Available for ANY Home at ALL Income Levels
How do you buy a house in need of repair and finance the repairs all at the same time? 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. A high cost interim loan is often used to finance repairs or renovations. Now there is an alternative.
Now it is possible to for anyone to finance a new home purchase and needed renovations in one settlement transaction. FHA 203K financing and renovation loans are designed with renovation in mind. They can be streamlined (under $35,000) or standard (over $35,000) and can be secured with one application, executed in one closing, and repaid with one monthly payment. The benefits include:
- Great way to leverage financing of homes with potential
- Buyers can make progress where sellers (or banks for REO properties) cannot make repairs
- Buyers can create potential equity in promising properties
The loans can provide up to 110% of home purchase price (up to the after-improvement appraisal value). Examples of qualified improvements include: roof, HVAC, plumbing fixtures, painting, new windows, disabled access, moving non-load-bearing walls, carpet, tiles, floors, waterproofing, septic system, wells, and lead paint stabilizing. No major rehabilitation no new construction, no landscaping.
203K Streamlined Loan is a limited repair program – a cosmetic improvement based loan. It applies to owner occupied purchase of 1-4 units only. Total renovation amounts of up to $35,000 (including approximately $1500 of administrative costs) are available. Renovations must enhance livability, health, and safety of the owner and can improve cost effective energy conservation. No luxury items can be funded. Renovations must meet HUD and FHA requirements. No HUD consultant is required and there is no minimum repair amount. Work must start within 30 days of closing
The 203K Standard Loan is available for work with a $5000 minimum and a total over $35,000. This loan allows structural changes and requires 10%-20% as a contingency reserve. HUD compliance is required and one Inspection must occur before withdrawals. Properties must be at least one year old and have been completed all at one time, and not part of a stalled or incomplete development. Work must begin within 30 days of settlement and be completed within 6 months.
Contact me for more information on the benefits and advantages this financing can provide.
For more information, see: http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm
W.C. & A.N. Miller Realtors, A Long & Foster Company
4701 Sangamore Road, Bethesda, Maryland 20816
Cell: 301-452-1409 Direct: 301-320-8430 Ofc: 301-229-4000