Property need some TLC? Try an FHA Streamlined 203K

FHA Streamlined 203(k) Loan

Perfect for purchasing a foreclosure, short sale, or fixer-upper

With the increase in the amount of foreclosures, short-sales, and fixer-uppers on the market, many people are looking for ways to purchase a home that need some work without paying for all of the costs out-of-pocket. FHA offers a streamlined version of the traditional 203(k) rehab loan. The Streamlined 203(k) loan offers that homebuyer the ability to finance up to $35,000 of improvements to the property into the mortgage.

The Streamlined 203(k)is designed for non-structural repairs to the property. You cannot move load bearing walls or add an addition to the property with the Streamlined 203(k) loan. However, there are a lot of repairs that can be covered:

• Repair/ replace/upgrade roofs, gutters/downspouts, HVAC systems, plumbing systems, electrical systems, flooring.
• Remodel kitchens, baths, etc.
• Painting – interior and exterior
• Weatherization of property – doors, windows, insulation, etc.
• Finish/re-finish basements or attics
• Handicap-accessible improvements
• New appliances
• New siding
• Basement/crawlspace waterproofing
• Lead-based paint stabilization or abatement
• Repair/replace/add exterior decks, porches and patios

Following are the limits to the extent of work that can be performed with a Streamlined 203(k) loan:

• Major rehab/remodeling that may require the addition or relocation of a load-bearing wall.
• Any new construction including adding an addition to the property
• Repairing any structural damage to the property
• Any work that cannot be started within 30 days of closing or completed within 6 months of closing
• Any work that requires detailed plans, drawings or architectural exhibits
• Any work that would require the homeowner to vacate the property for more than 30 days.

In addition to the above, the Streamlined 203(k) loan also does not require the use of a consultant nor the use of a general contractor to complete the work. And, if the amount of work to be performed on the property is less than $15,000, the mortgagee (lender) may not require an inspection of the completed work. The Streamlined 203(k) can also be used on a refinance to remodel/rehab a property you are currently living in. However, it can only be used on owner-occupied properties.

If you are thinking of purchasing a property that will need some work after closing, please give me a call so we can go over the details of the requirements of this loan. I can be reached at 708-473-7688 or BarkerLoans@gmail.com