FHA's 203k Loan Program: Buy and Rehab Homes With One Loan
Posted by Phil Boren on Friday, May 7th, 2010 at 1:22pm.
FHA's 203k loan program may not be as well-known as "typical" FHA loans, but it can be a great financing tool. Basically, the loan program allows you to purchase and rehab a home - all with one loan. Many times someone will consider buying a home that needs work, but they struggle with how to acquire the property then come up with the additional money to rehab it. The FHA 203k loan was designed to address this situation.
There are some guidelines and restrictions (it is a government program . . .), but it can be a very effective way to finance the property acquisition and rehab costs with one low down payment. Here are some brief highlights of the FHA 203k loan program:
- One-to-Four unit properties are eligible
- The improvements must have been completed for at least one year
- Cooperatives are excluded
- Condos are eligible, but only for interior rehab
- Demolition is accepted as long as the existing foundation remains
- Rehab work has to be done by an FHA Certified contractor
There are numerous other restrictions, regulations and procedures, but it can definitely be worth it. This loan process can take a bit longer than a traditional loan, and the appraisal typically costs a bit more (they have to estimate 2 values), so you would also need to factor that in. The lender also has to be FHA approved.
Thinking about remodeling your existing home? This particular FHA loan program is for acquisition and rehab, but there are other financing alternatives out there for remodeling projects alone. Read more about the cost vs. value aspect of remodeling your home using this link.
You can read more about the FHA 203k loan and review HUD's FAQ's using this link. You're also welcome to visit with one of our preferred lenders about this program and how it might benefit you. If you have any questions, please feel free to contact us.
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Phil Boren
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Share2 Responses to "FHA's 203k Loan Program: Buy and Rehab Homes With One Loan"
I am actually glad to read this web site posts which contains plenty of helpful facts, thanks for providing such information.
Posted on Thursday, January 12th, 2012 at 4:46 PM.
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Posted on Saturday, May 8th, 2010 at 3:48 PM.