| House Refinance Center |
| FHA Streamline 203(k) Loan Gives $35K Rehab |
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FHA Streamline
203(K) Allows
$35K Added To
House Price For
Repairs
203(K) Allows
$35K Added To
House Price For
Repairs
There are millions of foreclosure houses
waiting for qualified buyers. The inventories
of bank owned real estate (REO) are at
record highs. The problem is that these
properties are sold "as is". Therefore the
buyer has to have some cash reserves in
order to complete the transaction. In other
words there must be enough money to
purchase the house plus make the repairs.
The FHA Streamline 203(K) mortgage is the
answer. It is available for purchases as well
as refinances.
FHA's Streamline 203(K) loan allows the
homebuyer to arrange a mortgage for up to
$35,000 in additional money. This gives the
buyer the opportunity to make improvements
and to upgrade the house before the
move-in date. The property repairs must be
identified and reported by a home inspector
or a FHA approved appraiser.
Eligible improvements.
>> Repair and replace roofs, gutters and
downspouts
>> Repair and replace flooring
>> Remodel kitchen
>> Paint exterior and interior of house
>> Weatherize storm windows and doors
>> Purchase and install appliances
>> Replace doors and windows
>> Remodel the basement.
Repairs not covered.
>> Major remodelling, including the
relocation of a load bearing wall
>> New construction such as adding a room
>> Landscaping
>> Improvements or repairs that take longer
than 6 months to complete
>> Repair of structural damage
>> Improvements that require architectural
drawings or exhibits.
Remember that the 203(K) comes in two
flavors. There is the Streamline 203(K), and
then there is the standard 203(K). Which one
is right for you? This depends on the extent
and magnitude of the remodeling. If the cost
is less than $35, 000 then you need the
Streamline 203(K). For major repairs,
including adding rooms or structural work,
then you need the standard 203(K).
waiting for qualified buyers. The inventories
of bank owned real estate (REO) are at
record highs. The problem is that these
properties are sold "as is". Therefore the
buyer has to have some cash reserves in
order to complete the transaction. In other
words there must be enough money to
purchase the house plus make the repairs.
The FHA Streamline 203(K) mortgage is the
answer. It is available for purchases as well
as refinances.
FHA's Streamline 203(K) loan allows the
homebuyer to arrange a mortgage for up to
$35,000 in additional money. This gives the
buyer the opportunity to make improvements
and to upgrade the house before the
move-in date. The property repairs must be
identified and reported by a home inspector
or a FHA approved appraiser.
Eligible improvements.
>> Repair and replace roofs, gutters and
downspouts
>> Repair and replace flooring
>> Remodel kitchen
>> Paint exterior and interior of house
>> Weatherize storm windows and doors
>> Purchase and install appliances
>> Replace doors and windows
>> Remodel the basement.
Repairs not covered.
>> Major remodelling, including the
relocation of a load bearing wall
>> New construction such as adding a room
>> Landscaping
>> Improvements or repairs that take longer
than 6 months to complete
>> Repair of structural damage
>> Improvements that require architectural
drawings or exhibits.
Remember that the 203(K) comes in two
flavors. There is the Streamline 203(K), and
then there is the standard 203(K). Which one
is right for you? This depends on the extent
and magnitude of the remodeling. If the cost
is less than $35, 000 then you need the
Streamline 203(K). For major repairs,
including adding rooms or structural work,
then you need the standard 203(K).
How To Finance
Your Fixer-Uppers
And Handyman
Specials
Your Fixer-Uppers
And Handyman
Specials
Many American are looking for a house they
can afford. Considering that the housing
market is still in a tailspin bank owned real
estate (REO) is a viable option. The
obstacle here is that the banks are not in the
business of repairing or improving
properties. They simply want to sell the
houses. What can a homebuyer do? The
FHA 203(K) mortgage is worth a look and
the process is simple.
The 203(k) loan includes the following steps.
>> Find the house and do a feasibility
analysis with your real estate agent. Be sure
the numbers work for you and that the
repairs are reasonable.
>> Make an offer on the property. In the
contract state that you are seeking a 203(K)
loan, and that the contract is contingent on
the bank giving the extra money for the
repairs.
>> Select a FHA approved lender that
specializes in the 203(K) loan and get a
detailed estimate of the repairs.
>> Order an appraisal to determine the
value of the house after the renovations.
>> If you are approved by your FHA lender,
the loan will be written for an amount that
includes the repairs, the cost of the property
and the allowable closing fees. The loan will
also include about 15% of the repair costs to
cover extra work or a small cost overrun.
>> At closing, the seller of the house is paid
off and the balance of the loan is placed in
an escrow account. When the repairs are
completed the money from the escrow
account is then released.
>> After the loan closes, the mortgage
payments and the repairs begin. If you are
unable to occupy the house during
renovations, you can have the lender put up
to 6 months of mortgage payments into the
cost of the repairs. However, the number of
payments can not exceed the estimated
time it takes to do the repairs. For example,
if the estimated time for repairs was 3
months, then you can add only 3 months of
mortgage payments.
>> The contractor is paid in a series of two
draws from the escrow account. To ensure
that the work is completed 10% of each
draw is held back. This money is paid after
you inform your lender that the work has
been completed.
>> Your lender will verify that there are no
additional liens on the house.
can afford. Considering that the housing
market is still in a tailspin bank owned real
estate (REO) is a viable option. The
obstacle here is that the banks are not in the
business of repairing or improving
properties. They simply want to sell the
houses. What can a homebuyer do? The
FHA 203(K) mortgage is worth a look and
the process is simple.
The 203(k) loan includes the following steps.
>> Find the house and do a feasibility
analysis with your real estate agent. Be sure
the numbers work for you and that the
repairs are reasonable.
>> Make an offer on the property. In the
contract state that you are seeking a 203(K)
loan, and that the contract is contingent on
the bank giving the extra money for the
repairs.
>> Select a FHA approved lender that
specializes in the 203(K) loan and get a
detailed estimate of the repairs.
>> Order an appraisal to determine the
value of the house after the renovations.
>> If you are approved by your FHA lender,
the loan will be written for an amount that
includes the repairs, the cost of the property
and the allowable closing fees. The loan will
also include about 15% of the repair costs to
cover extra work or a small cost overrun.
>> At closing, the seller of the house is paid
off and the balance of the loan is placed in
an escrow account. When the repairs are
completed the money from the escrow
account is then released.
>> After the loan closes, the mortgage
payments and the repairs begin. If you are
unable to occupy the house during
renovations, you can have the lender put up
to 6 months of mortgage payments into the
cost of the repairs. However, the number of
payments can not exceed the estimated
time it takes to do the repairs. For example,
if the estimated time for repairs was 3
months, then you can add only 3 months of
mortgage payments.
>> The contractor is paid in a series of two
draws from the escrow account. To ensure
that the work is completed 10% of each
draw is held back. This money is paid after
you inform your lender that the work has
been completed.
>> Your lender will verify that there are no
additional liens on the house.
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