Ramping Up The Market - FHA 203(k) Streamline

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Scenario: Buyers find a home they really like in a neighborhood they love and the price is perfect. It just needs a few things like maybe a new roof or new HVAC system and they're in! Since it is either a bank REO or a distress sale there is no way the seller is going to make the repairs. Even though the total work needed is less than $35,000 the buyers (a) cannot get a loan approval because of the needed repairs and (b) don't have the money to do the work anyway.

FHA 203k Streamline Rennovation LoanMeet your friend, the buyer's friend, the seller's friend and my friend: 203k FHA Streamline Renovation Loan.

The 203k streamline has the same qualification factors and loan limits as a standard FHA loan. The "streamline", in this case, refers to the limited amount of rehab (maximum $35,000) and not the documentation to qualify as on an FHA streamline refinance 203b. Generally speaking, at least with my Novation Mortgage, the borrowers will need a minimum credit score of 620 (middle), sufficient income, 3.5% of the loan amount in down payment from their own funds or a qualified gift, and to be buying a primary residence.

The 203k streamline does work in conjunction with the Energy Efficient Mortgage (EEM) and is available to first time home buyers.

The one thing the 203k streamline does not like is structural repair.

"FHA's Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser."

This program is also permitted to be used in conjunction with HUD owned homes even the HUD $100 down purchases in Georgia and possibly other states.

When working with a 203k streamline mortgage it is important to work with a mortgage broker who has experience with the program and who can explain each "moving part" as you need to know. They take a little longer to close, require a little more patience and can be very rewarding to all parties involved.

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I started writing on Active Rain in 2006 when I was representing the mortgage industry. I am no longer in that industry and many of the older posts contain outdated information. Please do not contact me for LENDING or MORTGAGE questions but rather contact a licensed mortgage professional from your area. I have always been in marketing and branding and that is still what I do. Thanks for reading!

Comments (4)

William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


Great information!

But, I though "203k streamline" was to be called "230k" I never check FHA about this. Do you know is there a 230k or was it just a typo?


May 08, 2009 08:31 AM
Ken Cook
Content, coding, marketing, host. - Marietta, GA
Content Marketer/Creator

Hi Bill it is the 203(k) Limited Repair Program also referred to as the Streamlined 203(k). I never have heard of a 230k so it must have been a typo.

May 08, 2009 08:38 AM
Mike Young
203kOnLine.com, covering the USA - Stallings, NC
FHA 203k Consultant 916-758-1809

On that $100 down program, who can use it and does it have to be on specific homes or neighborhoods?

Re: the 203k vs 230k warrants some confusion... ha. sections 229-231 all talk about modifications to the 203 section. Section 230 takes a look at the 203k consultant selection process and draw request process. The programs that we want to stay focused on is the 203b, 203h, and 203k programs. Ken, I'm with you, I had not heard of it either but it is there and it is related to clarification of parts of the 203k program.

Jun 11, 2009 11:36 AM
Ken Cook
Content, coding, marketing, host. - Marietta, GA
Content Marketer/Creator

Mike - the $100 down must be a HUD owned (REO) home. Anyone who qualifies for an FHA home loan can use it.

Jun 12, 2009 06:33 AM