I just wanted to do a quick blast for everyone so they have a refresher of the fantastic FHA 203k Streamline loan.
This is a great opportunity to but a owner occupied fixer upper and use the bank's money. When evaluating the property it's crucial to keep in mind what is an eligible improvement and what isn't.
Examples of Eligible Repairs:
- Repair/Replacement of roofs, gutters, and downspouts
- Repair/Replacement/Upgrade of existing heating, ventilation, and air conditioning systems
- Repair/Replacement of plumbing and electrical systems
- Repair/Replacement of flooring, however the repair of sub-floors is not because it is considered structural
- Minor remodeling such as kitchens that does not involve structural repairs and/or any change to load-bearing walls
- Exterior and interior painting
- Weatherization, including storm windows and doors, insulation, and weather stripping
- Purchase and installation of appliances, including free-standing ranges, refrigerators, washers and dryers, dishwashers, and microwaves
- The sum of all appliances cannot exceed 50% of the total cost of repairs
- If the appliances are included in a contractor bid, and the contractor bid meets the requirements that allow for an initial disbursement, 50% of the total contractor bid may be paid out at initial disbursement.
- If the borrower is obtaining the appliances directly, the payment is allowed only as a final disbursement; and a self-help agreement is required.
- Improvements for accessibility for persons with disabilities
- Repair/Replacement/Addition of exterior decks, patios, porches; provided any repairs do not involve replacing any feature that relies on the home’s structural integrity.
- Basement finishing and remodeling that does not involve structural repairs
- Basement waterproofing
- Replacement of windows and doors and exterior wall re-siding
- Septic system and/or well repair or replacement
- Pool repairs up to $1500.
Ineligible Improvements
- Major rehabilitation or major remodeling, including the relocation or alteration of a load-bearing wall
- Repair of structural damage
- New Construction, including room additions
- Repairs requiring detailed drawings, plans or architectural exhibits or that involve moving load-bearing walls
- Landscaping or similar site amenity improvements including a new pool, or any pool repair greater than $1500.
- Building or rebuilding of a driveway or sidewalk is not.allowed.
- Any repair or improvement requiring a work schedule longer than six (6) months
- Rehabilitation activities that require more than two (2) payments per contractor.
- Lead paint mitigation
- Energy Efficiency Mortgage add-ons that result in a base mortgage exceeding the statutory county limit
- Work requiring architectural exhibits
This is a fantastic program and it's very easy to do when utilizing an experienced mortgage professional.
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