If you are looking to purchase a home and find a way to include repair or remodeling costs into your home mortgage, the FHA 203k loan, may be what you are looking for. Here are the basics you need to know about the program.
Purchase or Refinance
The FHA 203K loan is available for the purchase or refinance of a property and takes into account the purchase price or payoff (in the case of a refinance) and then adds in the cost of repairs to create your new loan balance. The repairs are then completed after the loan closing.
Property Value
The property must be appraised based on what the property will be worth after repairs. This value will then be used for a property value and the loan to value will be based off of the new loan value.
The maximum repair amount allowable is $35,000 with no minimum amount that can be taken for repairs. The funds will be escrowed at closing and released as the work is completed. A general contractor is not needed, but the work must be completed by a licensed professional.
Eligible Improvements
Eligible improvements include: repair/replacements of roofs/gutters, hvac, plumbing, electrical, flooring, painting, appliances, patios, porches, driveways, windows, doors, septic systems and other common repairs.
Ineligible Improvements
Ineligible improvements include: complete remodeling, new construction, structural issues, landscaping. As well any repairs taking longer than three months or not starting within 30 days of closing are ineligible.
These are just some of the basics of the FHA 203K Loan. In today's market this can be a very important loan program for both new buyers and existing home owners. If you currently own or are looking to purchase a property that needs minor repairs, this may be the loan for you.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at
www.strategicmtgaz.com
Strategic Mortgage - AZBK#0909514 - NMLS#158804
Equal Housing Lender - Vasilios Kamboukos - NMLS#160440
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