FHA-203k-Loans.com

The FHA 203(k) rehab and repair loans are a government-backed loan program that provides funding for the purchase of the property plus the cost of improvements. It is ideal for a buyer who wishes to make repairs or remodel a home soon after moving in, but does not have the available cash to proceed. It can also be used as a refinance loan to borrow the cost of repairs, usually at a lower interest rate than a home equity loan, and is based on the after-repair value of the property.

ONE LOAN, ONE CLOSE, ONE LOW RATE.

In the case of HUD or bank owned homes, it may provide a way to purchase a home and make minor repairs and improvements while realizing significant equity when they are done.

These loans are intended for owner occupants and are not available for investment properties.

Why an FHA 203(k) Loan?

Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made.

When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work.   (From the HUD Website)

Types of FHA 203(k) Loans

FHA Standard 203(k) Program

FHA 203(k) Streamline Program

Rehab Loan Eligibility