FHA 203(k) Streamline Limited Repair Program Loan Process

 What is it?

•  The 203 (k) Streamline Limited Repair Program allows a customer to purchase or refinance a home and make limited upgrades/repairs to the property all under one single loan.
• There is no minimum amount for the repair costs; however the maximum is $35,000 (includes a 10% contingency).
• There is a mandatory 10% contingency required on all Streamline loans. If the contingency is not used, it will be applied to the principal mortgage balance.
• No more than two payments may be made payable to the contractor. Borrower repairs require special handling.
• The borrower is given 3 months from the closing date to complete all the repair/rehab work.

• Available on 1-4 residences, including HUD REO properties, manufactured homes, and condos.  No partially completed properties allowed.

(This probably wouldn't qualify for the 203(k) Streamline loan, obviously too many units. But it certainly could use some help.)

Why would I be interested in the product?

• You or a friend/neighbor/relative want to make some limited repairs/remodeling to your personal residence but don't have sufficient value in your property. This is available to 95% of the finished value.
• You are a Realtor® selling a bank owned property with repairs required to get a loan and the bank is unwilling to make the repairs.
• You are a Realtor® selling a property on a short sale and there is no money available for repairs.
• You are a Realtor® showing someone a ‘fixer-upper" and they don't have the extra cash available to do the fixing.
• You are a Realtor® selling a home that is selling for what is owed on it and your customers would like to have new carpeting, new appliances and/or paint.
• You are a Realtor® that wants to sell more homes.

 What can be done?

• Repair/replacement of roofs, gutters and downspouts
• Repair/replacement/upgrade existing HVAC systems
• Repair/replacement/upgrade plumbing and electrical systems
• Repair/replacement flooring
• Minor remodeling, such as kitchens, which does not involve structural repairs
• Painting, exterior and/or interior
• Weatherization, including storm windows and doors, insulations, weather stripping, etc.
• Purchase and installation of appliances, including free-standing ranges, refrigerators, washer/dryers, dishwashers and microwave ovens.
• Accessibility improvements for person with disabilities
• Septic system and/or well repair and/or replacement
• Other minor remodeling

 What can't be done?

• Major rehabilitation or major remodeling, such as the relocation of a wall
• New construction
• Repair of structural damage
• Repairs requiring detailed drawings, plans or architectural exhibits
• Landscaping
• Pool improvements/repair
• Anything taking longer than 3 months to complete

 Who and how?

• All repairs/work must be completed within 3 months of closing
• Repairs must be completed by a contractor unless the borrower can demonstrate the required expertise/experience
• The contractor does not have to be a licensed general contractor but must provide a resume and two references
• The repairs must be reasonable

How much more does it cost?

• Normal FHA rates and fees apply with the following exception:
•     $100 final lender inspection fee
•     Additional appraisal charges may apply
•     Additional title charges may apply
•     Origination fee will be normal 1% plus .5% (minimum $350) on repair amount

Who do you call? (Currently licensed in Oregon and California. Other states pending.)

Fred Chamberlin

Senior Mortgage Consultant

FHA Mortgage Expert

Alpine Mortgage Planning

Eugene Oregon

541-342-7576

fchamberlin@alpinemc.com