Most of the great Dallas foreclosure deals require additional funds for repairs. One possible mortgage program available to new homebuyers looking to take advantage of one of these Dallas foreclosures is the FHA 203k Rehab loan.
HUD has developed an FHA insured mortgage, called the “Streamline (K)” Limited Repair Program that permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.
Given the need for homeowners to make minor repairs without exhausting personal savings, and in consideration of the increasing cost of materials, the minimum repair cost of $5,000 is eliminated and the ceiling is now raised to $35,000. This revised maximum repair/rehabilitation amount recognizes the cost of making older homes more energy efficient. The funds are set aside in an escrow account held by the lender and disbursed on a inspection and draw basis. Typically 2 draws would be given on this size project. See below for eligible repairs. It is important to note that HUD may allow allot more than the actual lender will and each lender may have different overlays on the program to protect themeselves.
Eligible Repairs – Examples are listed below:
» Repair/Replacement/upgrade of existing HVAC systems
» Repair/Replacement/upgrade of plumbing and electrical systems
» Repair/Replacement of flooring
» Minor remodeling; such as kitchens and baths (cannot involve structural repairs)
» Painting, both exterior and interior
» Weatherization; including storm windows and doors, insulation, weather stripping, etc.
» Purchase and installation of appliances; including free-standing ranges, refrigerators, washer/dryers, dishwashers and microwave ovens
» Accessibility improvements for persons with disabilities
» Lead paint stabilization or abatement of lead-based paint hazards
» Repair exterior decks, patios, porches
» Basement finishing and remodeling (cannot involve structural repairs)
» Basement waterproofing
» Window and door replacement and exterior wall re-siding
» Repair existing well
» Repair existing septic
» Repair existing driveway
» Removal of minor shrubs or trees
» Repair existing fencing
If you need to take the program one step further and perhaps the home you are interested in needs a bit more of an overhaul we have a solution for that also it would be the FHA 203k sometimes referred to as the FHA 203 K full or FHA 203k rehab full loan. With this product you are not limited to the $35,000 in repairs you can basically roll in as much required or desired repairs into the loan as long as the house appraises to be worth the repairs. Also with the 203k full it does allow for structural issues to be rolled into the loan. So now foundation and roof work are no longer issues!
One of the other differences to note between the two programs is that with the 203k full HUD does require that a 203k consultant is on board during the project. The consultant will do a 203k work write up of the property and stay on board during construction and handle inspections.
For more information about an FHA 203k rehab loan in Dallas, TX or mortgage foreclosure financing, please contact me at 972-725-9110