Whether you’re buying a property in disrepair, or you wish to get a fixer-upper for your home, these are costly expenses and financing them can be a challenging task as full-cash funding can hurt your liquidity. To smoothly finance purchase of property that is in disrepair or fixer-upper ventures, get in touch with Greentree Mortgage for FHA 203K rehab mortgage.

FHA 203K Mortgage

FHA 203K mortgage is a home loan created to maintain property values and revitalize declining neighborhoods by lending homeowners funds to remodel their properties. This loan is available to owner-occupants, not property investors. It provides funding for properties and repairs. And more importantly, it requires a low down payment and eligibility requirements are also less stringent in comparison to traditional loans.

Types of Homes That Can Qualify for an FHA 203K Rehab Loan

Properties that need:

  • New additions
  • To be demolished
  • To be rebuilt completely

Other homes that qualify for FHA 203K rehab mortgage include:

  • A 1 or 4 family property that is about a year old
  • Conversion from single family home to a 2, 3, or 4 dwelling
  • A multiple story building reduced to a single-family home 
Types of FHA 203K Rehabilitation Loans

There are 2 types of FHA 203K Rehab loans:

 Standard

Standard 203K loans are available for properties that require foundation or structural repairs or extensive renovations. You can qualify for the standard FHA 203K rehab loan if the scope of repairs is such that you cannot live in the property. The maximum mortgage amount for standard FHA 203K loan is based on the lesser of the as-is property value plus rehab costs or 110 percent of the estimated property value after rehab.

 Streamlined

Streamlined FHA 203K loan is for properties that require minimal repairs. To qualify for this loan, your estimated repair cost should be lower than $35,000.

List of Repairs that Qualify for FHA 203K Loan

Here is a list of repairs that qualify for an FHA 203K mortgage:

  • Energy conservation additions and updates
  • Plumbing
  • Heating and air-conditioning systems
  • Floors
  • Development of disability access
  • Patios
  • Decks
  • Bathroom remodeling
  • Kitchen remodeling
  • Attics
  • Basement finishing
  • Room additions
  • Roofing
  • Repairing and replacement of sidings

The FHA 203K loan program does not cover luxury improvements such as adding a swimming pool or a tennis court to the residential property. Also, according to FHA, all covered repairs should be completed in 6 months.

For more information on FHA 203K rehab loan or for assistance with paperwork and repair cost estimates, feel free to contact us