This week we want to outline the types of repair/rehabilitation improvements that are eligible under the FHA 203(k) program.
Last week we discussed the types of improvements that are required under the program. For information concerning this, click here, for a review.
Let’s begin! First let me draw your attention to a distinction between the Streamline 203(k) and the Traditional 203(k) programs. The Streamline program is limited to repair/rehabilitation cost not exceeding $35,000. There are other restrictions which we will try and address in this post on eligible improvements.
Eligible Improvements Under Both Traditional And Streamline 203(k) Programs:
- 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, tiling and carpeting
- Remodeling, such as kitchens and bathrooms
- Weatherization, including storm windows and doors, insulation, weather stripping
- Purchase and installation of appliances, including free standing ranges, refrigerators, washer/dryers, dishwashers and microwave ovens
- Repair/replace/add exterior decks, patios, porches
- Window and door replacements and exterior wall re-siding
- Basement finishing and remodeling
- Basement waterproofing
- Septic System and/or well repair or replacement
- Lead-based paint stabilization
- Accessibility improvements for persons with disabilities
Additional Eligible Improvements Under The Traditional 203(k) Program Only
- Major rehabilitation/Repair, such as relocation of loan-bearing walls
- Room additions
- Repair of structural damage
- Repairs requiring detailed drawings or architectural exhibits
- Landscaping or similar site improvements including: terraces, correction of grading and drainage problems, tree removal if the tree is a safety hazard, repair of existing walks and driveways if a safety hazard, fencing, new walks and driveways and general landscaping work Note: Can not be part of the 1st $5,000 minimum requirement
As you can see, there is quite a list of eligible improvements. Get with you contractor to develop your estimates for the work to be done.
Tip for real estate agents and contractors: review listed properties needing repair/rehabilitation; develop the estimates for work to be done; partner with a knowledgeable and trusted lender familiar with the FHA 203(k) rorgram; have a turnkey project list to share with prospective buyers
I am interested in hearing from you as to your experiences with the FHA 203(k) program
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