Everything You Need To Know About The FHA 203k Program

When a homebuyer wants to purchase a house in need of repair or upgrades, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the construction; and secure permanent financing when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short-term amortization periods. The Section 203(k) program was designed to address this situation and solve a huge problem. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work.

If your new home purchase requires mandatory repairs, or you lack funds to purchase a new kitchen package, you may be eligible have those repairs/upgrades rolled into your new loan.

Whether your're adding a new fence to your yard or a room to your home, the 203(k) and its partner the 203(k) Streamline will give you quick and easy access to mortgage funds at today's market rates and terms.

There are two types of 203k programs – The Standard 203k and Streamline 203k. The most common type of FHA 203k loan program that I fund is the Streamline 203k Program. The main questions and features of this program are (I will cover these questions below...):
1. What kind of improvements are eligible?
2. What are the minimum and maximum repair costs?
3. What are the requirement to qualify for this program – money down, credit score, ect.
4. What are all of the processes involved and how long will it take?

My FHA 203k mortgage blog is designed to help home buyers, home owners, realtors, and vendors a hub to gather all of the information you need to make the best decision when it comes to buying or selling real estate. Enjoy your time as you browse around, but please do not hesitate to contact me directly at dan.mortgageadvisor@gmail.com if you may have any questions!