How Can Renovation Loans Help You?

FHA 203K LOAN PROGRAM
How Can Renovation Loan Help You?

Much of our present listing inventory consists of bank-owned properties.

Many of those properties are in unacceptable as-is condition for traditional mortgage financing.

Therefore, absent a renovation loan program, they may only be sold for cash, usually at a substantial discount.

The FHA 203k renovation loan program permits buyers to finance those homes in their present as-is condition with low moneydown.


What is a Renovation loan?

A Permanent Mortgage that provides funds for both Acquisition (or Refinance) and Renovation.

Loan includes:

* The cost to purchase the property;
* The cost to fix-up the property; and
* Other costs such as consultant fees, mortgage payments during the construction period, permits, contingencies, etc..
* After settlement the borrower can fix-up the property to modernize, repair, etc.

Loan amount is based upon what the property will be worth after it is improved. You may close As-Is!


FHA 203k Loan

FHA 203k Mortgage Loan

The FHA 203k loan is a permanent mortgage which allows for the acquisition (or refinance) of a residential or mixed-use property and the escrow of funds for repairs, remodeling and/or improvements after closing, eliminating the need for short-term construction financing.

Types of FHA 203k Loans

* 30 or 15 Year Term

* Fixed Rates

FHA 203k Eligible Borrowers

* Owner-Occupants
- Purchase
- Refinance

* Non-Profits Not Allowed

* Investors Not Allowed


203k Eligible Properties

* Single family dwellings
* Limited Condo/Townhouses & Mixed-Use
* 2 - 4 Unit Buildings - you can increase or decrease the number of units with this loan.

Note: Unfinished new construction not permitted.

FHA 203k Down Payment

* 3.50% down, based upon the total cost of acquisition and renovation.

FHA 203k Loan Limits

* The loans that FHA will insure are limited in amount, by county/ by state and by the number of units in the subject property.

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Source: Bank of America Renovation Lending Group