FHA 203k Streamlined Renovation Loans in

FHA offers two types of FHA 203k home renovation loan programs for buyers, as well as current homeowners:

• Standard 203k – also called Full or Regular
• Streamlined (k) or Limited Repair Program.

Both types can be used for purchase and refinance. A stipulation for both types of 203k loans is that the total amount financed must not exceed 110% of the projected, “as-improved” value.

All 203k loans allow borrowers to finance the purchase price of the property, the closing costs, plus the cost of repairs. The additional funds are held in a Rehab Account, and pre-determined payouts provide the homebuyer with cash to pay for property repairs or improvements after the loan closes.

The Streamlined 203k has no minimum loan amount requirement, and is designed for homes that need non-structural repair, upgrades or modifications.

This loan option allows borrowers to finance the purchase price plus up to an additional $35,000 into their mortgage to pay for upgrades or improvements. Borrowers are not required to work with an FHA-designated Consultant for the Streamlined 203(k).

The Streamlined 203k has fewer requirements and is designed for smaller, less complicated, lower-cost projects that are considered “cosmetic” improvements, such as minor roof repairs, paint, new appliances, flooring, a new heat and air conditioning system, or doors and windows.

These projects are examples of ineligible improvements that can not be made with the Streamlined 203k loan:

• Major structural repairs
• New construction, such as a room addition
• Repairs requiring detailed plans and specs
• Any repair taking more than 6 months to complete
• Repairs that would necessitate more than 2 draws
• Luxury items that are not a permanent part of the real estate
• Granite, marble countertops, jacuzzi tubs, hot tubs, pools

The use of an FHA-designated Consultant is not necessary with the Streamlined 203(k). This option is used when an architect, engineer or multiple inspections are not required. As a result, this is typically the less costly choice.

Page Tags: FHA 203k Streamlined Loan | 203k Streamlined | FHA Streamlined Rehab Loan