What is a 203(k) Loan?
A 203(k) rehab loan allows you to combine the costs of property
acquisition and renovations into a single mortgage loan. No
construction loans, no second mortgages, and no home equity
lines of credit. Just one simple mortgage. That's it!
Whether purchasing or refinancing, our 203(k) program allows
homeowners to make improvements to their home or condo while
financing the cost of repairs into a single mortgage.
The loan is fully disbursed in one closing before the repairs
are made. The mortgage amount for these loans is based on
the projected value of the property when the work is completed.
The best values in real estate are homes that need repair,
so it is usually a good idea to take advantage of those bargains.
Maybe you have seen your dream home needing a few repairs
and you thought it was out of your reach. Not anymore!
Advantages
The 203(k) loan is a great choice for home improvements
whether you are renovating your current home or purchasing
a new home that needs renovations. Below are some of the advantages:
-
With just one loan you can finance the purchase of a
fixer-upper property, including the cost of repairs and
construction. The 203k is actually three loans in one:
Purchase loan, Permanent Financing loan, and Construction
loan
-
Flexible income and debt ratios
-
Flexible credit qualifying
-
As little as 3% down payment, even for multi-family
properties
-
Borrower can do some of their own home improvements
-
Borrower can finance up to 6 months mortgage payments
into the loan
-
The loan closes with the property in "as is"
condition
All repair funds are held in an interest earning trust
account (maximum of 5 draw checks issued)
-
Non-profit organizations can purchase properties with
a 2% down payment
-
Special program for disabled homebuyers (or disabled
family members). All costs for retrofitting the home to
meet the needs of disabled persons can be financed in
the 203(k) loan
What property is eligible?
By now you've read quite a bit of information about 203(k)
loans, but which types of properties are eligible? Look on
further. We have that information for you below. As always,
if you have a question regarding the information below,
just contact us..
One to Four Family Properties:
-
All types. Must be owner-occupied
-
One to four family residential homes, which have been
completed for at least one year
-
Homes that have been demolished or razed as part of
the rehabilitation process are eligible as long as the
existing foundation system remains intact
-
Any property that the buyer wishes to convert. (ie.
a single family property into a two to four family property,
or a two to four family property into a single family
property, etc.)
Condominiums:
Mixed-Use Properties:
- All improvements are required to be made to residential
portion only
- Must be owner-occupied
- Storefronts are eligible
Miscellaneous Guidelines:
- All properties must be at least one year old
- New construction is not eligible
- Commercial properties are not eligible
- Required $5,000 minimum renovation cost
Below are examples of eligible improvements/repairs
NOTE: Required Minimum of $5,000.00 in
Repairs
Remodel Kitchens, Bathrooms, etc.
Room Additions
New Garage
Foundation Repair
Flooring, Tiling, Carpeting
Termite Damage or Treatment
Roofing Repair/Replacement
Structural Alteration/Repair
Heating/Air Conditioning
Electrical Systems
Handicap Access
New Siding
Plumbing
Painting
New Well
Wallpaper
Sewer Connection
Built-in Appliances
Major Landscape Work
Paint, Lead Paint Removal
Fencing, Patios, Decks, Terraces
Insulation/Energy Improvements
For more details on this program, please contact
us or prequalify
through our Web Application
|
