The 203k Renovation Loan is a great way to purchase a new home in need of repairs or renovate your current home. Think of it as a one-time-close construction loan but with more relaxed standards because it’s insured by FHA. Below are some of the highlights and some useful information but to discuss your unique situation or to apply please give me a call today.
Advantages
- Allows repair/renovation costs to be rolled into the loan
- Major items (such as foundation repair) ARE allowed
- Low down payment (3.5%) and the seller can still pay up to 6% of your closing costs
- Close before the repair/rehab begins
- Only one closing – money is disbursed on a draw basis after closing directly to the contractor
- Buyer can include optional upgrades (such as granite counters)
Examples of Repairs/Renovations
- Foundation Repair
- Replace Roof
- Paint Interior & Exterior
- Install New Flooring or Upgrade to Hardwood
- Remodel Kitchen/Bath
- Upgrade Central Heat/Air
- Repair Termite or Moisture Damage
- Energy Efficiency Improvements
- Replace or Install Siding
- Make Home Handicap Accessible
- Landscaping/Exterior Repairs
- New/Upgraded Appliances
- And More! Call or Email to Find Out if Your Specific Project Will Qualify
The Process
The process is quite simple if you are working with a qualified loan officer.
- Client is pre-approved based on income, assets, credit, and scope of project
- Clients selects property
- Client meets consultant at property for inspection and feasibility study
- Client obtains contractor bid(s) and compares figures with consultant
- Work write-up is prepared by consultant
- Appraisal is performed “as completed” upon executed contract
- All paperwork is completed and submitted to Underwriting
- Underwriting approves the loan and the project
- Closing documents are prepared and transmitted to the title company
- Loan closes and rehab account is created
- Funds are disbursed as work is completed and inspected
- Rehab is complete and the consultant performs the final inspection
Now with the process complete, you can enjoy your new home!
It’s important to note there are a few items that are either NOT allowed or ONLY allowed by exception: Any luxury item and/or improvement that does not become a permanent part of the subject property is not eligible or will require an exception from our 203k Department. Those items include:
- Recreational or luxury improvements, such as pools, hot tubs, whirlpool baths
- Barbecue pits, tennis courts, satellite dishes, tree surgery
- Additional or alterations to support commercial use or to equip or refurbish
As you can see this is a complex loan but working with the right team makes all the difference. My team and I write 203k loans on a monthly basis nationwide. We also maintain a database of qualified 203k consultants and contractors for you to use if you choose to do so. To find out more about this loan or to apply please contact me today.
Contact me for more details
972-725-9110
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