The FHA 203K program is a wonderful tool to help homeowners and potential buyers with home repair and remodeling projects. Over the course of the last few posts we have shown you some of the basic guidelines for these types of loans. We will conclude this series with questions frequently asked about this topic.
- Are all improvements eligible under the FHA 203k program?
No. Luxury items are not allowed. However, painting, addition of a room, and the building of a deck can be allowed if the home does not need other repairs.
- Is there a minimum loan amount for this program?
Yes. Loans must be at least $5,000 for the eligible improvements proposed for the home.
- Are the improvements or repairs expected to be completed within a certain time frame?
Yes. The Rehabilitation Loan Agreement contains restrictions about when the work should begin and end.
- Is there a maximum amount that can be financed?
Yes. There are different formulas for calculating the maximum loan amount. There is a formula for a home purchase and a separate formula for a refinance of an existing loan.
Although we have explained some of the general requirements of the FHA 203K loan, there is actually a lot more information about the rules governing these types of loans. In order to ensure that you are eligible for this loan you should contact a reputable lender authorized to process FHA loans. Your lender can walk you through the entire process and help you achieve your desire of remodeling your house into the home you really want to have.
Detailed program information can be found on our FHA 203k page of our website.
If you missed any of the previous posts, please see below: