FHA 203k Loans
What Is An FHA 203k Renovation Loan?
The FHA 203k loan is a government insured mortgage program that allows buyers to finance the renovation costs of properties that might need minor TLC or major repairs, such as the thousands of foreclosures that are sitting vacant due to costly rehab work necessary to make the property move-in ready.
In addition to minor cosmetic upgrades, this loan can be used to completely remodel most 1-4 unit dwellings, and borrowers can even finance in up to 6 month's (principal, interest, tax and insurance) payments to avoid having to worry about additional housing costs while the property is being renovated.
Main Benefits Of 203k Loans:
- Finance Upgrades - Cosmetic to structural rehab work.
- Get What You Want - Buy a property, turn it into a home.
- Increased Values - Improve the re-sale value and save money.
- Energy Efficient Upgrades - Save on utility expenses.
- Low Downpayment - As little as 3.5% of the purchase price for FHA 203k loans.
- Perfect "Fixer-Upper" Loan - New paint, carpet, kitchen remodel... and the list goes on.
- Discounted Listings - Get a better deal when buying a property that needs a little TLC.
The 203k rehabilitation mortgage program was intended to expand homeownership opportunities and affordability while revitalizing communities and neighborhoods by providing financing for properties that need renovation work to make them liveable or sellable.
This program helps preserve, and even increase, neighborhood real estate values in correlation with creating employment opportunities for 203k Contractors.
FHA's primary goal is to help borrowers purchase a home they may not otherwise be able to finance based on the down payment requirements of most conventional loan programs. To further that goal, FHA offers favorable loan terms, higher loan limits, and flexible down payment options to qualified buyers.
If you are considering adding any type of upgrades to your property, it's worth talking with a licensed FHA 203k Lender about your options, and possibly schedule to view a few properties with a local contractor .