Does that house you want need some work or even just a little TLC? Rehab Loans with 3.5% Down

By
Services for Real Estate Pros

If that house you're looking to buy needs a little bit of TLC to make it "just right," or even to make it a little bit more to your liking, there is a rehab loan you can get to buy that house with as little as 3% down.  The loan is called the Streamline 203(k) Limited Repair loan and here are a few of the important highlights:

The Streamlined (k) program is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required. The Streamlined (k) program includes the discretionary improvements and/or repairs for both a purchase or refinance. Repair/renovation costs can go up to $35,000 with no minimum. Repair items and estimated costs must be included in the appraisal. Repairs greater than $15,000 require a final inspection.

Below are the repairs covered under this program:

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement/upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring
  • Minor remodeling, such as kitchens, which does not involve structural repairs
  • Painting, both exterior and interior
  • Weatherization, including storm windows and doors, insulation, weather stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
  • Accessibility improvements for persons with disabilities
  • Lead-based paint stabilization or abatement of lead-based paint hazards
  • Repair/replace/add exterior decks, patios, porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement

The items that the program does not cover are:

  • Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall
  • New construction, including room additions
  • Repair of structural damage
  • Repairs requiring detailed drawings or architectural exhibits
  • Landscaping or similar site amenity improvements
  • Any repair or improvement requiring a work schedule longer than six months
  • Rehabilitation activities that require more than two payments per specialized contractor.

 

Comments (2)

Michael A. Caruso
Surterre Properties - Laguna Niguel, CA

Hi Juan,

Thanks for the info on the Streamlined program, I'll keep it in mind for future buyers.  Have a great week.  Michael A. Caruso

Jun 23, 2008 06:55 AM
Juan Boldizsar
Belleville, IL

Thanks for the comment, Michael.  You have a great week yourself!

Jun 23, 2008 09:19 AM