FHA 203k Loan Guidelines – Financing for Fixer-Uppers

FHA 203k Loans

Did you find a fixer-upper? Not sure how to finance repairs?

Finance House and Repairs

If you find a house in need of repairs, an FHA 203K rehabilitation loan allows you to finance the repairs and the house purchase in one loan.

A bedroom addition, a family room extension, an upgraded kitchen or a bathroom remodel are just a few of the options available to you with an FHA 203K rehabilitation loan. Click here to learn more about regular FHA 203K loans (for larger scale rehab projects), Streamline FHA 203K loans (for smaller rehab projects), and eligible repairs and properties under each program.

Five Reasons to Consider FHA 203K Loan

  • Turn an average home into a dream home. Qualifed homebuyers can improve less-than-perfect homes in desirable locations or address property shortcomings immediately without draining your savings.
  • Make the home your own – removing the previous owner’s style. Everyone has different tastes – you don’t have to live with the previous owner’s choices.
  • Fix things the previous owner may have ignored – windows, roof repairs, etc.
  • Get more house for the money. REOs and foreclosures are still a large part of the real estate inventory. Buyers can take advantage of reduced home prices.
  • Rolling rehabilitation costs into the mortgage allows borrowers access to repair funds at lower rates.

FHA 203K Program/Property Guidelines

  • Down payment – 3.5% of total amount of purchase plus costs of repairs – gift funds are allowed
  • Seller contributions – seller may contribute 6% of purchase prices toward closing cost and prepaids
  • Purchase of owner occupied primary residence
  • All properties must be at least one year old
  • New construction is not eligible
  • Commercial properties are not eligible
  • Required $5,000 minimum renovation cost

Additional restrictions may apply and FHA 203K loan guidelines are subject to change. Please contact a licensed Inlanta Mortgage loan officer for more information on FHA 203K Rehabilitation loans.

More Information on FHA 203K Loans

Contact a licensed Inlanta Mortgage loan originator for more information on FHA 203K rehabilitation loans. Use our branch locator to find an office near you – or apply online now.

About Inlanta Mortgage

Inlanta Mortgage is proudly celebrating twenty years in business. Learn more about Inlanta’s twenty year history here.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS #1016. Inlanta Mortgage is a proud recent recipient of a Top Mortgage Lenders 2012 Award from Scotsman Guide and was recently recognized as one of the Fastest Growing Firms in the Milwaukee-Area by the Milwaukee Business Journal.

Buying a House? How About a Fixer-Upper?

FHA-203k-home-repair

Are you having a hard time finding a property in your price range?
Have you considered a fixer-upper?

Finance House and Repairs

If you find a house with potential on the lower end of your budget, an FHA 203K rehabilitation loan allows you to finance repairs and the house purchase in one loan.

A bedroom addition, a family room extension, an upgraded kitchen and a bathroom remodel are a few of the options available to you with an FHA 203K rehabilitation loan.

Five Reasons to Consider FHA 203K Loan

  1. Turn an average home into a dream home. Qualifed homebuyers can improve less-than-perfect homes in desirable locations or address property shortcomings immediately without draining savings.
  2. Make the home your own – removing the previous owner’s style. Everyone has different tastes – you don’t have to live with the previous owner’s choices.
  3. Fix things the previous owner may have ignored – windows, roof repairs, etc.
  4. Get more house for the money. REOs and foreclosures are still a large part of the real estate inventory. Buyers can take advantage of reduced home prices.
  5. Rolling rehabilitation costs into the mortgage allows borrowers access to repair funds at lower rates.

FHA 203K Program Eligibility

  1. Down Payment – 3.5% of total amount of purchase plus costs of repairs – gift funds allowed
  2. Seller contributions – seller may contribute 6% of purchase prices toward closing cost and prepaids
  3. Purchase of owner occupied primary residence that have been completed for at least one year.

More Information on FHA 203K Loans

Contact a licensed Inlanta Mortgage loan originator for more information on FHA 203K rehabilitation loans. Use our branch locator to find an office near you – or apply online now.

Inlanta Mortgage is proudly celebrating twenty years in business. Learn more about Inlanta’s twenty year history here.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recipient of a 2012 Top Workplace Award and wasn’t recently named a Top 100 Mortgage Banking Company in America 2012.

New Windows – A Good Investment?

Windows

 

Perhaps you’ve heard it before –  “Replacing windows is a great investment – it will save you so much money!”

Is Replacing Your Windows Such A Great Investment?

According to the Energy Star website a complete window replacement will cost between $7,500 – $10,000 for an average home. So how much will you save by replacing your old windows with more energy efficient ones? According to the Energy Star Website, new windows can lower household energy bills by 7-15 percent.

So let’s do the math. According to the U.S. Energy Information Administration, the average power bill in the U.S. in 2011 was $103.67 (Some of you are probably saying – I WISH!). Assuming your windows cost $8,750 (middle of the range)  and you lowered your energy bill by 11% (middle of the range here, too) or $11.40 a month… from a strictly financial standpoint you would be saving just $136.80 a year for your nearly nine grand expenditure. Not exactly a stellar investment decision in those terms.

But is it all about the money? New windows add comfort, minimize condensation, increase natural light, reduce fading and will overall add to your home’s curb appeal – which helps improve a home’s value. New windows that lower energy consumption reduce greenhouse gas emissions from power plants and shrinks a house’s carbon footprint. That’s all worth something right?

We can’t tell you what to do – but before you purchase all new windows or make any major purchase to aid in energy conservation  – you may want to determine how your house stands up in an energy audit. Perhaps there are other ways to reduce your house’s carbon footprint that doesn’t smack so much.

If you are house hunting and worried about replacing windows on your new home, consider a FHA 203K loan* – the fixer upper mortgage loan.  This loan program allows you to finance the cost of home repairs into your mortgage loan. Click for more information on FHA 203k loans or contact a licensed mortgage loan officer near you.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016.

*Programs subject to change and dependent upon credit approval. Contact your Inlanta Mortgage licensed loan officer for program details, requirements, and eligibility.

 

FHA 203K Streamline Mortgages – Give a Home Some TLC

FHA 203K Streamline Mortgage Loans

We’ve been bombarded with news about the number of vacant and foreclosed homes on the market. Many of these homes are the in the perfect location and are in the right price range ….but need a little tender loving care.  There is a mortgage loan program that addresses this issue – the FHA 203k Streamline Mortgage Loan.

FHA 203K Streamline Mortgage Loans

The FHA 203K Streamline Mortgage program gives you the ability to refinance or purchase a home in need of repairs by allowing you to include the cost of repairs in the loan. This program is guaranteed by the U.S Department of Housing and Urban Development and permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in.

The FHA 203K Streamline mortgage loan program has been instrumental to neighborhood revitalization efforts.

The following repairs are eligible under the FHA 203K Streamline Mortgage loan program:

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replace/Upgrade of existing HVAC systems
  • Repair/Replace/Upgrade of plumbing and electrical systems
  • Repair/Replacement of existing flooring
  • Minor remodeling, such as kitchens and baths
  • Exterior and interior painting
  • Weatherization that includes storm windows and doors, insulation, weather stripping, etc.
  • Non-structural improvements for accessibility for persons with disabilities
  • Discretionary repair items that may not have been included in the appraisal, such as, repair of exterior decks, basement waterproofing, etc.

FHA 203K Frequently Asked Questions

Q: Is the 203k Streamline for purchases only?
A: No, the Streamline 203k may be used for a purchase or a refinance. It may also be used to purchase a REO (Real Estate Owned) property.

Q: Who is responsible for repairs?
A: The homebuyer/owner pays for the repairs from the loan proceeds.

Q: Do repairs have to be completed before the loan closing?
A: No, the repairs may begin after the loan is closed.

Q: Do I have to hire a general contractor?
A: If the repairs require more than one contractor, the mortgagor must utilize the services of a licensed general contractor.

Q: Do I have to hire an FHA Consultant?
A: No, to eliminate the need and cost for an inspection of the completed repairs, the lender may accept receipts from the contractor or proof of completion of the work to the homeowner’s satisfaction.

Q: What repairs are not allowable?
A: Repairs that are considered major rehabilitation or requiring structural modification. For more information on purchasing a home requiring major rehabiliation or structural modification contact a licensed mortgage loan officer near you.

Q: What is the maximum that can be spent on repairs?
A: Rehab costs, plus applicable contingency reserves and fees cannot exceed $35,000.

Q: Who receives payment for the repairs?
A: Up to two payments may be made to the contractor or the homeowner.

Q: How much down payment do I need?
A: As with most FHA mortgage loan programs, the minimum investment is 3.5%.

Q: What about construction fees?
A: Most construction fees (i.e.: loan discount points, title update costs, permit costs) may be financed in the loan.

The FHA 203K Streamline Mortgage Loan program can help you give a fixer upper a little tender loving care. The FHA 203K Streamline Mortgage loan process can be explained in more detail by a licensed mortgage loan officer. Click here to find a mortgage loan officer near you. If you would like to jump right into the application process, click here to begin your Inlanta Mortgage loan application.

Need a little refresher on mortgage loans in general? Check out our blog post Mortgage Loan Basics.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016.

Inlanta Mortgage is not acting on behalf of or at the direction of HUD/FHA or the Federal government.