The FHA offers a loan program that allows you to borrow money for both home improvements and home purchase, all in one loan. The FHA 203K loan can also be used for just home improvements, depending on your needs. Because this loan is offered by the FHA, it is easier to get approved for than some other loans.
Have you found the home that's almost your dream? In the right neighborhood with the right yard, but needs some improvements to become perfect?
With the FHA 203k it's possible for you to turn that house into your home and fund all of the improvements it needs. FHA usually requires the project be completed within 6 months, and that a contractor is used for the work. The FHA 203K loan enables you to avoid high-interest rates on second mortgages, borrow against the projected value AFTER your improvements are completed, and may even allow you to draw enough money to pay rent at another location while your home is being remodeled.
The FHA 203K Streamline Mortgage program lets you include the cost of repairs in the loan. The 203K allows homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in.
Repairs eligible with this program:
- Repair/Replacement of roofs, gutters and downspouts
- Repair/Replace/Upgrade of existing HVAC systems
- Repair/Replace/Upgrade of plumbing and electrical systems
- Repair/Replacement of existing flooring
- Minor remodeling, such as kitchens and baths
- Exterior and interior painting
- Weatherization that includes storm windows and doors, insulation, weather stripping, etc.
- Non-structural improvements for accessibility for persons with disabilities
- Discretionary repair items that may not have been included in the appraisal, such as; repair of exterior decks, basement waterproofing, etc.