203K Renovation Loans
Are 203K Renovation Loans Right For You? Find Out Here
The FHA (Federal Housing Authority) are responsible for backing FHA 203k Renovation loans. They are intended to fund homes that might be distressed or in need of rehabilitation. The loan not only pays for the property but covers the expense of any necessary home repairs. Eligibility requirements are quite flexible and the down payment requirements are low. Homeowners who live in distressed homes can also refinance using the 203k Renovation Loan.
Two Kinds of 203k Renovation Loans
There are two kinds of 203k Renovation Loans, regular and streamlined. Regular 203k mortgages are for homes requiring structural repairs, and streamlined mortgages are for those homes requiring repairs that fall short of structural.
Kinds of Homes that Qualify:
• Tear-downs – provided some of the foundation is left standing, homes that must be torn down and rebuilt qualify.
• Existing homes that are at least 12 months old qualify.
• Single, two, three and four-family homes qualify.
• Condos that have been already approved for FHA loans qualify.
• Residential-commercial properties qualify if you are only repairing the residence.
• The loan must include the price of the house and the anticipated cost of repairs.
• The borrower must put money down, although the amount is considerably less than conventional loans.
• You must plan to live in the home you are repairing.
• The borrower must have proof of income, and proof of assets. The borrower must also pay for the appraisal, which should include how much the home will be worth after repairs. In addition, the borrower must show a detailed estimate of all repairs.
203k Renovation Loans are a great deal for borrowers who may not qualify for a regular home and are willing to take on a fixer-upper.