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FHA 203K Loan
An FHA 203K loan allows you to purchase and rehab with one loan and one closing.
Requirements and Eligibility –Owner Occupied Properties Only
· The mortgage must be a first lien on the property.
· The loan to purchase the house must be made available first before the rehab or improvements can begin.
· Must be a one- to four-family dwelling that has been completed for at least one year.
· The number of units on the site must be acceptable according to local zoning requirements.
· All newly constructed units must be attached to the existing dwelling.
· Cooperative units are not eligible.
· Conversion of a one-family dwelling to a two-, three-, or four-family dwelling or decreasing an existing multi-unit dwelling to a one- to four-family unit.
· Condominiums may be rehabbed subject ot the following conditions:
1. Owner/occupant and qualified non-profit borrowers only;
2. Rehabilitation is limited to the interior only and proceeds cannot be used to rehab common areas which are the responsibility of the condominium association, except for the installation of firewalls in the attic for the unit;
3. The lesser of five units per association or 25% of the total number of units, can be undergoing rehabilitation at any one time;
4. The maximum mortgage amount cannot exceed 100 percent of after-improved value. After rehabilitation is complete, the individual buildings within the condominium must not contain more than four units.
Eligible Improvements
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· Repair/Replacement roofs, gutters, and downspouts · Repair/Replacement/Upgrade of existing HV AC systems · Repair/Replacement/Upgrade of plumbing and electrical systems · Repair/Replacement of existing flooring · Minor remodeling such as kitchens, which does not involve structural repairs · Exterior and interior painting · Weatherization: including storm windows and doors, insulation, weather stripping, etc. · Appliances – Purchase and installation are included. Appliances may include free-standing ranges, refrigerators, washers/dryers, dishwashers, and microwaves · Lead-based paint stabilization or abatement of lead-based paint hazards · Repair/Replace/Add exterior decks, patios, porches · Basement finishing and remodeling, which does not involve structural repairs · Basement waterproofing · Window and door replacements and exterior wall re-siding · Septic system and/or well repair or replacement · Improvements for accessibility for persons with disabilities · For lead-based paint stabilization costs above and beyond that paid for by HUD when it sells real estate owned (REO) Ineligible Improvements: · Major rehabilitation or major remodeling, such as the relocation of a load bearing wall · New construction (including room additions) · Repair of structural damage · Repairs requiring detailed drawings or architectural exhibits · Landscaping or similar site amenity improvements · Any repair or improvement requiring a work schedule longer than six (6) months · Rehabilitation activities that require more than two (2) payments per specialized contractor |
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203K Streamline Loan – Rehab Program Overview
The 203(k) streamline loan program offers borrowers the resources to rehabilitate a home that may be in need of repair, either the home that they currently live in, or that special fixer-upper opportunity, without the extra cost or details as found in the regular 203k. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.
