So you or your client have found a home in a great area in the client's price range. Only one problem: it's in bad shape. The HVAC system is 50 years old, the roof is 40 years old and the windows may as well not even be closed. Plus the kitchen has vinyl floors in 3 different patterns and the counters are all laminate with burns and holes and scars.
Not to fear! Meet the FHA 203K Streamlined renovation loan.
Eligible Improvements Virtually any kind of improvement is eligible provided it becomes a permanent part of the real property and adds value.
- Additions to the structure
- Kitchen or bath remodels
- Finished basement or attic
- Patios, decks or terraces
- Roofing and landscaping
- Safety, energy efficiency and electrical upgrades
- Handicapped accessibility improvements
Luxuryitems are not eligible
- Swimming pools, hot tubs, tennis courts, gazebos, barbecue pits, saunas or alterations to support commercial use
The maximum loan amount must be within the FHA loan amount maximum for the MSA where the home is located and must include the purchase price and the renovation amount. The maximum renovation amount is $35,000 and the minimum is $5,000. Under $5,000 we can do with an escrow of repair funds. A minimum of 10% contingency reserve is required and must also fit into the FHA loan maximums for the area where the property is located. (Any balance remaining on the contingency will be applied to the principal balance and may not be used for additional repairs.)
Yes, it takes a little longer to close an FHA203k Streamline loan than it does to close a standard FHA loan. If you are an agent and you are concerned about that extra couple of weeks just think of it this way: You may make a sale you would not have otherwise made. You may help a buyer get into a home in the area where they wanted to live instead of where they "had" to live. You can be a real hero for someone.
If you are in Georgia I can help you with the necessary paperwork and give you a short class in how to use the FHA 203K Streamline Rehab loan
to purchase, sell or represent homes in today's economy. Never hesitate to call me at any time and I'll be happy to answer your questions.