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203K Streamlined / Home Improvement Options

The FHA 203k Renovation Loan is used for financing home improvement projects and to purchase or refinance a property.

An FHA 203k loan is ideal for buying a home that needs renovation because it allows you to combine your renovation costs into your mortgage so there is one loan with one closing.

The amount borrowed is a combination of the cost of the home and the estimated price of the repairs, including labor expenses.

Home Improvement Requirements

FHA 203k loans follow the eligibility guidelines of the standard FHA mortgage for qualifying. The following is a list of projects that are eligible for an FHA 203k Loan:

  • Removal of lead-based paint

  • Decks, patios, porches

  • HVAC systems FHA 203k Home Improvement Refinance Loan

The FHA 203k Refinance Loan allows homeowners to rehabilitate their home; whether it’s to make a home handicapped-accessible, replace a roof or upgrade the kitchen. The loan allows borrowers to cash out up to $35,000 for the home improvement project, and the mortgage balance can exceed the current appraised value of the property.

FHA 203k Home Improvement Loans Benefits

With an FHA 203k Home Improvement Loan, borrowers can have a single fixed-rate mortgage and up to $35,000 cash out for improvements. A 203k home renovation loan is ideal for financing home improvement expenses.

  • Purchase a property for renovation: Finance a property that needs rehabilitation

  • More opportunities: Purchase rehab properties with sufficient funds to afford the repairs

  • Combine the construction costs with the mortgage: Limit the closing costs and simplify the renovation process.

  • Get up to $35,000 cash out and the mortgage balance can exceed the appraised value of the home

  • (heading and air conditioning)

  • Basement completion

  • Basement waterproofing

  • Updates to a septic or well system

  • New kitchen appliances

  • Washer and dryer upgrades

  • Roofs, gutters, and downspouts

  • Plumbing and electrical upgrades

  • Minor kitchen or bathroom remodeling

  • Installing carpet, tile, or wood flooring

  • Restoring windows or doors

  • Weather stripping and insulation upgrades

  • Disability improvements

  • Energy efficient upgrades

  • New siding

  • Building a home addition

 

Types of properties that qualify:

  • A one-to-four family home that has been complete for at least a year

  • A home that has been torn down as long as some of the existing foundation still remains

  • A home that may need to be moved to a new location

  • Some condos

Home Improvement Options

There are two types of 203k Loans:

  • Streamlined 203k: This loan requires less paperwork from the borrower for approval and is designed for projects that don’t involve structural improvements. The maximum repair limit is $35,000 and the home must not be lived in during the renovation.

  • Standard 203k: The minimum requirement for renovation costs is $5,000 and covers structural repairs. There is no repair limit as long as the entire loan is below the FHA’s maximum loan amount for the particular region. 

 

203k loans are available as fixed rate or adjustable rate mortgages.