Renovation Loan
FHA 203(k)
To Buy a Home
Allows you to combine the purchase and the renovations of a home with just one loan
To Refinance a Home
Love where you live- renovate your current home into your dream hom
Increases the number of potential homes on the market
Find the perfect neighborhood and create the perfect house
All repairs and upgrades are combined into your mortgage with one payment
The new loan is based on the "after-improved" value
What can you do with a 203(k)?
Upgrade your kitchen Buy new appliances Enhance your bathroom Remodel your master
Add on to your current home Replace plumbing Fix a foundation Replace floors
Add or replace roofing, gutters and down spouts Enhance accessibility for disabled persons
Make energy conservation improvements Add a second story Replace HVAC
Interior or exterior painting Door and/or window replacement Update flooring
How does it work?
Whether you are looking to buy a fixer-upper or renovate your current home, a 203(k) loan allows you to borrow money based on the future value of the home after the repairs are complete. The funds are held in an escrow account and are released to the construction team as the milestones are met. There are two types of 201(k) loan, a Limited 203(k) and a Standard 203(k).
Limited 203(k)
Standard 203(k)
Less paperwork as part of the approval
For repairs and renovations up to $35,000
Requires a 203(k) consultant to inspect repairs, monitor construction andrequests the release of funds from the lender
For major rehabilitation and new construction
Requires that the home be "habitable" throughout the renovation period
Can add up to 6 months of mortgage payments to the loan for the period the home is uninhabitable