FHA-203K Rehabilitation Means Help for Homeowners!
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Before FHA 203K
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After FHA 203K
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The Department of Housing & Urban Development is pushing an old rehabilitation program, dressing it up and letting Lenders and borrowers know about it’s availability. It is known as the FHA-203k Program. In its simplest terms the FHA-203k Program is designed for the rehabilitation and repair (modernization) of single family properties.
In most circumstances a potential homeowner when purchasing a home that needed some repairs would either have to have those repairs done before closing on the transaction and thereby paying for the costs out of his/hers pocket or assuming their new Lender allowed it paying for the repairs after the transaction closed with a 2nd mortgage or out of pocket funds. In either case it put a strain on the borrower and made many residential loan transactions difficult or impossible to close.
The FHA-203k Program wraps all of the financing into one loan. Let’s say you want to install handicap ramps in a new home your purchasing and the cost for those ramps interior and exterior are $10,000. The FHA-203k Program allows this $10,000 on top of the purchase price assuming that the property value will increase by the cost of the renovation. In other words the repairs are included in the projected value of the home and the mortgage amount is determined by the projected value of the home not the purchase price.
What this does is allow homeowners the following:
- One Mortgage
- Lower Rates
- Lower Payments
- Fixed Terms
- The ability to make necessary home improvements
Eligible Properties Under the FHA-203k Program:
- One to four family unit that has been completed for one year
- Conversion of a one family to a two, three, or four family
- Some Condominium units (restrictions apply)
How the FHA-203(k) Program can be used:
- Purchase a 1-4 unit and rehabilitate it
- Refinance your existing mortgage and rehabilitate your home.
The FHA-203k Program has a lot of strings attached so you need the help of loan officers that have experience with the FHA-203k Program. Also please go to the HUD site http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm and read about the program to make sure you qualify.
If you have blemished credit or other borrowing challenges, FHA may be the only way to refinance and get the money you need to repair or improve your home. Remember: In 2009 there is NO “sub-prime”!
Call 1-800-259-9334 today or Apply On-Line
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