The FHA 203K Rehab Loan, The New Fixer Upper!

Also known as as the FHA 203k loan, buyers have benefitted from this type of financing more then ever.  There are certain requirements to qualify for the program so I recommend speaking with an FHA specialist.  Your Westchester County Buyers Agent can provide you with more info or I can gladly recommend some if needed, just send me a message.

Most buyers will need to obtain financing to purchase the home and additional financing to repair or fix up the home.  The 203K program addresses this problem by combining both into one loan.  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. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.

To be eligible, a property must be a one- to four-family dwelling that has been completed for at least one year. If a home has been demolished, part of the existing foundation must still be in place.  Coops are not eligible for the program but the Department permits Section 203(k) mortgages to be used for individual units in condominium projects that have been approved by FHA.