Nothing is more discouraging than finding the perfect home, only to learn that it needs thousands of dollars in renovations before it can be approved for a mortgage. This is true whether you are a buyer looking for the house of your dreams or a real estate agent helping a family locate an affordable place to live. SteveKnowsLoans FHA 203(k) loan program makes it easy to secure funding for a home purchase and renovations.
Concurrent purchase and improvement financing
Most standard mortgage programs have strict guidelines that require financed properties to be in habitable condition. If a buyer is able and willing to do the work necessary to get a home in need of renovations or repairs up to livable condition, they can save a lot of money. The difficulty is resolved by the FHA 203(k) program, which allows borrowers to get the funds necessary to purchase a home and make any necessary repairs.
SteveKnowsLoans offers FHA 203(k) loans, which are backed by the Federal Housing Administration. Only properties that are at least a year old are eligible for these loans, and once the work is done, the borrowers must live there permanently.
Features of the 203(k) Plan
Up to 50% of structural repairs can be funded, and minor repairs can be funded through a streamlined method. Other highlights of the program include:
- Minimum qualifying credit score is 550.
- Minimum repair cost of $5,000
- Required Minimum Deposit of 3.5%
- Considers the value that could be achieved after investments are made
- The most money that can be spent on repairs is fifty percent of the “subject to” valuation.
- Purchase must be finalized before construction is finished.
- 45 percent maximum debt-to-income ratio for rehabilitated funds
- Ineligible for refinancing with a cash-out option
- Borrowers must be primary residence owners.
- Not compatible with most programs that help with the initial investment.
The ability to consolidate the costs of a home’s purchase and necessary renovations into a single, manageable loan allows purchasers and their agents to look at more properties.
Renovations that qualify for a 203(k) loan
Loans to pay the expense of rehabilitation are made available under the program.
- Fixing the structure
- Elimination of dangers to health and safety
- Maintenance and upgrades to water and waste disposal systems
- Installation or repair of new or existing rainwater drainage systems
- Facilitating access for people with disabilities
- Enhancements to energy efficiency are added.
Talk to one of SteveKnowsLoans mortgage specialists about getting more information on an FHA 203(k) loan.
Call Steven Jackson at 813-616-9411 now!
