehab) Loan is a relatively unknown program to many home buyers. Even though it has been around for a while, not too many people have even heard of it. There is a very simple reason - only about 1% of all FHA lenders are qualified to write the full 203k mortgages. Since it partially is a true construction loan, not too many lenders have been wanting to deal with it.
FHA 203k Renovation Loan provides excellent opportunities to anybody looking to buy fixer-uppers. Currently our market is still flooded with REO properties as well as short sale homes and large percentage of those homes require some type of repairs or upgrades. Additionally the 203k loan can be used towards improving a regular resale home – from simple cosmetics to new double paned windows, roof or AC unit. The list of eligible repairs and improvements allowed in FHA 203k is quite extensive – there is not too much that cannot be done. I have added the complete list of items below.
So what is the FHA 203k Renovation Loan? It is an FHA loan with construction component added to it. This loan allows a buyer to purchase a home with 3.5 percent down and roll needed repairs, improvements as well as upgrades into the total mortgage. Instead of using your liquid cash or personal credit cards with high interest rates to fix the property - rather just roll it all into your mortgage at much lower rate.
How does it works? Anybody who would qualify for regular FHA loan, would also qualify for FHA 203k. The loan limit is $292,500 and can be used only for owner-occupied houses. The buyer is required to live in the property for a period of 1 year. Whereas the period starts at closing.
One of the positive side effects of FHA 203k is that finished properties often experience instant equity due to raised value (of course the subject property had to be bought under market value). .
Energy conservation improvements tend to save tremendously due to lowered electricity bill or home insurance reduction. Same goes for replacing the roof (if it needs to be fixed) – the lowered home insurance premiums often justify new roof installation on the spot.
Few reasons why:
Potential instant equity due to low purchase price and raised value after renovation
Energy conservation and savings on your electricity bill
A new roof lowers the insurance premium significantly
Finish your house the way it suits you and your family. MMahar