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FHA 203k Renovation Loan
Manage episode 366860679 series 3393079
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The limited FHA 203(k) rehab loan is geared toward minor improvements and repairs. No structural work is allowed, so you won’t be able to knock out walls or add rooms. In some cases, borrowers may be allowed to do some of the home improvement work, but a licensed contractor must be involved in the process. A 203(k) consultant isn’t required on a limited 203(k) loan.
The maximum loan-to-value (LTV) factor is 96.5% for a purchase case and 97.75% for a refinance case.
So if your purchase price is $265,000 and the ARV after repair value is $325,000 your maximum 203k loan amount is $313,625 this includes the purchase and renovation.
Qualifications 580 FICO
Community Benefits
Whether you are a homebuyer, a homeowner, a real estate agent‚ a contractor who specializes in home improvements or a government official looking for options to help meet your community’s housing needs, 203k loan is a great option for first-time homebuyers.
Homebuyers can:
• Improve less-than-perfect homes in desirable locations
• Address property problems or shortcomings right away
Homeowners can:
• Upgrade or expand to enhance the value of their home
• Repair or remodel their home without draining their savings
Real Estate Agents
Move hard-to-sell listings by helping potential buyers envision remodeling possibilities.
Suggest financing options that may generate listing and selling commissions.
Watch "FHA 203k Renovation Loan Product" on YouTube
Contractors
Improve cash-flow
Provide estimates, knowing that financing has been approved.
Feel confident they will receive payment for work completed in a timely manner.
Governments
Local governments can: Suggest financing options to buyers interested in foreclosed properties owned by their municipality.
Make constituents aware of renovation options that may make their homes more energy efficient
Apply online HomeReady
Yes repairs will be done after the loan closed on 203K loans.
Fresno County 203k loan can’t exceed 96.5% of $472,030.
Maximum rehab loan amount is $455,508. Rehabs above $35,000 requires a 203k HUD consultant.
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