The 203(k) loan is a simple way to purchase a HUD Home that may need cosmetic and/or structural repairs.
How a 203(k) loans works:
You get a loan for the purchase price and a loan for remodeling all in one loan. It is a simple way to purchase a property and have the money to make repairs.
Purchase Price: $100,000
Remodeling Cost $20,000 (Includes 10% Reserve)
Total Loan: $120,000
More Info on the 203(k) Streamline Loan:
FHA’s Streamlined(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their existing home. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. What makes this loan more attractive is that the changes to the property can be cosmetic as well as meet minimum property requirements. There is no minimum repair cost threshold of $5,000. The Streamlined(k) program is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required.
The Streamlined(k) program includes the discretionary improvements and/or repairs shown below:
• Repair/Replacement of roofs, gutters and downspouts
• Repair/Replacement/upgrade of existing HVAC systems
• Repair/Replacement/upgrade of plumbing and electrical systems
• Repair/Replacement of flooring
• Minor remodeling, such as kitchens, which does not involve structural repairs
• Painting, both exterior and interior
• Weatherization, including storm windows and doors, insulation, weather stripping, etc.
• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
• Accessibility improvements for persons with disabilities
• Lead-based paint stabilization or abatement of lead-based paint hazards
• Basement finishing and remodeling, which does not involve structural repairs
• Basement waterproofing
• Window and door replacements and exterior wall re-siding
• Septic system and/or well repair or replacement