FHA 203(k) RENOVATION MORTGAGE

By
Managing Real Estate Broker with The Butler Team at Brokers Realty of CFI

Are you interested in buying a fixer-upper, but don't have the cash to remodel it? Or maybe you have saved money for remodeling and you've found your diamond in the rough, but your lender won't allow you to buy it because the house isn't considered habitable without toilets.
There are several properties on the market right now that weren't maintained by former owners, were treated poorly by renters or were foreclosed homes that were deliberately destroyed by their previous owners . Shouldn't there be a way for someone like you to fix up these neighborhood eyesores, bring them back to life, and make it your dream home all at the same time?

There is, and it's brought to you by the federal government. The Federal Housing Administration's rehab loan product, the FHA 203(k) loan, was designed for individuals who want to rehabilitate or repair a damaged home so they can live in it as their primary residence. These loans are endorsed by the government to encourage lenders to offer what would otherwise be considered a risky loan product. The 203(k) loan allows you to buy and renovate your home with one loan by spreading the cost of the renovation ($5,000 minimum; $35,000 maximum) throughout the entire mortgage term.

Homeowners can use renovation-mortgage money for allowable purposes that improves the property. This may include fundamental improvements that make the home safer, such as a new roof, plumbing or electrical work or repairing a foundation. You can also use the funds to invest in energy efficiency, installing more insulation and energy-saving appliances and fixtures. Also, you can use the loan to improve the appearance of your home through landscaping, siding, exterior lighting, kitchen and bath improvements, and cosmetic upgrades such as new flooring.


This loan follows the standard FHA guidelines and qualifications, so if you think that this product sounds like something you would be interested in, contact THE BUTLER TEAM today.

Let us help you, along with one of our preferred Lenders, find that "diamond in the rough"

Penny Jungers-Gilmore

BUYERS SPECAILIST

THE BUTLER TEAM

Comments (1)

Paul Welden
203k Contractor Program - Tempe, AZ

Penny - 

It's really good to see more Realtors like you take notice of the 203k.

The 203k can be used on almost any residential property (1-4 units) including mixed-use residential for almost any renovations (not building pools or including luxury items), including personal improvements such as building an addition, adding a 2nd level or a deck/patio/porch, etc., where the borrower will occupy the property as his/her primary residence, including refinances. 

However, the FHA 203k loan does not have HUD limits on renovations $5,000-$35,000.

The FHA 203k Standard/Full version has rehab limits of $5,000 - FHA max loan limit for the area (for Polk County $271,050 for one-family up to $521,250 for four-family) and some exceptions may apply.

The FHA 203k Streamline version has HUD rehab limits of $0 - $35,000 (Mortgagee Letter 05-50).

So, the 203k renovations can be as low as $0 up to "the sky is the limit" (almost). 

Keep up the good work of spreading the news about the availability of the 203k and you can be a catalyst for positive change for your Real Estate and economy.

By the way, did you know that the use of the 203k has increased ~600% since 2007?

 

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Paul Welden, Director
203k Contractor Education & Certification Program
http://203kContractors.com
480.463.4663

Certified 203k Contractor

Aug 04, 2011 03:16 AM