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Welcome to the world of Renovation loans

A 203[k] is FHA's Rehabilitation Mortgage loan.. With this loan, a borrower can purchase or refinance a home and include additional money for repairs or renovations. . What can a buyer or seller do with a 203[k] loan?. Purchase or refinance a property

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Welcome to the world of Renovation loans

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    2. A 203[k] is FHA’s Rehabilitation Mortgage loan. With this loan, a borrower can purchase or refinance a home and include additional money for repairs or renovations.

    3. What can a buyer or seller do with a 203[k] loan? Purchase or refinance a property “Update” a property Fix a required repair Make optional improvements, like a room addition or landscaping

    4. Example of Repairs: Replace Roof Room Addition Add a Garage New Carpet Upgrade to Central Heat/Air Repair Termite or Moisture Damage

    5. Types of Properties Single Family 2-4 units Mixed use (Commercial and residential in one building)

    6. Advantages: Perfect solution to Handyman Specials, or foreclosure properties Close before repairs begin – sellers love this Only one closing, with money disburse on a draw basis after closing

    7. More Advantages: Loan amount can go as high as 110% of the “after-improved value” Up to six months to complete renovations Buyer can include optional renovations Can finance up to six months of payments

    8. What is a Streamline 203[k]? The Streamline K program is for limited repairs requiring relatively little expertise to manage. There is no consultant managing the project. Instead, this program is designed for a “streamlined” project where the home can be occupied immediately after closing, and the contractor will receive a single payment at completion.

    9. Advantages of the Streamline 203[k] Quicker and easier to obtain than a full 203[k] Repairs may cost up to $35,000 Requires less documentation than a full 203[k] Faster closing!

    10. Acceptable repairs for the Streamline 203[k] include: Repair/replacement of roof, gutters and downspouts Repair/replacement/upgrade of existing HVAC systems Repair/replacement/upgrade of plumbing and electrical systems Repair/replacement of existing floors Minor remodeling, such as in the kitchen, which does not involve structural repairs Exterior and interior painting Repair/replacement/upgrade of appliances (some limitations apply) Improvements for accessibility for persons with disabilities

    11. The Process

    12. Example of Loan Amount Calculation: Purchase Price $200,000 Total Rehabilitation Cost: $ 20,000 Total Acquisition Cost: $220,000 Maximum FHA Loan Amount: $212,300 Down payment: $ 7,700

    13. Dedicated 203(k) sales and processing team Expert personal consultation and support Smooth process and closing

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