Can I use the FHA 203k program to build a garage?
The short answer it "Yes you can". If there is no garage or a one-car garage, you can certainly add another one with this program. The photo is one we did a few years ago. It can even be the only work done on a project if that is all that is needed. In this case they had a wood deck that also provided some protection as a carport underneath. So there was no garage.
We had another one in NC in 2008. The home was about a year old and had no garage, so the only work needed was a new two-car garage with an automatic garage door opener. This is clearly a good way to utilize the program.
You can't add a five-car garage when you already have a two—or three-car garage. We had one like that in Antioch years ago. The borrower collected automobiles and wanted a showplace for them in a new five-car garage, but under the FHA 203k program, this would be considered a "luxury item," and we can't do luxury items under the program.
I had another one in Grass Valley, CA, that was a horse ranch, and the borrower wanted to add a barn. Well, that might be considered a "luxury item," and rather than set it up to fail and fail it would, we decided to add a large garage with an RV space in the center section and a single-car garage door on each side of the RV parking area. It flew through underwriting without any issues. Had we called it a barn, and had it been turned down, it would have likely not worked as a garage since they then knew what we were thinking. Be careful of your wording and how you present your situation to get it approved early on.
So, if you have a client that wants a horse set up, and otherwise, the home is exactly what they were looking for, you might consider adding one of these three-car garages with an RV parking area in the center. Just a thought. Think outside the box. These renovation loans can help you sell a property that otherwise might not fly.
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6/13/2024 871
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