- Finance repairs/renovations into loan amount with all work done aftersettlement.
- Finance 110% of appraised value (after renovations), subject to:
- Purchase has requirement of 3.5% down.
- Refinance requires maximum of 95% total (110%) value(no cash out only).
- FHA guidelines as to credit – full doc – primary occupancy only (maximum loan amounts vary depending upon area and number of units).
- Collections sometimes do not need to be paid off (except child support and judgments) dependent upon size of debt and at underwriters discretion.
- Fixed rates with no prepayment penalties.
- Can be used to:
- Purchase a property and repair/renovate it.
- Purchase a dwelling on another site, move it onto a new foundationand repair/renovate it.
- Refinance existing indebtedness and repair/renovate a property.
- Repair/renovate a presently owned property.
- Eligible Improvements include: structural alterations, additions, reconstruction, remodeling, new siding, plumbing, painting, decking, heating, air conditioning, electrical systems, roofing, flooring,carpeting, energy conservation improvements, and major landscaping work.
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- Two variations of the program are available:
- Streamlined (K): Maximum of $35,000 in renovations, no structural work can be done or needed, maximum of two draws per contractor – no minimum amount of repairs. No landscaping or similar site amenity improvements, no room additions, relocating of load-bearing walls, repairs requiring architectural drawings and cannot take more than six (6) months to complete.
- Full 203 (K): No maximum amount of repairs - $5,000 minimum, needs to be an existing property (over 1 year old). Needs an FHA estimator to complete thespecification and repairs form with the contractor prior to the appraisal.
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